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Using Game Theory to Optimize the Pace of New Technology Adoption
  • How do you encourage speedier adoption of your product or service?
  • How do you increase the value your product or service creates for your customers?
  • How do you extract more of the value created by your product or service for yourself?

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Compatibility

Cognitive Dissonance

Implications for New Technology Adoption

 

A recent article in Science Daily, “Why 'Scientific Consensus' Fails to Persuade,” describes how peoples’ prior beliefs and values affect how they evaluate and interpret new information (emphasis mine).

"We know from previous research," said Dan Kahan, "that people with individualistic values, who have a strong attachment to commerce and industry, tend to be skeptical of claimed environmental risks, while people with egalitarian values, who resent economic inequality, tend to believe that commerce and industry harms the environment"…

[T]he study also found that the American public in general is culturally divided on what "scientific consensus" is on climate change, nuclear waste disposal, and concealed-handgun laws.

"The problem isn't that one side 'believes' science and another side 'distrusts' it," said Kahan referring to an alternate theory of why there is political conflict on matters that have been extensively researched by scientists.

He said the more likely reason for the disparity, as supported by the research results, "is that people tend to keep a biased score of what experts believe, counting a scientist as an 'expert' only when that scientist agrees with the position they find culturally congenial." …

"The problem won't be fixed by simply trying to increase trust in scientists or awareness of what scientists believe," added Braman. "To make sure people form unbiased perceptions of what scientists are discovering, it is necessary to use communication strategies that reduce the likelihood that citizens of diverse values will find scientific findings threatening to their cultural commitments."

This article contains insights that are extremely relevant for entrepreneurs seeking to promote the adoption of new technology systems.  In particular, the article incorporates two fundamental issues that affect how individuals will interpret new information, compatibility and cognitive dissonance.

 

Compatibility

Everett Rogers, acclaimed researcher on adoption and diffusion of new technologies, and coiner of the term early adopter, describes the compatibility of a new innovation in his Diffusion of Innovations, 5th Edition as follows.

Compatibility is the degree to which an innovation is perceived as consistent with the existing values, past experiences, and needs of potential adopters.  An idea that is more compatible is less uncertain to the potential adopter and fits more closely with the individual’s situation.  Such compatibility helps the individual give meaning to the new idea so that it is regarded as more familiar.  An innovation can be compatible or incompatible with (1) sociocultural values and beliefs, (2) previously introduced ideas, and/or (3) client needs for the innovation. [p.240]

Compatibility of an innovation with a preceding idea can either speed up or retard its rate of adoption.  Old ideas are the main mental tools that individuals utilize to assess new ideas and give them meaning.  Individuals cannot deal with an innovation except on the basis of the familiar.  Previous practice thus provides a standard against which an innovation can be interpreted, thus decreasing its uncertainty. [p.243]

A negative experience with one innovation can damn the adoption of future innovations.  Such innovation negatism can be an undesirable aspect of compatibility.  Innovation negatism is the degree to which an innovation’s failure conditions a potential adopter to reject future innovations. [p.245]

Another article in Science Daily, “Public Attitudes To New Technology: Lessons For Regulators,”  touches on Rogers’ notion of innovation negatism:

Public perceptions of risk depend on various demographic and cultural factors; for example, wealthy, well-educated white men tend to think of new technologies as less risky. Public opinion also is easily swayed by catastrophic events like the Chernobyl accident, which galvanized opposition to nuclear power, and by news like reports of deaths from Bovine spongiform encephalopathy (BSE) in Europe, or from severe acute respiratory syndrome (SARS) or swine flu (the H1N1 virus).

 

Cognitive Dissonance

Embedded in the Rogers’ notion of compatibility is the psychological notion of cognitive dissonance, which Wikipedia describes as follows.

Cognitive dissonance is an uncomfortable feeling caused by holding conflicting ideas simultaneously. The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance. They do this by changing their attitudes, beliefs, and actions.  Dissonance is also reduced by justifying, blaming, and denying. It is one of the most influential and extensively studied theories in social psychology…

Important research generated by the theory has been concerned with the consequences of exposure to information inconsistent with a prior belief, what happens after individuals act in ways that are inconsistent with their prior attitudes, what happens after individuals make decisions, and the effects of effort expenditure…

Dissonance is aroused when people are confronted with information that is inconsistent with their beliefs. If the dissonance is not reduced by changing one's belief, the dissonance can result in misperception or rejection or refutation of the information, seeking support from others who share the beliefs, and attempting to persuade others to restore consonance.

Cognitive dissonance will lead individuals to seek out information that conforms with their prior beliefs and discount or reject information that conflicts with their beliefs.

 

Implications for New Technology Adoption

Milind Kandlikar of the University of British Columbia in “Public Attitudes To New Technology: Lessons For Regulators” sums it up very succinctly:

It's not true that if a technology has benefits it will automatically get accepted by the public.

The implications here are that touting the benefits of a new technology system alone will not necessarily convince potential adopters to adopt, particularly if the new system is incompatible with potential adopters’ cultures, beliefs, or experiences.  Rather, change agents (in the words of Everett Rogers) must first learn what individuals’ prior beliefs and biases are toward new the technology systems at issue.  Then, to the extent that potential adopters have any compatibility issues or harbor any concerns or innovation negatism towards the new systems, entrepreneurs must specifically address those issues.  Failure to do so will deter adoption of new systems, regardless of potential benefits the entrepreneurs may promote.

Rogers [pp.249-52] provides a couple of ideas to help overcome incompatibility.

  • Change agents might introduce new technology systems in clusters, rather than in individual pieces.  Potential adopters may adopt “the package more rapidly than they would have adopted if each of the innovations had been diffused independently.”  By adopting the system jointly, new users might achieve a greater impact as a result of synergies within the system.
  • Name the innovation so as to improve its perceived compatibility with potential users’ beliefs and experiences.
  • Position the new technology system as being similar to another system that is compatible with potential users’ beliefs and experiences.

Unfortunately, such suggestions probably won’t help proponents of nuclear energy to sway those who oppose nuclear energy on the basis of the possibility of catastrophes like the one at Chernobyl.  So how do you convince someone who doesn’t believe in anthropogenic global warming (AGW) to buy a hybrid or electric car?  Or how do you convince a CEO or CFO who previously sunk $1 million in a new CRM or ERP or 6 Sigma system that didn’t end up saving the company any money to transition to your new cloud computing system?

In a different context, Rogers does note that

Most individuals do not evaluate an innovation solely or perhaps at all on the basis of its performance as judged by scientific research.  Rather, they decide whether or not to adopt on the basis of the subjective evaluations of the innovations conveyed to them by others like themselves (peers).  [p.247]

This is the notion that individuals look to peers and earlier adopters than themselves to validate new technologies.  I cover the importance of validation in my book.  Briefly, as it relates here, change agents might bypass the issues of compatibility and/or cognitive dissonance by convincing certain key individuals to adopt their new technology systems, and then using them to validate the technology for their more reluctant peers.

Alternatively, in an essay titled Cognitive Dissonance, Phil Barker addresses the issue of overcoming cognitive dissonance:

There are several key ways in which people attempt to overcome, or do away with, cognitive dissonance. One is by ignoring or eliminating the dissonant cognitions. By pretending that ice cream is not bad for me, I can have my cake and eat it too, so to speak. Ignoring the dissonant cognition allows us to do things we might otherwise view as wrong or inappropriate.

Another way to overcome cognitive dissonance is to alter the importance (or lack thereof) of certain cognitions. By either deciding that ice cream is extremely good (I can't do without it) or that losing weight isn't that important (I look good anyway), the problem of dissonance can be lessened. If one of the dissonant cognitions outweighs the other in importance, the mind has less difficulty dealing with the dissonance -- and the result means that I can eat my ice cream and not feel bad about it.

Yet another way that people react to cognitive dissonance is by adding or creating new cognitions. By creating or emphasizing new cognitions, I can overwhelm the fact that I know ice cream is bad for my weight loss. For instance, I can emphasize new cognitions such as "I exercise three times a week" or "I need calcium and dairy products" or "I had a small dinner," etc. These new cognitions allow for the lessening of dissonance, as I now have multiple cognitions that say ice cream is okay, and only one, which says I shouldn't eat it.

Finally, perhaps the most important way people deal with cognitive dissonance is to prevent it in the first place. If someone is presented with information that is dissonant from what they already know, the easiest way to deal with this new information is to ignore it, refuse to accept it, or simply avoid that type of information in general. Thus, a new study that says ice cream is more fattening than originally thought would be easily dealt with by ignoring it. Further, future problems can be prevented by simply avoiding that type of information -- simply refusing to read studies on ice cream, health magazines, etc.

Of these methods, the most apropos are the middle two, altering the importance of cognitions or creating new cognitions.

For example, you might convince someone who doesn’t believe in AGW to buy a hybrid or electric car by pointing out that gas prices are likely to rise significantly in the future, so high mileage cars, such as hybrids and electric cars, will lead to much lower gas costs (in addition to fewer carbon emissions).  

Similarly, a CEO or CFO may be reluctant to switch to cloud computing for its primary IT functions because similar past consulting projects have failed.  In this case, the potential adopter might be convinced to transition to the cloud by pointing out that the company has already successfully adopted cloud computing or outsourcing for certain other company applications, such as Salesforce.com or customer service; by noting that the company doesn’t have any room to install the new IT capacity it desperately needs; by noting that cloud computing would solve a lot of IT issues the company has been putting off, such as enabling off-site backups of the company’s records; etc.

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