Why do we welcome innovation to products more readily than to processes?

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Children love to play with new toys but hate disruption to their routines. These traits persist in adult life: innovation is readily adopted when it is incorporated in new gadgets but innovation that involves doing things differently is resisted.

Look around a university. At a super­ficial level, modern information technology has changed everything. Most activities — communication, scheduling and presentations — are conducted electronically. At a deeper level, nothing at all has changed. The course structures, materials and the methods of pedagogy remain essentially the same.

As Richard Nelson, the economist of innovation, has pointed out while American children are much healthier than they once were they are not much better at learning to read. Innovation that comes in a pill or injection is easily adopted: innovation that manages a process better is not.

It has always been so. Anaesthetics were developed in the mid-19th century and soon all surgeons were using them. However, when a Viennese physician discovered that the most important thing surgeons could do to keep their patients alive, especially those patients who were newborn infants, was to wash their hands, the profession resisted the innovation for half a century. While doctors would readily experiment with new chemicals, they fought any acknowledgment that their procedures were defective.

Authors and editors use computers and software to write and compile, and ereaders are everywhere. Yet any suggestion that these developments imply a different and diminished role for publishers and booksellers is fiercely resisted, both by these businesses and by authors and readers.
Airlines place orders for the latest models but established carriers find it hard to adapt to the market challenges set by low-cost carriers. Their response has been to set up distinct subsidiaries to implement the new business model. Yet Delta’s song was sung only briefly and British Airways’ Go went.

Since even babies are more suspicious of new ways of doing things than of new toys, we might seek evolutionary explanations. But why would our ancestors have been more ready to hunt new prey, or adopt new tools, than to adapt routines? Perhaps innovations incorporated in physical items are more plainly beneficial than process innovations. It is hard to argue that a smartphone is not an improvement on an instrument with a large rotary dial tethered to a desk.

Some gadgets that look like improvements are not: three-dimensional cameras meet a need we do not seem to have, and airships and supersonic passenger jets turned out to be a bust. These blind alleys in product innovation are sufficiently rare that they stand out in business and technological history.

A low-cost airline, however, is not superior to a full service one but rather the provider of a product better adapted to the needs of modern passengers. Establishing a new routine requires time and practice, and many new routines do not represent improvements; witness the fate of the majority of business re-engineering exercises.

While transformational chief executives and management consultants chafe at the resistance they encounter, the problem is not just the lethargy of subordinates and the scale of their personal investment in established processes. It is often well founded doubt as to whether the “change agents” actually know what they are doing. Political leaders, who seek office by claiming that everything their predecessors are doing is wrong, are even more frequently the advocates of useless process reorganisation

So we are right to view such novelties with suspicion. And the behaviour of our children suggests this well founded scepticism towards those who would re-engineer our routines has become hard wired in human responses.

 

This article was first published in the Financial Times on March 11th, 2015.

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