Innovation – Diffusion of innovation
In the previous article, I stated the case for execution being dependent on the application of structured disciplines such as project management. However, the innovation process does not stop when the new product or service has been delivered; the possible clients still have to adopt the use of the new product, also referred to as innovation diffusion. I have to accentuate here that it is not the same as commercialisation. Commercialisation is a more holistic concept and includes many other aspects such as pricing, logistics, marketing and advertising, after sales service etc. Diffusion is only one part of the commercialisation concept. Also take into consideration that not all innovations are destined for commercialisation, innovation can have an internal focus as well, e.g. improvement of the efficiency of an internal process leading to a reduction in cost.
In marketing science a lot of research has been done to explain how, why, and at what rate new products spread through the market. Most readers will probably be well acquainted with the bell curve indicating this process and where consumers are classified into “innovators”, “early adopters”, “early majority”, “late majority” and “laggards”, based on the time it takes for consumers to adopt a new product. Marketers are particularly interested in the diffusion process as it determines the success and failure of any new product introduced in the market. Their aim is usually to achieve the largest amount of adoption within the shortest period of time. Thus, it is important to understand the diffusion process so as to ensure proper management of the spread of the new product.
However, the time for customers to embrace new offerings is always longer than you expect it to be – new ideas spread slowly. There are two factors that contribute to the length of time it takes. The first is that for genuinely new products and services, you often have to build a new business model around it. This process first involves customer discovery – finding out who will benefit from your new idea and what value you are creating for them. Secondly you have to validate your assumptions about how to best provide this value – this is the process of testing all the parts of your business model. One big challenge here is that customer discovery and validation requires completely different skills than you needed to solve the technical problems during the invention phase.
So the big question becomes: How do you ensure successful diffusion of your (new) product? Unfortunately there is no silver bullet here, but there are certain actions an organisation can take to improve the chances of success. Proper market research is essential, get customer’s insights before you launch, basically the customer discovery process mentioned above. An organisation must also eccept that innovation is about risk and possible failure. I have talked about this element many times. Henry Petroski said that success is a great inspirer but a lousy teacher, the reason being that when you succeed you never know how close to failing you actually are, which in some cases can have devastating consequences. Imagine if the Titanic had made it for example, with all its weaknesses leading the way for other ship manufacturers to “improve” its construction, hence putting many more passengers at risk. Instead the shipping industry improved from the Titanic disaster (life boats for all passengers, radar, etc.). Organisations should prototype and launch as quickly as possible and always keep in mind that if you fail, you should fail fast, cheap and early, and take the lessons and improve, in essence the “test your assumptions” process.