The classic Everett Rogers graph of product diffusion, including ideas such as innovators and early adopters, is well known even the world over, and the terms used can be found in every magazine article about new market trends. But is it right?

Rogers stated that adopters of any new innovation or idea could be categorized as innovators (2.5%), early adopters (13.5%), early majority (34%), late majority (34%) and laggards (16%), based on a bell curve. These ideas about diffusion of innovation are among the standard vocabulary of product managers and marketers. But in a Marketing Bulletin, 1995 article I was shown recently, Malcolm Wright and Don Charlett raise some big questions about the Rogers Model, stating that the Bass Model, also from the 1960s, is more accurate.

Examples they quote to show how the Bass model has given good predictions include consumer durables like televisions and clothes driers, but also more complex projects such as diffusion of cocoa-spraying chemicals among Nigerian farmers, spread of an educational innovation in the US, and purchase of photovoltaic home energy systems in South-West US.

So, what is wrong with Rogers’ model?

I had assumed like many that complex products need a little market testing by innovators and early adopters before the mass market will adopt them. However, some of the examples quoted above in support of the Bass Model instead are pretty complex. Wright and Charlett question two key assumptions:

1. That some individuals are “venturesome”, as a personality trait that is consistent and correlates with length of time in education; however, the evidence for this trait is weak.
2. That the early phase of marketing is dominated by media advertising, and word of mouth becomes important as the market begins to mature.

The Bass Model stresses the influence of interpersonal communication, including nonverbal observation, right from the start.

So why has the Rogers Model been so popular?

My guess is that it probably worked quite well when applied to buggy software that needed a period of beta testing or of being in stealth mode, but then the idea became over-generalized.

If Bass works best, what does that mean for marketers?

Before answering that question, I would pose another one. Why might it be even more important now? The key lies in network effects. Social media creates powerful network effects, so if the power of interpersonal communication was important before, it is now even more so. If the Bass Model is really more accurate, focusing on mass advertising as products are launched, or concentrating mostly on early adopters could waste valuable time and make the difference between product success or failure. The key is to realise that network effects are the best friend a marketer can have, and should be aimed for as early as possible.

Just saw this list today which claims to show the top 50 most innovative companies in the world. Of course Asia, and China in particular, is gaining traction and also it’s normal that the US has by far the most companies represented. I consider such lists to be not very helpful at all. They serve primarily as a clever way to do PR for the consulting firms doing them and other than that show the totally obvious. By slightly changing the criteria used in such lists, a totally different list would show up. E.g. why not take worldwide market leaders. There is an excellent book called The Hidden Champions that talks about unknown small to medium sized companies (some also pretty large in fact) being world market leaders in their field and highly innovative. Most of this list’s companies are from Germany since the consulting firm is based there.

What this Top 50 list though is simply doing is taking the biggest companies by revenues and/or market cap and then seem to look who is mentioned the most in the public (Apple, Google, Microsoft etc.) and  - voila - here’s the list.

As I said above mostly PR and not worth to pay too much attention to. The media should IMHO not even look at such lists unless they do a bit more research on how these lists were created as they otherwise are misused as PR vehicles by consulting firms.

To sum it up: if you are not mentioned on this list but really would like to be, then you have to increase your PR and marketing budget and most likely don’t have to do anything more in product/service innovation at all. Or you hire that consulting firm. But that was not my idea.

The number of ways that implementing an in-company community platform can make staff more productive is growing all the time. These are my top ten.

1. Get started fast. Collaboration software is intuitive. Learn a few basic rules about where to do what, and then be guided by what you would do in the real world. So users can get started fast.
2. Focus on the task. As less mental real estate is given to the application, more can be given to the task.
3. Ease of sharing. Users don’t have to wonder which form of communication suits the task best, or try to fit in with others’ working styles, as everyone is using the same toolset.
4. Valuing content over delivery. Ease-of-use means IT-savviness does not distort the perceived value of the  input, so people see ideas for what they are - and are more confident about submitting them.
5. Credit where it’s due. A more transparent platform means less chance of credit-stealing (claiming authorship for others’ work). When work processes and output are directed at the community, it is clear who has done what - which is better for the morale of those that actually do most of the work!
6. The power of the group. The impact of the single creative individual is important, but can be overstated. We are all creative, but mostly more so when we work closely with others.  Innovation works better when we have people to fire ideas off and be inspired by.
7. Chance encounters. The more users get a chance to decide what they need to follow, the more chance that good ideas are seen by the people most interested in them, not just by a pre-determined distribution list. That increases the chance that good ideas have productive consequences.
8. Retaining talent. One of the main reasons that talented people switch jobs is that they feel they don’t make a real difference where they are. It’s not just financial rewards that inspire creative people, but having their work generate tangible results.
9. Retaining knowledge. When key people are out of the office, or even have left the company, does the knowledge go with them? And who has access to that knowledge? The more resources are in a shared space, the more their expertise is kept live and can be absorbed and developed by others.
10. Fewer meetings. The saying “you can meet or work, but you can’t do both” has some truth in it! The group aspect of community communication reduces the need to meet - and of course also cuts across geographical and time-zone barriers.

Alex Williams at ReadWriteCloud just wrote an interesting post about social media and business, based on a new IDC survey stating that “57% of U.S. workers use social media for business purposes at least once per week”. According to the survey “While marketers are the earliest and largest adopters of social media, these tools are now gaining deeper penetration into the enterprise with use by executive managers and IT.”

What Williams adds is that it is not just social computing: “if social computing represents the new business process then cloud computing is the delivery mechanism.” That’s a nice point - the two have developed in step. The cloud is group-friendly. It is much easier to maintain participation in a group when backing up or transferring data across hardware is not an issue, and sharing is helped hugely by platform independence. A newer phenomenon, being able to use whichever device is at hand including smartphones and netbooks, makes communication much more fluid, too.

However, another factor may be even more important in the development of social apps: the cloud makes it easier for users to switch, combine, and experiment. A few favourites apps of mine are Stixy, a kind of online cork board, Doodle, great for planning meetings and get-togethers, and Slideshare, for uploading and sharing presentations. But there are hundreds (or more) of useful cloud-based apps that can be used alongside the major application suites and even mashed together.

The result is a high rate of evolution of social apps, with winners offering the most useful features and the most intuitive interface. Application suites then have an incentive to get into the cloud, so they are in the same ecosystem and co-evolve.  These phenomena mean that the overriding limitation for users is not the platform, and not even what applications are available, but simply how clear they are about their group’s aims, processes, and how well they can select the features that fit them.

How innovation is handled is of course quite different depending on which country you live in. To try out new things in China or India is so much more the norm than in industrialized countries like Germany, France, UK or - where we are based - Switzerland where long time existent processes demand to be followed and the need to do something new is not seen daily. There is probably only one place in the West where that might be different and that is Silicon Valley in California.

The success of any company largely depends on how much better they can bring new or improved things to the market. This is not a sole function of product management and R&D in product and service innovation though but actually of everybody in a company since there are so many touch points with employees, clients, partners, products, services etc. that can be improved and lead to competitive advantages.

In fact I am convinced that the future in about just any industry in light of the strong competition from Asia and here of course in particular China is how well one can motivate and leverage each employees know-how and skill towards a joint goal: innovating better and faster. Innovation has to be seen in a broader sense here encompassing all company functions but of course products and service innovation are key since they pay the bills.

But as it turns out in day-to-day business these improvements, ideas or innovations are difficult to collect and often even difficult to create in many in particular big companies. So how could one revive or jump start an internal process that leads to a culture where people love to come up with new ideas? Before being able to answer such a question I collected some of the reasons why it is difficult for so many companies to innovate, here are some:

• there is simply no time set aside for employees to collect ideas or even communicate them
• there are no or only hardly achievable incentives defined in case someone has a nice idea
• how decisions and new products/services are created is a non-transparent process and only clear to a few
• hierarchical barriers make it difficult for lower ranked employees or departments with less visibility to communicate ideas up, one might simply not listen to them
• innovation is in the hands of a few so called experts and not a grassroots motivated approach
• being wrong with an idea does not mean that was bad, in contrary it needs to be made clear that it is much better to be wrong many times trying than not proposing anything at all, unfortunately too many companies are still not encouraging to try out something new
• there are no software tools available on companies and made part of every employee’s work tool that foster an innovation culture

This is a very small list. A bigger (50) and more comprehensive, also with a positive angle, list you can find here: 50 WAYS TO FOSTER A SUSTAINABLE CULTURE OF INNOVATION.

Did you know that (depending which survey you read) between 25 and 54 per cent of the US companies block social networking sites such as Facebook at work. Eight per cent also fire employees for posting criticism of the company outside of work. That is one way to handle such problems, but in fact that is both wasting talent and squandering an important opportunity. The cause is misunderstanding that different generations work differently.

Companies are right to have concerns about how employees use work time and about activities that affect their brand. However, most of the time, the employee’s intention is not destructive - if it is, then there certainly is a need to act. But in the typical case the issue is not a breakdown in trust, poor work attitude or even inefficiency, but just different perceptions and habits. Young, highly social employees need to be thought of and treated differently.  There’s been quite a lot of research on this over the last year or two, particularly comparing “baby boomers” (now aged in their 40s to 60s) and generation Y,  aka “millennials” or the “net generation”. A company with a good mix of ages can gain from the strengths of both generations - but only with knowledge and careful management. Here are the key findings of the research:

What makes the generations different

• Generation Y like to share personal information and thoughts on social networking sites and make little distinction between company and personal stuff. Baby boomers  are more cautious.
• Generation Y often judge people’s abilities by their technical competence. For baby boomers, technical competence is more of an add-on.
• Baby boomers tend to perceive knowledge as a useful card to hold onto until needed - a private source of power. Millennials gain kudos by sharing it.
• For baby boomers, who had been brought up with a linear, teacher fronted learning style, knowledge is assessed by coherence and depth. Generation Y prefer to learn by selecting from a mass of information, and judged it more by relevance than coherence.
• Generation Y’ers are attracted to jobs by how interesting they are. Can they be creative, use their own technology, express themselves? Job-hopping is seen as normal. Baby boomers, on the other hand, are more likely to look at the overall employment package, and pay more attention to the promotion ladder.
• Generation Y are particularly intolerant of being told  “This is the way we do it. We’ve always done it this way” and like to experiment: new is good. For baby boomers, experimentation is what you do when the normal methods have been tried and found wanting.

Now a certain amount of this is simply differences that have characterised the generations for centuries. But there are deeper differences. Millennials have not learned about the world from books, but from the Internet. What they have been learning is changing year by year, requiring a different and more flexible attitude to knowledge.

Working together

The main thing is to value the different generations within the company so each learns from each other. How would that work in practice?

1. Safety vs. self-expression - employees need an outlet to share experiences and be creative but be aware of consequences for the company of careless online behaviour (they of course also need to understand and adhere to well deisgned policies).
2. Internet time is not downtime - many creative and younger employees use all kinds of resources for information. Imposing rigid rules about how to use the Internet at work will feel too restrictive and insulting, will stifle creativity and create resentment. If an employee wants to do a good job, they need the tools that suit them.
3. Balance different knowledge bases - wikis need to work alongside accumulated specialist knowledge in formal documents, and companies should not forget the institutional knowledge that senior employees have - which can be sorely missed when they leave.
4. Be transparent - being explicit about differences in work attitudes and openly seeking practices that make good use of all talent will motivate employees and increase their productivity and creativity.