Q&A with Jackie Fenn and Mark RaskinoMany books have covered the challenges associated with innovation. How does your book differ?
Other books about innovation focus mainly on how you originate new ideas. But the number of innovations your company actually creates is small compared with the number that it finds in the market, learns about in the press, or adapts from other company's ideas. Our book focuses on these types of external innovations, and offers managers a smarter way to make decisions about which innovations to adopt and when. The "hype cycle" model that we present in the book is the only one of its type that has moved beyond an abstract concept and been used in earnest as a working management decision tool for over a decade. It's a simple and highly visual way to represent the cycle of over-enthusiasm, dashed expectations, and eventual maturity every new innovation goes through. It also helps explain why people adopt, abandon, or ignore innovations inappropriately.
What causes the hype cycle?
The hype cycle arises from the interplay of two factors: human nature and the nature of innovation. Human nature drives people's heightened expectations, while the nature of innovation drives how quickly something new develops genuine value. The problem is, these two factors move at such different tempos that they're nearly always out of sync. An innovation rarely delivers on its promise when people are most excited about it. Expectations rise quickly and are easily frustrated, while innovations develop slowly, step by step.
Why do companies keep getting fooled by the hype cycle, even though it makes sense intuitively?
While most of us can see when a hype cycle is underway, we tend to exclude ourselves from the pattern. We think we're somehow different. Others rush lemminglike up and down the hype cycle, but not us. In fact, each of us is as capable of being as caught up as anyone else. Knowledge of the hype cycle can make us aware of its dangers but not impervious to them. Organizations need a systematic process that forces decision-makers to focus deliberately and continually on the organization's internal context. Otherwise, it's all too easy to subconsciously make decisions based on the lure of the bandwagon.
Explain how a company's "risk personality" factors into adoption decisions.
Organizations tend to have a dominant "enterprise personality" profile in regard to the risks of adopting innovations. Type A organizations are pioneers who consciously and aggressively adopt high-risk strategies to gain high-potential rewards and competitive advantage. Type B organizations are willing to support moderate risk taking in the adoption of innovation, and Type C organizations are cautious adopters of anything new. Organizations should recognize their risk comfort zones but be prepared to step outside them depending on the strategic importance of an innovation. We call this being "selectively aggressive."
One of the traps of the hype cycle is "hanging on too long." Companies often invest millions in the next big management trend, and then slowly realize that the "payback" is taking far longer than anticipated. How can a company decide whether to cut its losses or keep plowing forward?
Looking at sunk costs can lead you away from the key questions that should be asked throughout any project: "What is the best thing to do starting right now?" It is extremely important to assess periodically whether a major initiative still makes sense. Unfortunately most companies simply decide to proceed—even when they realize their original vision of the innovation is far off track—more out of fear of stopping than the value of continuing. Companies need to build in regular evaluation points to reassess decisions on the basis of the experience they are gathering about benefits, costs, and risks.
Can an innovation "fall off" the hype cycle before it ever reaches the Plateau of Productivity? How can you tell?
Signs that an innovation may be falling off the hype cycle into early obsolescence include a slowing adoption rate, even though the market is nowhere near saturated, with early adopters moving on to other approaches. The press and PR machines no longer cover the innovation, even in negative terms. Suppliers struggle, and investors are no longer interested in the market. When you spot these signals, it's usually time to let go and see whether there is an alternative and more viable approach to achieving the same goal. The good news is that much of the learning around integration, usage, and payback issues will be transferable to the new approach.
When it comes to the "Next Big Thing," it sounds like sometimes the smartest—and the hardest—decision a manager must make is to decide not to adopt.
No innovation, no matter how significant, justifies its own use. The "right" innovation is not the same for every individual or every company. Every innovation must be considered in light of some broader purpose it enables or fosters. In business, that means the goals and strategies of the organizations where we work. This is how companies end up falling into the trap of adopting too soon. During the Peak of Inflated Expectations, the focus is often on the innovation itself, and many organizations approach adoption with the question "Where can we use this?" rather than "Should we use this?" When that happens, projects will be identified that can certainly derive some value from the innovation, but not enough to justify the high price and unknown risks of early adoption.
Does your work with the hype cycle provide any predictions for what the future of innovation might look like in the coming years?
Emerging economies like India and China will expand the sources of innovation. Companies that once originated their own innovations will be much more prone to buy innovation capabilities from the outside. Innovation adoption will be made easier and more granular though technologies delivered over the Web, such as software-as-service. Innovations like low cost 3-D printers will create an explosion of choice and speed up process change in the world of physical innovations. These improvements to the efficiency of adoptive innovation are likely to increase the overall speed of the hype cycle. Overall, we�ll see many more innovations, many more hype cycles, and a need for adoptive innovators to pay very close attention to what�s going on. The sharpening of these cycles will tend to make timing issues more acute, windows of opportunity shorter, and the consequences of missing an opportunity potentially more hard hitting.
Jackie Fenn is a Vice President and Gartner Fellow in Gartner Research, leading their research in emerging technology management and emerging trends. She is the originator of the Gartner hype cycle model, which has been adopted by press and organizations worldwide.
Mark Raskino is a vice president and Gartner Fellow at Gartner Research. He has delivered keynote presentations on technology topics in over 25 countries, and consults for CIOs in many organizations.