Innovations often fail – not because they don’t deliver value - but because marketers don’t effectively address the behavioral and human factors that drive the adoption of something new.
One useful framework for ensuring that your innovation is “adoption-friendly” was developed by Everett M. Rogers, a Sociology and Statistics Ph.D., who pioneered the study of innovation diffusion patterns in social systems – including social programs, fads, and products and services. His work is especially applicable to evaluating new technology in IT - namely the behavioral factors that enable or impede the acceptance of a new technology, service, or policy innovation.
Rogers posited five basic factors that govern the rate of the Diffusion of Innovation (DOI). Technology innovators should plan to address all the factors on this checklist in order to maximize their probability of success.
Relative Advantage - The degree of incremental benefit produced by an innovation is the most obvious diffusion driver. ROI analysis is typically used to represent Relative Advantage. Any collection of quantifiable business-process metrics will suffice (i.e., lower operational and capital costs, higher throughput, higher availability, speed to solution, speed of deployment, lower risks, fewer help desk queries, higher average order sizes, etc.). Relative advantage can also include satisfying the needs of underserved markets with products barely good enough for their usage.
While the demonstrated return is an essential ingredient of adoption, a narrow focus on relative advantage can distract the innovator from other characteristics of a new offering required for successful adoption.
Compatibility – Successful adoption also depends on how well the innovation aligns with the operational methods, values, and systems now in place. Familiarity is an important source of incumbent advantage – starting with the purchase process and continuing through operational processes and service and support programs. Innovation that alters business policies, processes, or organizational relationships is at a distinct adoption disadvantage.
The compatibility challenge might manifest itself in terms of costs related to training and process burn-in, organizational friction, and disappointing business results. With the right commitment and solution horizon, this sort of process reengineering can have long term benefits, but it is a near term barrier. For all its potential benefits, CASE struggled years ago (remember the spectre of Japanese Software Factories?) in large part because its discipline represented a paradigm shift in methods, values, and systems of development. An innovation should look as much like what its replacing as possible.
Complexity – “Keeping it Simple” is even more important when it comes to technology innovation. Difficult implementation and usage processes – regardless of the potential advantage and fit with business policies and practices - are obstacles to adoption.
Ambitious projects with huge potential pay-offs may have a high and often unacceptable risk of failure as a function of poor process assumptions, lack of skills, suitable time horizon, and technology shortfalls. While there are substantial learnings from such projects – few enterprises outside the Department of Defense can absorb this scale of project failure. The risk:reward horizon for most enterprises is much shorter – making the inherent risks of complexity, per se, a significant barrier to adoption.
Customer complaints about “qualified” channel partners who can’t actually build their parner's solution illustrate the complexity challenge.
Trialability - The real world evaluation of relative advantage, compatibility, and complexity is central to the adoption of innovation. In addition, new technology evaluation absorbs staff resources and opportunity costs just to verify its value and assess risks. An innovator should provide a prospect with a no or low cost method to experiment and verify the value. Support may need to be part of that trial.
Observability - How can you tell (and explain to the Board of Directors) that a new technology or process makes a difference and should be adopted? It is vital that the mechanism of value resonate with the users and managers who must rely on it – especially senior managers to whom the internal champion must justify the investment. Having to explain the mechanism of virtualization to the Executive Committee of a Small Business can be a barrier to adoption.
Variations on the Diffusion of Innovation Framework
An elaboration on the DOI framework was developed by Fichman and Kemerer in 1993. While their additions are arguably embedded in Rogers’ original 5 factors – they help illuminate how the Rogers’ factors have played out in the technology industry. Prior technology drag - Maturity and inertia of installed technology have a powerful impact on how rapidly new technology can be absorbed. Network effects are an example of prior technology drag – solutions that make it harder to participate in important internal and external networks or operate existing processes raise the barriers to adoption.
Irreversibility of investments – There is a substantial risk in requiring an all-or-none commitment to an innovation. If the innovation requires replacing (or outsourcing) current staff skills with new ones, the old skills may be lost if the innovation fails. A successful innovation will mitigate that risk somehow. Poor 3rd party service is very difficult to accept because rebuilding the capabilities internally can be onerous.
Sponsorship – A single or highly aligned sponsorship of an innovation will convince prospects that there will be a roadmap, standards, and continued investment in the technology. In their spheres, Microsoft, IBM, HP, Cisco, and other industry leaders can make or break an innovation just by acquiring it. Venture funding can be a marker for potential success, but when it comes to implementing actual products, it is important to understand who’s committed to its success.
Expectations - Widespread customer belief that an innovation will work and be accepted is important to many customers who do not have the wherewithal to evaluate and judge the potential value of a new technology. The wisdom of the herd can create significant momentum for an innovation – but the other factors must be aligned for the momentum to continue.