What sort of organisations and people are early adopters of disruptive innovation? Why do they chose to be early adopters and not just fast-followers?
In my personal life I have always been quick to adopt new technologies. On a professional level I have been lucky enough to work with organisations that see being innovative as crucial.
But what are the qualities and differences between organisations that chose to be early adopters?
Differences between early adopters of disruptive and sustaining innovations
I have been reading the above paper by Reinhardt & Gurtner (2015). The paper asks how can a deep understanding of why an innovation is successful be achieved without knowledge of the early adopters? It looks at how previous researches have tried to establish characteristics of early adopters. Also, it highlights risks of not differentiating between types of innovation and their types of early adopters. The research investigates the systematic differences and similarities between:
- Early adopters of disruptive innovations; and,
- Early adopters of sustaining innovations.
It benefits from a large varied sample of consumers and suggests there are differences between these groups.
They find early adopters of disruptive innovations are generally more knowledgeable of the product domain. That said consumers who purchase sustaining innovations relatively early are more involved with the product domain. The suggestion is that organisations need to address and market to these early adopters differently. They should differentiate both product development and marketing strategies to align with innovation type.
The theory of disruptive innovation
Theory suggests a need to differentiate between innovative customers (Christensen 2013). When organisations listen to current customers’ opinions about product they often allocate resources to insufficient or unsuitable technologies. The technologies their customers reject often displace these. Research suggests that if organisations view their current customers as the same as their potential customers they will increase their risk of failure
(Christensen & Bower 1996). A good example in the paper is BlackBerry customers who were satisfied with the integrated keyboard in their devices and initially rejected touch-screens because they by nature did write lots emails each day. Because of this BlackBerry decided not invest in touch-screen smartphones, although they had opportunity to do this. But this strategy did not work! Consumers made the switch to touch-screen smartphone technologies and both Apple and Android devices have practically displaced BlackBerry.
But as a business how do you address this problem?
Do you consider that both early adopters of disruptive innovations and those of sustaining innovations have different needs and characteristics? How do you change marketing approaches for these different consumers?
Disruptive innovation theory (Christensen 2013; Christensen & Bower 1996; Christensen & Raynor 2003) has impacted both academic and industry practice. It challenges the assumption that organisations fail because of technological change that challenges their core competencies (Christensen & Bower 1996). Actually disruption seems to occur when established market mainstream customers reject innovations that they consider as underperforming.
Often new disruptive products underperform in performance dimensions that customers value. That said often they perform better in a secondary performance dimensions or are cheaper. Organisations often dismiss these disruptive innovations because current customers ask them for improvements to primary performance dimension. They do not value the increased performance in the secondary performance dimensions or the lower prices. This means that entrants develop these disruptive innovations and sell them to niche and emerging markets.
Eventually adoption of the disruptive innovation gains traction
But as time passes both the disruptive innovation and existing products and technologies improve in their primary performance dimensions. Even though the disruptive innovation perhaps continues to underperform in comparison to existing products, often the level of performance has become sufficient for mainstream customers to adopt the new disruptive product. Customers begin to switch from the old to the new technology! At the same time the likelihood that the disruptive innovation will displace the existing product increases (Christensen & Bower, 1996).
Organisations often reject future disruptive technologies under-estimating their value in developing new customers and markets. Instead they look to their established customer base who require sustaining innovations that improve performance along the dimensions that they have always valued (Christensen 2013). The TV industry is a good example which continues to offer improvements in picture quality. The moves from black and white to colour and HD to 4K and 3D are examples of this sustaining innovation.
But the theory does not explain how early adopters of disruptive innovation and customers of sustaining innovations are different psychologically. It also does not consider how in some ways they are similar in nature.
Are you and early adopter of technology?
My research is about how organisations can include disruptive and emerging technologies in their business strategies. Do they feel they receive advantage by doing so? Do they feel they open themselves up to new markets and what are the challenges? I would really like to hear from organisations that consider staying on top of these technologies is crucial to increasing their competitive advantage.
Part 1 // Part 2