Product companies are always highly optimistic about the rate in which customers will rush to adopt new innovation. And they are often disappointed.
They are often disappointed and frustrated when the marketing campaigns, press releases and early-adopters sales campaigns yield just that—early adopters that appear to be perfect candidates to exploit the benefits of the new product, yet wide adoption seems to always be in the distant future.
There is always a time lag between innovation adoption and organizational adaptation. Vendors often mistake early small volume buyers and mere tire-kickers for their organization’s willingness and ability to adapt to the changes imposed by the technology and must be heeded before realizing its benefits.
The Internet of Things (IoT) is a good example. Over the last two decades, IoT was heralded as the next big thing in supply chain and equipment maintenance. Yet, by any account, enterprise adoption has been disappointing sluggish. And the same is likely to happen with artificial intelligence that dominant today’s industry headlines.
The lag between the introduction of a new technology and its meaningful adoption—having an observable impact on consumers or businesses—is not a modern-day phenomenon. In a 1930 article titled Economic Possibilities for our Grandchildren, the economist John Maynard Keynes wrote: “We are suffering … from the growing pains of over-rapid changes.” He further explains: “The increase of technical efficiency has been taking place faster than we can deal with the problem of labour absorption; the improvement in the standard of life has been a little too quick.”
The telephone is a good illustration of the slow pace of technology adoption. When Bell System introduced the first two-way long-distance telephone call in 1876, the intended benefit was to deliver messages more conveniently and cheaply than Western Union telegraph service.
It took many years for the telephone to become a household item to communicate with family and friends (and eventually with businesses). In 1940, less than 40% of households in the US had a telephone.
Technology adoption rates used to be slow, easing the inevitable behavioral and social changes it brings.
Today, the adaptation lag can be extremely short. So short it seems to not exist at all. Consumers are lining up for hours to purchase the most recent smartphone for many hundreds of dollars with no clear benefit (unless one belongs to a class in which merely owning tomorrow’s fashionable tech is, in itself, carries some value).
The same is not true in industry, where we usually observe a significant lag between technology adoption and organizational adaptation. In the case of the Internet of Things the adaptation—or as we refer to it nowadays “digital transformation”—is complex and slow, thereby delaying the realization of the benefits of the technology. And as I pointed out in another post, throwing more technology on top of the already complex IoT technology heap is not helping.
Vendors and early adopters alike must recognize and plan for the inevitable lag that delays gaining benefits.
This is not simply a matter of time as one might infer from Gartner’s influential Hype Cycle. What moves an emerging technology across the “Trough of Disillusionment” and onto the “Slope of Enlightenment,” to use Gartner’s language? This is the point where the organization begins its adaptation journey.
Nor is it simply a matter of understanding buyer personas and identifying the visionaries and the pragmatists in the buying organizations as suggested in Geoffrey Moore’s Crossing The Chasm. While focusing initially on a narrow market segment and establishing a beachhead is a good advice to drive adoption, the next adaptation phase can be frustratingly long.
Technology vendors will find that organization adaptation is not only longer than they have anticipated, but that in some instances it cannot be accelerated from the outside. Again, the Industrial Internet of Things is a good proxy. While the promised business value of IoT should serve as a catalyst to move quickly from prototyping and proof of concepts to enterprise-wide transformation, the simple fact is that most manufacturing plants are old, and modernizing brownfield factories is an expensive and prolonged endeavor.
A final point is the question of return on investment in new technology implementation. Most companies require a solid ROI analysis before they commit to any type of technology implementation. I have often opined that certain technologies, IoT being a prominent example, should be considered a strategic investment and therefore not subject to the strict guidelines of economic ROI. I believe that this perspective can encourage corporate management to start the transition from adoption to adaptation sooner.