15 Sep 2020 | Insights
It cannot be denied that the contrition and property industry has been exposed to a wide range of innovation over the past 20 years as the sector has been going through a digital transformation.
If we are going to continue to innovate and adopt new thinking we need to understand how and why people adopt new ideas, practices, and tools.
This is a huge field of science; however, Everett M. Rogers provides a very useful overview in his book ‘Diffusion for Innovation’. It explains many things about why people behave the way they do and provides clues as to what we could do to change how people behave.
Introduction & Definitions
The starting point is to understand the term diffusion:
Diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system.
Within this definition there are other words to be defined.
An innovation is an idea, practice, or object that is perceived as new by an individual or other unit of adoption.
Innovations are diffused through communication channels:
A communication channel is the means by which messages get from one individual to another.
Many kinds of communication channels exist, and each may have different properties regarding the diffusion of innovations through them. Rogers identifies two distinct classes of channels: mass media and interpersonal channels.
Mass media broadcast messages — such as news, educational information, or entertainment — from a sender to many receivers.
Interpersonal channels between individuals allow for exchanges between them that can go back and forth.
While mass media are initially important to spread awareness about an innovation, interpersonal networks become more important over time as people turn to their peers for opinions on and evaluations of new ideas.
Time is also an important aspect: diffusion is a process that unfolds over time. Thus, time is relevant when investigating how an individual or other unit of adoption gradually changes their knowledge or decision to adopt, and their behaviour.
Time is also an important measure when categorising adopters into different categories or when determining an innovation’s rate of adoption.
Diffusion happens within a social system:
A social system is defined as a set of interrelated units that are engaged in joint problem solving to accomplish a common goal.
For social systems, diffusion research distinguishes between two different structures. The social structure influences diffusion through values, norms, roles, and hierarchies whilst the communication structure determines how messages flow through the social system.
The Innovation-Decision Process
The innovation-decision process describes how individuals — or other decision-making units, such as groups or communities — adopt or reject an innovation. The goal of this process is to reduce the uncertainty about an innovation.
It is comprised of five steps that do not necessarily need to follow each other consecutively.
The innovation-decision process for individuals according to Rogers.
1. Knowledge: The individual becomes aware of the innovation’s existence and starts to understand how it works.
2. Persuasion: The individual develops an attitude towards an innovation.
3. Decision: An individual who is aware of an innovation and has formed an attitude towards it will at some point decide whether to adopt the innovation.
4. Implementation: The individual starts using the innovation. They continue learning about it and overcome problems, further reducing the innovation’s uncertainty.
5. Confirmation: After implementing an innovation, an adopter will continue to collect information that reinforces their decision. If this leads to conflicting information, the adoption may be reversed.
Similar to what happens in a marketing funnel, each stage in this process has the potential for the individual to reject the innovation, e.g. by forgetting about it after the knowledge stage or by simply not acting upon their positive attitude towards the innovation.
The latter phenomenon is called the Knowledge-Attitude-Practice gap (KAP-gap). It describes the situation in which individuals have gained awareness and how-to knowledge about an innovation, have formed a favourable attitude towards it, but do not act upon it.
It often occurs for preventive innovations: those of which that can prevent or mitigate an undesirable future event. Because the effect of adopting the innovation is a “non-event” — something not happening — getting access to the benefits of the innovation does not seem a pressing issue, even when the general attitude towards the innovation is positive.
Using the average time of adoption for a sector time of adoption, businesses or individuals can be associated with one of the following five adopter categories.
The categorisation of adopters.
Different characteristics to each adopter category:
1. Innovators: Innovators are interested in new ideas. They are less connected to their local peer networks and keep relationships with other innovators that might be geographically distanced.
To support their affinity for novelty, uncertainty and risk, they need sufficient financial resources, they must be able to understand technical concepts and need to be able to cope with uncertainty.
Innovators play an important role in the diffusion of innovations. Their relationships, especially those to other innovators, allow them to import new ideas into their local peer networks.
2. Early Adopters: Compared to the innovators, early adopters are oriented more towards their local peer networks. They are respected by their peers, who often refer to them for advice and information about an innovation.
Early adopters serve as role models for other members of a social system. Once they have adopted an innovation, they communicate their evaluation of it to their peers, who use this evaluation to reduce their own uncertainty about an innovation. Through this process, early adopters can support an innovation in reaching the critical mass that enables the innovation to become adopted more widely.
3. Early Majority: A third of the adopters in a social system are in the early majority. They adopt new ideas just before the average member does.
While they do not lead adoption and do not serve as opinion leaders, their interconnectedness in the social system makes them an important link in the diffusion of innovations.
4. Late Majority: Just like the early majority, the late majority constitutes a third of the adopters in a social system. They adopt new ideas after the average member has done so. Their reasons for adoption are often economic necessity or increasing peer pressure.
Because of their lower resources, members of the late majority are sceptical about innovations, they need to be sure that the investment will be worthwhile.
5. Laggards: Laggards are oriented towards the past and use it as a reference for their decisions. They interact with peers who are similarly traditional as themselves, isolating them from the rest of their social system.
The laggards’ cautious adoption behaviour is often based on their limited resources. Before they adopt an innovation, they need to be sure that it will not fail.
Attributes of Innovations
Rogers identifies five attributes of innovations that have a strong influence on whether and how fast an innovation is adopted. He notes that these need not be actual attributes of an innovation — it is only important how a potential adopter perceives the innovation.
1. Relative Advantage: The perceived relative advantage of an innovation is the degree to which it is perceived as improving on a previous innovation. This can manifest itself as higher profitability or efficiency.
2. Compatibility: The perceived compatibility of an innovation describes how consistent it is with regards to an individual’s values, experiences and needs. The degree of compatibility determines the change in behaviour required to adopt an innovation.
3. Complexity: The perceived complexity of an innovation describes how difficult it seems to comprehend and use the innovation. A high degree of complexity can be a strong barrier against adoption.
4. Trialability: The perceived trialability of an innovation is the degree to which it can be tried on a probationary basis. A trial of an innovation is an effective way to reduce its uncertainty.
5. Observability: The perceived observability of an innovation is the degree to which others can observe the results of an innovation.
The adoption rate is also influenced by the social system in which an innovation diffuses. Many individuals are influenced by peers when deciding whether to adopt an innovation or not. Peers from distant social networks introduce innovators to new ideas. This gatekeeping process gives the relatively locally oriented early adopters access to these innovations.
Acting as opinion leaders, they demonstrate the advantages of an innovation to the early majority. Through peer pressure and out of economic necessity, the late majority and laggards finally also adopt the innovation.
Opinion leaders have exposure to mass media and participate more in their social systems than their followers and have a higher socioeconomic status.
These characteristics give opinion leaders immense influence when it comes to diffusing innovations in a social system. Because their opinions are highly respected, their followers often find them more credible than external influences such as mass media or change agents.
Critical mass for an innovation is the point at which its diffusion becomes self-sustaining and does not need to be supported by change agents or similar forces anymore.
Since potential adopters are often aware of the fact that the innovation will be more useful if others adopt it, they monitor the adoption behaviour of others. Individuals will be more likely to adopt if they perceive that critical mass has been reached.
The Organisational Innovation Process
Rogers has developed some specific thoughts with regards to the adoption process within organisations.
The innovation process for organisations according to Rogers.
1. Agenda-Setting: The organisation identifies and prioritises needs and problems that could be addressed by adopting an innovation.
2. Matching: The problem identified in the previous stage is matched with an innovation that could solve it.
3. Redefining / Restructuring: The organisation customises the innovation according to its own structure, culture, and needs.
4. Clarifying: Use of the innovation is starting to diffuse in the organisation. The meaning of the innovation becomes clearer for the organisation’s members, and they start forming a common understanding of it.
5. Routinising: The innovation loses its distinct quality: it is now part of the organisation.
During the process of diffusion, an innovation is communicated through communication channels among the members of a social system. The innovation-decision process describes the stages an individual can go through while contemplating the adoption of an innovation: after having gained knowledge about it, the individual forms an opinion about the innovation and decides whether or not to adopt it. The individual then starts using the innovation and further reduces the remaining uncertainty by practice and learning. When the innovation has been adopted, the individual continues to monitor whether adoption still makes sense for them.
Adopters as well as attributes of innovations can be divided into categories established by diffusion research. Their characteristics can provide an estimate of the probability of adoption in a given situation. Social networks have a large influence on the adoption process.
Large parts of the construction and property sectors have moved into the late majority specifically when it comes to digitisation. However, innovation breeds innovation. The number of innovators and early adopters is increasing as well as the pressure to innovate.
One aspect which Rogers has not included is that of legislation where innovation is forced on individuals and businesses by government. This was certainly the case with the UK 2011 BIM Mandate.
The UK government is progressing further legislation within the Building Safety Bill which will force adoption of innovation across the sector.
The COVID-19 pandemic has also impacted on innovation as companies look at new ways to optimise their business processes.
In uncertain and changing times, innovation has never been more important to us as we all adjust to a new normal.
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