Companies and nations rely on innovation to improve productivity and fuel economic growth, but they don't necessarily have to excel at originating research to be competitive – adopting and applying key innovations successfully is what really matters.
In times of recession and uncertainty, defending key innovation choices becomes critical, according to Gartner which examines the importance of technology adoption timing in the newly released book "Mastering the Hype Cycle: How to Choose the Right Innovation at the Right Time", published by Harvard Business Press.
Mark Raskino, vice-president and Gartner Fellow, and co-author Jackie Fenn, also a vice-president and Gartner Fellow, call the repeated pattern of over-inflated expectations, subsequent disillusionment, and eventual assimilation the "hype cycle".
"To make a good decision about when to adopt an innovation, you need to balance three variables: how potentially valuable the innovation is to you, how mature the innovation currently is, and how good your organisation is at tolerating and managing risk," says Raskino.
"The hype cycle is a particularly useful management decision tool when organisations are entering a downturn. Use the hype cycle to check the strategic wisdom of your decisions about what to drop and what to keep within your project portfolio. It¹s easy to make mistakes under time pressure that you will bitterly regret later in the economic cycle.
"The goal is to be selectively aggressive in adopting innovations that could cut costs which sounds simple but can be deceptively difficult to achieve when everyone around you becomes risk averse," he adds. "The constant barrage of positive and negative hype, the peaks and troughs of hype cycles for every innovation pressure organisations to respond unwisely by adopting too early, giving up too soon, adopting too late, or hanging on too long. These are the four traps of the hype cycle."
It would be really easy for companies to cancel some key IT enabled business change projects in 2009 simply because they are based on "unfashionable" technologies the market has recently turned against. Once you know how that "trough of disillusionment" process works, it becomes clear that ditching some of these might be the worst decision you could make.
While it's important to understand the traps that can snare unwary adopters, it¹s equally important to examine the opportunities that arise from the inevitability of the hype cycle.
"We see two types of opportunities arising from the hype cycle. The first set of opportunities comes from timing your adoption of each innovation with precision to optimise the amount of value you can derive. If you¹re going to invest your organisation¹s time and money in an innovation, you want to make sure not only that it¹s the right one but that you jump in at the time that gives you the longest lifetime value at an acceptable level of risk," says Raskino.
"The second type of opportunity lies in harnessing the energy of the hype cycle in the broader marketplace by taking advantage of the needs and actions of other players.
"If you can be smarter than the crowd even some of the time in avoiding the money pits of adopting too early or giving up too soon, and the lost opportunity costs of adopting too late or hanging on too long, you'll come out ahead."
IT organisations should establish a proactive process to formally monitor, evaluate, and select emerging technologies to bring into the organisation for the right purpose at the right time.
Gartner's STREET (scope, track, rank, evaluate, evangelise, and transfer) framework provides a structured approach and best practices at each stage of the emerging technology planning process. STREET follows a traditional process of focusing on innovation on the organisation's business objectives, generating ideas and selecting the best ideas for implementation.
* Scope: decide what your company values and determine your company's ability and desire to manage risk;
* Track: seek out relevant innovations from a broad range of sources and track their progress along the hype cycle to notice relevant advances in their maturity;
* Rank: identify innovations that look most likely to bring significant benefits to your organisation within a timeframe that fits your risk profile;
* Evaluate: use research, prototypes, and pilots to better understand the benefits, costs, and risks associated with adopting each innovation, make strategic decisions about which innovations to adopt, which to shelve and revisit, and which innovations not to adopt;
* Evangelise: rally support for the chosen innovation with key players who can help champion the innovation and ensure its operational success; and
* Transfer: spark the enthusiasm and sense of ownership required for the innovation to take hold