Introduction

The process of translating an idea or invention into a good or service that creates value or for

which customers will pay. To be called an innovation, an idea must be replicable at an

economical cost and must satisfy a specific need. Innovation involves deliberate application

of information, imagination and initiative in deriving greater or different values from

resources, and includes all processes by which new ideas are generated and converted into

useful products. In business, innovation often results when ideas are applied by the company

in order to further satisfy the needs and expectations of the customers. In a social context,

innovation helps create new methods for alliance creation, joint venturing, flexible work

hours, and creation of buyers' purchasing power. Innovations are divided into two broad

categories:

1. Evolutionary innovations (continuous or dynamic evolutionary innovation) that are

brought about by many incremental advances in technology or processes and

2. Revolutionary innovations (also called discontinuous innovations) which are often

disruptive and new.

Innovation is synonymous with risk-taking and organizations that create revolutionary

products or technologies take on the greatest risk because they create new markets.

Imitators take less risk because they will start with an innovator's product and take a more

effective approach. Examples are IBM with its PC against Apple Computer, Compaq with its

cheaper PC's against IBM, and Dell with its still-cheaper clones against Compaq.

Stages of Innovation

The innovation is divided into five stages and they are as follows :

Stage 1: Idea Generation and Mobilization

The generation stage is the starting line for new ideas. Successful idea generation should be

fueled both by the pressure to compete and by the freedom to explore. IDEO, the product

development and branding company based in Palo Alto, California, is a good example of an

organization that encourages successful idea generation by finding a balance between

playfulness and need.

Once a new idea is generated, it passes on to the mobilization stage, wherein the idea travels

to a different physical or logical location. Since most inventors aren’t also marketers, a new

idea often needs someone other than its originator to move it along. This stage is vitally

important to the progression of a new idea, and skipping it can delay or even sabotage the

innovation process.

Stage 2: Advocacy and Screening

This stage is the time for weighing an idea’s pros and cons. Advocacy and screening have to

take place at the same time to weed out ideas that lack potential without allowing

stakeholders to reject ideas impulsively solely on the basis of their novelty. The authors

found that companies had more success when the evaluation process was transparent and

standardized, because employees felt more comfortable contributing when they could

anticipate how their ideas would be judged. For example, one software engineer from an

information technology organization said, “One of the things I have struggled with is

evaluations of my ideas. Some of my ideas light up fires around here, while others are

squashed. . . . Needless to say, I grow skeptical when [the executives] ask for ideas and then

do not provide feedback as to why an idea was not pursued.”

Stage 3: Experimentation

The experimentation stage tests the sustainability of ideas for a particular organization at a

particular time — and in a particular environment. At this stage, it’s important to determine

who the customer will be and what he or she will use the innovation for. With that in mind,

the company might discover that although someone has a great idea, it is ahead of its time or

just not right for a particular market. However, it’s important not to interpret these kinds of

discoveries as failures — they could actually be the catalysts of new and better ideas.

Washington Mutual Inc.’s recent interior redesign provides a good example of how

successful experimentation works. Instead of applying a new design to all its branches, the

banking and insurance company, headquartered in Seattle, Washington, implemented the

design in just a couple of locations to see how it would be received. Subsequently, when

customers responded favorably, the bank took its innovation to the next level, applying the

new design to several other branches. This way, the company didn’t lose money and time by

applying a new idea all at once without knowing if it would succeed.

Stage 4: Commercialization

In the commercialization stage, the organization should look to its customers to verify that

the innovation actually solves their problems and then should analyze the costs and benefits

of rolling out the innovation. The authors make sure to note that “an invention is only

considered an innovation [once] it has been commercialized.” Therefore, the

commercialization stage is an important one, similar to advocacy in that it takes the right

people to progress the idea to the next developmental stage. For example, one chief executive

officer said, “We learned a simple thing: Researchers and idea creators do not appreciate the

nuances of marketing and commercialization. . . . In the past, we tried to get the researchers

involved in the commercialization aspects of the business. . . . The end result was pain and

more pain.”

Stage 5: Diffusion and Implementation

The diffusion and implementation stages are, according to the authors, “two sides of the same

coin.” Diffusion is the process of gaining final, companywide acceptance of an innovation,

and implementation is the process of setting up the structures, maintenance and resources

needed to produce it. A good example of a successful approach to diffusion comes from

International Business Machines Corp., which involves its employees early in the idea-

generation stage and conducts so-called innovation jams, to which they invite not only

employees but also clients, business partners and even employees’ families. IBM aids later

diffusion by giving everyone a stake in the idea from the beginning.

Diffusion of Innovation (DOI) Theory

It was developed by E.M. Rogers in 1962, is one of the oldest social science theories. It

originated in communication to explain how, over time, an idea or product gains momentum

and diffuses (or spreads) through a specific population or social system. The end result of this

diffusion is that people, as part of a social system, adopt a new idea, behavior, or product.  

Adoption means that a person does something differently than what they had previously (i.e.,

purchase or use a new product, acquire and perform a new behavior, etc.). The key to

adoption is that the person must perceive the idea, behavior, or product as new or innovative.

It is through this that diffusion is possible.  

Adoption of a new idea, behavior, or product (i.e., "innovation") does not happen

simultaneously in a social system; rather it is a process whereby some people are more apt to

adopt the innovation than others.   Researchers have found that people who adopt an

innovation early have different characteristics than people who adopt an innovation later.

When promoting an innovation to a target population, it is important to understand the

characteristics of the target population that will help or hinder adoption of the innovation.

There are five established adopter categories, and while the majority of the general

population tends to fall in the middle categories, it is still necessary to understand the

characteristics of the target population. When promoting an innovation, there are different

strategies used to appeal to the different adopter categories.

1. Innovators - These are people who want to be the first to try the innovation. They are

venturesome and interested in new ideas. These people are very willing to take risks,

and are often the first to develop new ideas. Very little, if anything, needs to be done

to appeal to this population.

2. Early Adopters - These are people who represent opinion leaders. They enjoy

leadership roles, and embrace change opportunities. They are already aware of the

need to change and so are very comfortable adopting new ideas. Strategies to appeal

to this population include how-to manuals and information sheets on implementation.

They do not need information to convince them to change.

3. Early Majority - These people are rarely leaders, but they do adopt new ideas before

the average person. That said, they typically need to see evidence that the innovation

works before they are willing to adopt it. Strategies to appeal to this population

include success stories and evidence of the innovation's effectiveness.

4. Late Majority - These people are skeptical of change, and will only adopt an

innovation after it has been tried by the majority. Strategies to appeal to this

population include information on how many other people have tried the innovation

and have adopted it successfully.

5. Laggards - These people are bound by tradition and very conservative. They are very

skeptical of change and are the hardest group to bring on board. Strategies to appeal to

this population include statistics, fear appeals, and pressure from people in the other

adopter groups.

The stages by which a person adopts an innovation, and whereby diffusion is accomplished,

include awareness of the need for an innovation, decision to adopt (or reject) the innovation,

initial use of the innovation to test it, and continued use of the innovation. There are five

main factors that influence adoption of an innovation, and each of these factors is at play to a

different extent in the five adopter categories.

1. Relative Advantage - The degree to which an innovation is seen as better than the

idea, program, or product it replaces.

2. Compatibility - How consistent the innovation is with the values, experiences, and

needs of the potential adopters.

3. Complexity - How difficult the innovation is to understand and/or use.

4. Triability - The extent to which the innovation can be tested or experimented with

before a commitment to adopt is made.

5. Observability - The extent to which the innovation provides tangible results.

Limitations of Diffusion of Innovation Theory

There are several limitations of Diffusion of Innovation Theory, which include the following:

Much of the evidence for this theory, including the adopter categories, did not

originate in public health and it was not developed to explicitly apply to adoption of

new behaviors or health innovations.

It does not foster a participatory approach to adoption of a public health program.

It works better with adoption of behaviors rather than cessation or prevention of

behaviors.

It doesn't take into account an individual's resources or social support to adopt the

new behavior (or innovation).

This theory has been used successfully in many fields including communication, agriculture,

public health, criminal justice, social work, and marketing. In public health, Diffusion of

Innovation Theory is used to accelerate the adoption of important public health programs that

typically aim to change the behavior of a social system. For example, an intervention to

address a public health problem is developed, and the intervention is promoted to people in a

social system with the goal of adoption (based on Diffusion of Innovation Theory). The most

successful adoption of a public health program results from understanding the target

population and the factors influencing their rate of adoption.