When Companies Snap

McAfee, a major seller of anti-virus software, recently stepped all over some customers' toes. Overnight, the company had installed an upgrade in their clients' computers. But they had failed to test it properly. They did not test using a full suite of target operating systems. One version of Windows failed, a commercial version. Many companies began the day with their networks down.

This writer has had a recent personal experience of McAfee suddenly billing for renewal on a system long out of service. VISA reversed the charge.

McAfee's testing department is possibly underfunded. Understaffed. This may lose the company some customers, but it perhaps saves some pennies overall.

It's an efficiency. Capitalism seeks efficiencies. Discovering a new efficiency edges the bottom line forward. Profit increases. The stock price rises.

The quality control department is not a profit center.

There may be a "right natural ratio" between money spent on development and money spent on testing new development. When testing funds are cut to bloat the bottom line, the income and then the budget of the whole company shrink to re-establish that right natural ratio.

Shrink is quickening into snap. McAfee's profits are down 30% for the quarter.

Microsoft itself has now called an end to the predator-prey virus game. It is providing free anti-virus software. A Windows user needs merely to go to Microsoft Updates and download their free Microsoft Security Essentials. It auto-updates with new virus information, just like the others. And MS has a well-funded testing staff.

(The reader may want to uninstall virus software you are not using. Even though it is no longer receiving updates, it may still be running, testing for the viruses it knows about, even as a newer replacement also tests. Your computer will run much faster with it uninstalled. One anti-virus is enough. This writer has also successfully used Clam-Win, a free groupware product.)

So another company has snapped. A good Irish one, too. Alas.


British Petroleum snapped a week ago.

A mile-deep well in the Gulf of Mexico, incompetently protected, failed to close automatically when its pumping platform blew up. The flow cannot be stopped for weeks or months. The slick already will coat northern Gulf Coast shores, destroying the fishing industry. It may reach the eastern seaboard, possibly even Europe.

British Petroleum will pay the cost of the cleanup. The U.S. government is doing the clean-up. Before it is over, British Petroleum may be called American Petroleum.

Capitalism is a wonderful environment at the beginning of a company's product life cycle. It allows borrowing money based on future expectations for sales and profit. There is a market to be met, new customers to add.

But for corporations that have maximized their growth, increasing their efficiency is the only way to get the stock price to rise. So they cut costs. They bring in hatchet-men to fire the dead wood. They save pennies every way they can. And then the next year they do it again. Until they snap.

And the whole world shrinks. The world shrinks for everyone.

So is investing in the testing system the key to future health and growth? Funding government-run quality control? Funding a better FDA, a better industrial safety system? Universal quality control?

Or should the perennial need for increased efficiency force corporations to skate ever nearer and nearer to the edge of the ice on safety?

Why should a company whose product life cycle has peaked be allowed to let efficiency decide that safety be damned? Should the world shrink?

Quality control is not a profit center. Except for the world.