Towards a value theory of innovation (2008)

Richard Ferrers - PhD Colloquium Presentation - 06.06.08Richard Ferrers - PhD Colloquium Presentation - 06.06.08 11
Towards a value theory ofTowards a value theory of
innovation: a grounded theoryinnovation: a grounded theory
approach (to technologyapproach (to technology
adoption)adoption)
Richard FerrersRichard Ferrers
UQ Business SchoolUQ Business School
Lead Advisor: Dr. David RooneyLead Advisor: Dr. David Rooney
Associate Advisor: Dr. Jo PreviteAssociate Advisor: Dr. Jo Previte
FinalFinal

Richard Ferrers - PhD Colloquium Presentation - 06.06.082
OverviewOverview
PurposePurpose
Conceptual ContextConceptual Context
Research QuestionResearch Question
MethodMethod
ValidityValidity
– Maxwell (1996) An interactive approachMaxwell (1996) An interactive approach
to research designto research design

PurposePurpose
Investigate Innovation success /Investigate Innovation success /
failure, delay from invention tofailure, delay from invention to
market acceptancemarket acceptance
Masters thesis – barriers toMasters thesis – barriers to
innovationinnovation
– Five barriers: technical, cost, regulatory,Five barriers: technical, cost, regulatory,
personal, organisationalpersonal, organisational
– Focus here: cost, price / pricingFocus here: cost, price / pricing
strategiesstrategies

Recent Innovation Literature –Recent Innovation Literature –
emerging value focusemerging value focus
Kim and Mauborgne (1997, 1999, 2005a,Kim and Mauborgne (1997, 1999, 2005a,
2005b)2005b)
– Value innovationValue innovation
– Leap in value required for consumersLeap in value required for consumers
– Capture market to exclude imitatorsCapture market to exclude imitators
Prahalad and Ramaswamy 2004Prahalad and Ramaswamy 2004
– Co-construction of value between producersCo-construction of value between producers
and consumersand consumers
Value creation – special topic – AcademyValue creation – special topic – Academy
of Management Review Jan. 2007of Management Review Jan. 2007

Diffusion Literature – historicalDiffusion Literature – historical
reviewreview
Survey based – correlation studies (RyanSurvey based – correlation studies (Ryan
and Gross 1943, Rogers 1965-2003,and Gross 1943, Rogers 1965-2003,
Moore 1991)Moore 1991)
– Adopter categories (ideal types)Adopter categories (ideal types)
– Category descriptions (30 variables)Category descriptions (30 variables)
– Discontinuities (Moore’s chasm)Discontinuities (Moore’s chasm)
Mathematical modelling (Bass 1969)Mathematical modelling (Bass 1969)
– Over 90 follow up studies, oversimplifiesOver 90 follow up studies, oversimplifies
Social construction of technologySocial construction of technology
– Historical reviews (Lipartito 2003, NicklesHistorical reviews (Lipartito 2003, Nickles
2002, Hughes 1983, Bijker 1995)2002, Hughes 1983, Bijker 1995)

3G – a new consumer technology3G – a new consumer technology
Launched AustraliaLaunched Australia
20032003
Aug 2006 – 1.5MAug 2006 – 1.5M
users est.users est.
Major losses toMajor losses to
date eg Hutchisondate eg Hutchison
lost $760M 2006lost $760M 2006
Competition –Competition –
Apple iPhoneApple iPhone

Consumer value literatureConsumer value literature
Zeithaml (1988) – value difficult to study becauseZeithaml (1988) – value difficult to study because
shifts easilyshifts easily
Woodruff (1997) – “need for richer customerWoodruff (1997) – “need for richer customer
value theory… to help us understand howvalue theory… to help us understand how
customers form preferences”customers form preferences”
Payne and Holt (2001) – value literaturePayne and Holt (2001) – value literature
fragmented, no widely accepted conceptualfragmented, no widely accepted conceptual
frameworkframework
Flint, Woodruff and Gardial (2002) – “littleFlint, Woodruff and Gardial (2002) – “little
empirical research to guide managers who wantempirical research to guide managers who want
to better understand changes in what customers’to better understand changes in what customers’
value” (p.102)value” (p.102)
Priem (2007) –Priem (2007) – “scholarly attention to firm-consumer linkages will likely“scholarly attention to firm-consumer linkages will likely
enhance our understanding of factors leading to sustained high performance” (p.233)enhance our understanding of factors leading to sustained high performance” (p.233)

An evolving Research QuestionAn evolving Research Question
How do consumers understand theHow do consumers understand the
value in a new technology?value in a new technology?
Focus on consumers, focus on value,Focus on consumers, focus on value,
focus on SCOT, focus on innovationfocus on SCOT, focus on innovation
Left behind innovators, left behindLeft behind innovators, left behind
B2B, left behind discourse analysisB2B, left behind discourse analysis

MethodologyMethodology
Grounded theoryGrounded theory
– Build theory from dataBuild theory from data
Fit, understanding, control, general useFit, understanding, control, general use
– Rather than test theoryRather than test theory
– Basis: Glaser and Strauss (1967)Basis: Glaser and Strauss (1967)
– Epistemology: constructionistEpistemology: constructionist
– Why? Flexible, emergent, complexWhy? Flexible, emergent, complex
– Test against literature – top 10 refsTest against literature – top 10 refs

Preliminary results (Mar ’08)Preliminary results (Mar ’08)
Ethical clearance – Feb 2005Ethical clearance – Feb 2005
Interviews to date – 21 consumersInterviews to date – 21 consumers
Transcribed – 60,000 wordsTranscribed – 60,000 words
Open coded – 2,500 data pointsOpen coded – 2,500 data points
Categories emerging – 222Categories emerging – 222
Overarching explanatory categoryOverarching explanatory category
emerging - valueemerging - value

Emerging conceptsEmerging concepts
12 Value Dimensions12 Value Dimensions
80 – 100 Value Elements80 – 100 Value Elements
17 Value Assessment Strategies17 Value Assessment Strategies
8 Top Level Concepts8 Top Level Concepts
New questionsNew questions
– what is value?what is value?
– how does value work?how does value work?
– how and why does valuehow and why does value
stabilise/move?stabilise/move?

What is value?What is value?

How does value work?How does value work?

Tentative value propositionsTentative value propositions
Derived from the interview data, and someDerived from the interview data, and some
evidence in the literatureevidence in the literature
– Value is dynamicValue is dynamic
– Value varies from person to personValue varies from person to person
– Value changes with new informationValue changes with new information
– Value is affected by time to make anValue is affected by time to make an
assessmentassessment
– Value degrades over timeValue degrades over time
– Value assessment explains innovation adoptionValue assessment explains innovation adoption
– An innovation fails, when it fails to add value.An innovation fails, when it fails to add value.

Conclusion : ImplicationsConclusion : Implications
Value may need to be managed, alongsideValue may need to be managed, alongside
innovation and diffusioninnovation and diffusion
Tools would need to be developed toTools would need to be developed to
enable value management:enable value management:
– Value conversationValue conversation – ongoing dialogue needed– ongoing dialogue needed
between innovators and consumers to identifybetween innovators and consumers to identify
value and movement in valuevalue and movement in value
– Value trajectoryValue trajectory – consumer action triggered– consumer action triggered
by comparison of value assessment with priceby comparison of value assessment with price
– Simple / complex pricingSimple / complex pricing – affects consumers– affects consumers
ability to make a value assessmentability to make a value assessment

TimetableTimetable
March 07 – ConfirmationMarch 07 – Confirmation
April – July 07 Interviews and transcribingApril – July 07 Interviews and transcribing
August – Nov 07 Data analysisAugust – Nov 07 Data analysis
Dec – Mar 08 Comparison of developedDec – Mar 08 Comparison of developed
theory with innovation / diffusion theorytheory with innovation / diffusion theory
Apr – Oct 08 Write up, review, QualityApr – Oct 08 Write up, review, Quality
controlcontrol
31 Oct 2008 – Submission of thesis31 Oct 2008 – Submission of thesis

ReferencesReferences
Refer paper atRefer paper at www.valman.blogspot.comwww.valman.blogspot.com

What’s next?What’s next?
DRUID conf. Copenhagen BusinessDRUID conf. Copenhagen Business
School (17-20 June)School (17-20 June)
Open Innovation conf. MIT/HarvardOpen Innovation conf. MIT/Harvard
Business School (4-6 Aug.)Business School (4-6 Aug.)

Towards a value theory of innovation (2008)

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