DEVELOPING A DIFFUSION STRATEGY: TAKING THE TECHNOLOGY TO THE MARKET PLACE
Developing a diffusion strategy involves a number of activities and many people. This section looks at each of these activities separately but in a real situation many of these activities may go on concurrently. Some people in the organisation will participate only at certain stages, while others will have continuing roles. Thus, the development and implementation of a diffusion strategy requires effective management.
A. Assess the Organisational Climate: An important factor related to successful diffusion is an organisational climate that supports diffusion and innovation objectives. To facilitate this it will be useful to list a set of organisational attitudes and objectives that can support the innovation and diffusion process. These objectives could include the need to orient to the future, for timely action, to anticipate changes, threats, and opportunities, and for all members of the organisation to play a role in launching an innovation. In addition to communicating these objectives throughout the organisation management must initiate programmes and practices that make these objectives a living force.
Studies of successful diffusion show that one of the most consistent features is the presence of dedicated people who persist in their efforts. Such people are called “technology champions” or “change agents”. How well an organisation nurtures such people and understands and supports the process is an important element of the organisational climate.
How management structures and controls the organisation has a profound impact on the diffusion process. There, has to be a balance between a centralised decision making structure and decentralised operations. The number of layers through which a new technology idea must be cleared before it can be implemented has a significant impact on the speed with which the diffusion can take place.
Leadership style also affects the diffusion strategy. If the style is authoritarian, dissenting voices may not be heard and assenting voices may be amplified. But the organisation can take quick action. If the style is too participatory, the action may be slow but major mistakes can be avoided. The ideal would be a leadership style that is clear and gives urgency a high priority.
B. Understand the role of “Technology Champion”: The change agent or technology champion must play a bridge role within and outside the organisation. Within the organisation the change agent should provide communications between the marketing and the R&D organisation. In market driven organisations, the main directions for technological innovation come from marketing. R&D’s reaction comes in the form of guidance on what is technically feasible and ideas from scientific circles.
A technology driven organisation offers a marked contrast, as R&D drives the stimulus and marketing officials must find applications. These efforts can help create new markets by applying technological breakthrough to largely unperceived needs. In India, technologies and products are mostly market driven while in industrialized countries markets are mostly technology driven.
When introducing a new technology to potential customers outside the organisation the change agent must explain the need for the technology: Demonstrations, films, or other techniques can help the customer to become aware of the need for the new technology. The change agent must show real interest in the user’s problems and prove it in his or her behaviour. Should the firm invest in a technology suitable for production of large volume of communication cables when the customer wants to produce a limited quantity of cables only? The change agent should be sensitive to the users’ needs and help the user to overcome problems he encounters.
C. Define the Profile of the Technological Innovation: Different types of technological innovation require different diffusion efforts. If the technology is new to both the market and the company, adopters of the technology have to be educated on its use. Diffusion efforts may have to overcome resistance to the complexity of the technology (as with fibre optics) or social or cultural barriers (birth control devices).
In contrast, if the technology is a modification or improvement of an existing technology (Example: energy saving process), diffusion efforts must stress the superior attributes of the new technology:
D. Use Opinion Leaders: An important part of the diffusion strategy is the identification of opinion leaders, assessment of their orientation (towards acceptance or rejection), assessment of their scope of influence, and development of ways to influence them. Such leaders influence opinions and actions in informal ways. They are people or institutions whose information and opinions are sought on subjects in which they are considered experts. They are technology gatekeepers and feel qualified to evaluate a technology and market gatekeepers who feel qualified to describe what people want to buy. Their influence is often extensive because they tend to have a large number of acquaintances and because they play the role of bringing people of related interests together. A good example is the position that various individuals and organisations took towards C-DOT’s switching technology.
Change agents must develop strategies for reinforcing those opinion leaders who favour the innovation and technologies and reducing the opposition of those who are negative. Assessing the ratio of positive to negative opinion leaders and their relative influence is also important.
E. Develop a Communication Strategy: Developing a communication strategy is one of the major tasks of the diffusion process. To achieve successful communication, the organisation must relate the innovation’s attributes to customer needs. If an analysis of the user’s situation and capabilities indicates that service may be a problem, then communications should describe how service will be provided. The change agency must show, through its communications, that it wants to be useful by meeting customer needs and that it is willing to learn from its customers. The company’s messages must also prove its reputation for reliability, honesty, and thoughtfulness in fact, what the company communicates about itself is almost as important as what it communicates about the innovation. For example, Motorola, a US based semiconductor and communication company which is trying to introduce cellular technology in India, considered elitist (in some quarters), has been advertising extensively in the media portraying it as a technology for development of rural India.
Communications: Two areas of communication are within the organisation -internal communication and with agencies outside the organisation -external communications.
Internal Communication: Successful communication leads to action and many factors affect success in the communication process. The innovator or the innovating group must describe the innovation in terms that enable others to work on its behalf. Thus, facilitating communications between R&D and marketing is a continuing management task. The message to internal corporate decision-makers should include realistic estimates of the initial resource requirements, staff, time, and money required to launch the innovation.
A company’s system for processing innovations can smooth and speed the flow of the diffusion process during the internal stage. Such systems use standard criteria to judge innovations, give feedback to the source, and identify the product champions who will nurture the innovation to successful commercialisation. If the originator understands how the development process works and is aware of the problems usually encountered at each stage, he or she can often help overcome the difficulties or suggest ways to capitalise on the strengths of the innovation.
External Communications: Once a technological innovation is transformed to a prototype or a sample for field trial, the focus of the diffusion effort changes from internal to external communication – getting the word to potential adopters. The content of the message is largely guided by the:
a) attributes of the innovation, and
b) the characteristics of the target market of the technological innovation.
Attributes of the Innovation: It is widely recognised that five general attributes of innovations are useful in preparing messages: (i) relative advantage, (ii) compatibility (iii) complexity, (iv) testability, and (v) visibility. To convey these attributes to potential adopters, the change agent must discover what the customer seeks, thinks, and feels.
i) The relative advantage of a new idea helps determine its rate of adoption. The factors that affect the perception of the relative advantage, and which are however, important parts of the message, include the innovation’s comparative cost, the savings in time or effort it provides, and how soon it is available (most companies want it as soon as possible). Companies can reduce the perceived risk of trying an innovation by offering performance guarantee (like yield for a new process). Societal factors may also affect the customer’s perception of relative advantage. For example, the oil crisis increased interest in energy saving technologies for automobiles, power generation etc.
ii) Compatibility is the degree to which potential adopters see an innovation as consistent with their values, experiences and needs. The organisation should see if the new technology suits the current or evolving customs or beliefs, symbols of acceptance and status, and previously introduced ideas. For example, many organisations that have traditionally been in the low technology engineering sector are diversifying into high technology computers and communication areas as these are supposed to have a higher status in the business world today.
iii) Complexity is the degree to which an innovation is relatively difficult to understand and use. Organisations seeking to introduce technologies that are difficult to use or understand must concentrate their efforts on developing simple how-to-use and how-to-understand explanations. The computer industry’s emphasis on developing user-friendly menu driven software technology is one example of efforts to overcome user’s resistance to perceived complexity.
iv) “Testability” is the degree to which potential adopters can experiment with an innovation on a limited basis. Development of such opportunities is an important diffusion activity. For example, modular switching technology not only facilitates absorption it also allows for testing the basic building blocks. This in turn facilitates decision making on acquiring technology for larger units.
v) Visibility is the degree to which the results of a new technology are apparent to others. When digital technology was first introduced for telephone communication the users could clearly perceive a significant difference in the quality of the call; and the adoption of digital technology by telephone companies proceeded at a rapid rate. These five general categories of attributes are only a sample of those available for use in structuring messages to potential adopters. A firm can run into problems if it uses these categories without careful thought about how they apply to the company’s technological innovation.
c) Characteristics of the Target Market: To reach business prospects, the message must relate the important attributes of the technological innovation to both executive management and the group in the customer organisation that would actually use it. Discovering the attributes desired by the dominant decision making group in the customer company may well be an important prelude to designing communications to hasten adoption. While including concern for the needs of the actual users at the initial stage may prolong the adoption period but it will increase the endurance of the innovation.
Communication Channels: Two principal modes of communication for message about innovation are the mass media (radio, TV, film, newspaper, magazines) and interpersonal channels (word of mouth, trade shows, demonstrations etc.)
The mass media are relatively quick in beaming the message to many people. However, since it tends to be one way, the lack of feedback about customer reception makes the media less effective than interpersonal communication in moulding attitudes to the new technology. This may be suitable for simple technology like food preservation/processing with potential for large number of customers spread over a wide area.
Interpersonal communication has an important influence in promoting diffusion. Particularly in the areas of high technology where there has to be a dialogue between the innovator and the potential customer, a strong relationship exists between understanding a technological innovation and being influenced to buy.
F. Assess the Life of the Technological Innovation
The life of the technology can be extended by incorporating feedback about the customer’s reaction to the technology to remedy defects and develop a new generation of the same technology. The organisation selling the technology can enhance its life by providing opportunities for the users to participate in a network with other users to observe the application of the technology wherever feasible. A longer life is certain if the innovation meets a well defined customer need that the seller understands. The seller must remain aware of any changes in customer needs and modifications that would meet those changing needs.
Renewal of the technological innovation/diffusion cycle requires a continuous programme for reassessing the needs of customers, competitive and regulatory threats, opportunities to serve industries that have not been served, and imaginative tailoring of the technology to meet new needs.