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Assessing the worth of a new product or technology projected as the next big thing can be tricky. Brenna Sniderman, Susan Hogan, and John Lucker say a more pragmatic approach can help business leaders separate reality from the hype.
I think that there can oftentimes, at least from a business perspective, be a sense of excitement of, “This is really going to revolutionize and change all that we do.” And I think the reality doesn't always match that excitement, and that contributes in some ways to the hype that we're seeing.
Once expectations are not met, people could be disenchanted and turned off by this product for good, if they’re not careful. Business leaders need to decide for each of these hyped [products] as they emerge: Do we want to be an early adopter, a fast follower, or a laggard?
At a certain point, if everything is the next big thing, then it's hard to get excited about any of them.
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TANYA OTT: Have you ever been fooled by the hype of a new product or technology? An inflatable workout gizmo or maybe a social media platform? Those are pretty low-stake things, but in business, a company could easily sink millions of dollars into the next big thing. How do you know it’s worth it?
I’m Tanya Ott and today on the Press Room I’m talking to some folks who know a whole lot about the topic. Brenna Sniderman …
BRENNA SNIDERMAN: I am a researcher with the Center for Integrated Research, where I focus on digital technologies like Industry 4.0 and digital supply networks and their impact on business strategy.
TANYA OTT: Susan Hogan …
SUSAN HOGAN: I focus on our Future of Work campaign and our behavioral economics and management campaign.
TANYA OTT: And John Lucker.
JOHN LUCKER: [I am] one Deloitte's leaders around the development of predictive analytics solutions to solve tough business problems for our clients.
TANYA OTT: Great. I'm really excited about this topic because it's a dilemma that all of us are facing no matter what industry we're in. You look at it and say is that big thing that everybody's talking about right now really a thing? What is it and how much attention should I pay to it? What did you hope to add to the conversation?
JOHN LUCKER: There have been numerous times where I've watched companies that I and my teams advise head down paths that are predicated on concepts or technologies that are very popular in mainstream business discussions, but are not necessarily proven. And I've helped some clients navigate their thinking away from the hype and move toward a more measured and pragmatic approach. But at the same time, I've always marveled at the success with which marketers and different types of innovation companies are able to elevate whatever it is that they are selling at the moment to meet that hype cycle that tends to emerge, in many cases, around new concepts, new technologies, new approaches.
TANYA OTT: There's a lot of pressure on businesses these days because things are moving quickly and there's a lot of energy around reinventing or being the first. It can be a competitive edge of course, but sometimes it's only from an optical standpoint. You know, the optics of that marketing campaign.
JOHN LUCKER: That's true. There is pressure and very often things that are hyped are timely with regards to a company wanting to pay attention to them. But it is also a perilous process of changing your business strategy or adapting your approach to use a particular new technology or new method that's being hyped. If it's either premature, not well-integrated into the strategy, not well-integrated into the business processes, change management hasn't been well thought out by the organization in terms of how to get people to use these new approaches; there's a lot of areas where a company could stumble. And very often they race a little bit faster and, as they say, get ahead of their skis a bit.
BRENNA SNIDERMAN: I think that there can oftentimes, at least from a business perspective, be a sense of excitement of, “This is really going to revolutionize and change all that we do.” And I think the reality doesn't always match that excitement, and that contributes in some ways to the hype that we're seeing.
SUSAN HOGAN: It's not that communication about a new idea or technology is necessarily bad, but it's easy for companies to overweight that aspect in their decision to move forward with a new product, and they need to think about other issues as well. Like, what is the relative advantage of this new thing? What is it doing better than what we already have? What are the risks? Is there an opportunity for us to trial it before we can commit fully? And how does it fit with what we're already doing?
BRENNA SNIDERMAN: And what this [article] was meant to do is really to help people in organizations take a little bit of a step back and try to think through, rationally, which things are actually going to live up to the hype and which things may not necessarily live up to the hype, but will still actually be quite useful for me, just not quite the way that I thought they would be.
TANYA OTT: Are there some case studies or some examples that you could share where the hype really kind of got away from itself. When companies were implementing things before they really were prepared?
JOHN LUCKER: I have got a few. The first is an older example. It's around the concept of CRM or customer relationship management. Over the past decade or more, numerous companies had gone down the pathway of implementing CRM systems, which by any measure is an excellent concept and a good idea. And there was a lot of hype around installing and implementing a CRM. The problem was that with certain types of businesses there was a cultural impediment that made success for the CRM problematic. In order to really populate a CRM system with all the relevant data related to your relationships with customers, it meant that those who owned those relationships with the customers, usually salespeople, had to basically relinquish control over the information about that relationship. And unless that's done in a way that doesn't cause those people to be insecure about the stability of their employment or the stability of their roles at the company, then people aren't going to be predisposed to basically bare their soul around all that they know about those customers. So that was a classic organizational change-management dilemma, not necessarily a technology that didn't have all the capabilities for success.
The other example that I would give as something that's very timely is around autonomous vehicles. If we were to go back through the literature over the past four or five years, when the hype around autonomous vehicles really began, what we would find is that the pundits were predicting the ubiquity of autonomous vehicles to happen so rapidly to the point that it became somewhat ridiculous. There were statements made that within the next three to five years a huge percentage, if not the majority, of vehicles on the road would be autonomous. Of course, that would require the majority of cars to be replaced. And it's hard to believe that the majority of car owners would actually buy a new car in that rapid timeframe. And since then, the expectations of the ubiquity of autonomous cars has been highly modulated and now we're in the several decades time line, which seems inherently more reasonable.
TANYA OTT: Those are great examples.
SUSAN HOGAN: Without naming any names, some smartphone providers do a good job over-communicating, over-hyping what their new products might bring, and [therefore] create a sense of urgency, with people thinking, "Oh, I better get on this list, there's a limited quantity," by maybe showing the long lines, the long wait lists for their new products, without really getting people to think about why is this new smartphone so much better than the one I already have. They play on these cognitive biases [that] we have, such as social proof—everybody else is doing it, maybe I should do it as well; loss aversion—I don't want to miss out on not getting the great product; and scarcity—I don't want them to run out of this new product which, by the way, I don't know what it does differently than what I already have, but I certainly want to get it before they run out of it. So, in the consumer realm as well as in the business-to-business realm, you know sometimes they play on the fear of missing out or everybody's doing it, and that gets people to jump on the bandwagon before fully thinking through whether this is the right decision.
BRENNA SNIDERMAN: The case that I'm thinking of, I'm not necessarily thinking of something that didn't bear fruit, but something that did live up to the hype—just [that it] is taking a little bit longer and is perhaps living up to the hype in a different way than expected. And here I'm thinking of 3D printing and additive manufacturing, where we talked about how all of this is going to revolutionize the way that companies manufacture. And it has and it is continuing to do so—it's just not doing so, I think [back] to John's point with autonomous vehicles, in three to five years. It takes quite some time for these things to bear fruit. [It’s also happening] in slightly different ways. We don't have 3D printers in our homes where we're mass producing things in our houses the way that everyone sort of breathlessly thought that we would. But when you think about it from the industrial side and the business-to-business side, additive manufacturing has been quite revolutionary with respect to helping with design innovation, increasing speed to market. So there was a hype there that it lived up to; it was just a different hype than the one that was popularized, if that makes any sense.
TANYA OTT: So all hype is not bad hype, but people are susceptible to hype for some of the reasons you have already outlined. I would imagine since you are all scientists and you deal in the realm of what's testable and replicable, when you hear evangelists for new ideas or technologies who sound really confident in their predictions about the future, that's probably going to be the first warning sign for you?
SUSAN HOGAN: And it's a very funny thing because behavioral science research has shown in bahavioral sicience that we like our pundits to be confident in what they say to us. We like them to exude confidence. But there are usually so many unknowns that the people who are usually the wiser and more on target are less [likely to be] promising that this product is going to change the world.
TANYA OTT: You sum this up in a graphic that you have. It's something called Gartner's hype cycle. What is it and how does it work?
SUSAN HOGAN: This is not ours, but it's been proven over and over again. It plays on this idea that expectations are often inflated by this over-communication and this pressure to communicate that this new innovation is going to solve big problems in world. The expectations can be overset for many reasons, some external, some internal, and some just in the disillusionment and optimism on the part of the entrepreneurs. The hype cycle shows how expectations are set way too high, and then what happens is a boomerang effect. Once expectations are not met, people could be disenchanted and turned off by this product for good, if they’re not careful.
What follows the high expectations, when those aren't met, is what's called the “trough of disillusionment,” where people are just very upset that this product has not met their needs. Over time there is [what] we call the “slope of enlightenment,” where they may see that this product actually does serve some purpose. And Brenna used the great example of 3D printing. It just wasn't exactly what was sold to them as what it was going to do, but they do see the value. That takes time. But going through this disillusionment seems to happen over and over again with new innovations and consumer acceptance of these innovations.
TANYA OTT: I have to say, “trough of disillusionment” might be my next band name. I think that’s a really good band.
BRENNA SNIDERMAN: I think that all the time. It'd be a really good name for a band!
SUSAN HOGAN: Look at how compatible is this with other trends going on in the environment. How compatible is this with other routines? John mentioned how compatible is the CRM with what our salespeople are doing and want to continue to do and what they want to own? Does this new innovation fit in with that?
BRENNA SNIDERMAN: I think another one is the notion of relative advantage. And this is a [phrase] that I use a lot when it comes to projects that we're working on and just in work in general: Is the juice worth the squeeze? So, are we really going to get as much out of this to make this move or this shift worth it for us? And the benefit that we're getting from this, does it help us to override the risk, the fear of change that our organization has? Is it going to be demonstrably better than what we've already got? To the point about running out to buy the next smartphone just because you get one extra megapixel on your phone—is it really worth that extra effort? T are also degrees where you might be willing to spend a certain amount of money to get the benefits, but at a certain point you're not … will the costs outweigh the benefits? And it's not necessarily something that you want to invest in.
JOHN LUCKER: Business leaders need to decide for each of these hyped products as they emerge: Do we want to be an early adopter, a fast follower, or a laggard? What's the benefit or cost of being each of those and then being more measured and thoughtful around the value or lack of value of those different points of entry. I think what's happening too is that the more false alarms that companies experience or that the business world begins to see happen, the more companies choose to be fast followers or, for that matter, laggards. I've been seeing fewer companies jumping on things right away to be early adopters because there's been so much collateral damage over the years.
TANYA OTT: John, if companies are going to be slower in their adoption of these things, what's the benefit of that and what's also the cost of that?
JOHN LUCKER: That's a good question. I would say that one artifact of that is that investors or those expecting to get returns on their investment from companies that are actually creating these innovations, they’re going to have to learn how to be a little bit more patient around getting a return on their investments. One of the things that I've seen is that a lot of startup companies have very heavy expectations from their private-equity or venture-capital investors, and very often their approach and the hype that they create sometimes is not necessarily a result of their belief that they are ready to be in market and they're ready to hype at the level they are doing it. It's more because they're trying to react to the money person behind the scenes, saying hurry up … I want my money … I want my yield.
That's one aspect of this. Then on the consumer side of it, whether it's consumers or the buyers from businesses who are leveraging or buying these types of hyped approaches or techniques or technologies, they need to be much more forceful as they've learned from their experiences about what's worked and not worked, and be more forceful and articulate with those that are approaching them with the new great thing and tell them what is their tolerance for investing in something that doesn't yield what has been promised. So, I think that holding the solution providers or the technology providers more accountable both financially and legally will also help to create more balance in the hype system.
TANYA OTT: So, the takeaway here in terms of what businesses can do is take your time, know yourself really well, what is your tolerance for risk, really clearly define success, and manage the expectations internally within your business, as well with your consumers or with your customers.
JOHN LUCKER: Yes, summed up very nicely.
SUSAN HOGAN: Certain management regimes feel pressure to put their signature on something, on bringing new for the sake of new, so it's easy to reach out to that hyped element. We're not saying don't ever make that kind of decision. But don't be bamboozled by the hype, and make sure you make a thoughtful decision. Look at who's adopted that. I think that goes to this point of why some larger companies are deciding to be not the first adopter, but to see who would adopt that because there's so much interconnectivity between companies and their decisions. What they're doing is look at what other subcultures have adopted. Are these people playing in the same space?
JOHN LUCKER: Some hype isn't actually representative of anything that's particularly new, and we've been seeing this quite a bit over the number of years. Rather, what we're seeing is providers and technology companies have been repackaging former approaches or former technology; they've been rebranding it, retooling it, creating new vocabulary words to describe what actually isn't new but has been around for a while, and essentially describing something that's been solid and stable, with new terminology, and then referring to it in a consistent way, [which] has often led people to believe that there is actually something new when there really isn't. What that means in terms of marketing approaches is obvious, but what concerns me about it is that it doesn't make it front and center in a discussion as to why it is that retooling is necessary and why the hyped technology or object or concept didn't take off the first time.
TANYA OTT: Examples you can share?
JOHN LUCKER: Yeah … I would say, how many times in the past two years have we all heard the terms machine learning and cognitive science? And then when you dissect what those words mean, what they really mean is advanced analytics, advanced computing, artificial intelligence. Some of those things have been around for 20, 25, 30 years. Then when you probe deeper about what's really new, you often hear computers are bigger, faster, cheaper, and that becomes the reason why some of these new algorithms are so powerful. I think there's some truth to that, but that doesn't necessarily create a whole new capability. What I'm seeing now is a new vocabulary.
BRENNA SNIDERMAN: John makes a really great point, because I’ve found whenever I speak publicly about Industry 4.0, there's always someone who asks the question—well why now? And why is this revolutionary? How many times have we all sat in meetings before where we talk about [how] this technology is going to revolutionize your business. And what makes this one particularly different? And I think what that portrays is there is some element almost of fatigue with some people, where at a certain point if everything is the next big thing, then it's hard to get excited about any of them.
TANYA OTT: John Lucker, Brenna Sniderman, and Susan Hogan’s article is “Fooled by the hype: Is it the next big thing or merely a shiny object?” You can read it at deloitte.com/insights.
I’m Tanya Ott for the Press Room. Thanks for listening!
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