Tuesday, January 29, 2008

Draft results release Nov '07 - another brick in the wall



See draft results (Release III) on Value Management:

Problem:
Generally, why do some innovations succeed and others fail?
Why the delay between invention and market acceptance of an innovation?
Specifically, and in depth - how do consumers understand the value in new technology?
And generally, how do consumers behave to assess, and communities make technology assessment decisions?

Recent Technology Impact - Explaining takeup of broadband, digital television, 3G mobile.
Practical Impact - Impact on marketing of technology, impact on understanding process of innovation.
Policy Impact - Australian election debate about political intervention in stimulating takeup of broadband by consumers.

Release II

Value supposed as explanation for innovation success, and spread of new technology.
Value defined as personal, subjective ascertainment of costs, benefits and risks.
Impact: Need for value management; tools: value trajectory, value conversation

Release III

What is value?
How does value work?
What should marketers, innovators, policy makers do about consumer value?
What is value?



Figure 1 - Value in action - the simplest view: Value as a black box.

In Figure 1, value is a mediator between information and consumer action. Action includes inaction or waiting, and value assessments are stored in attitudes, that can lead to future action.





Figure 2 - Opening the black box of value. Value comprises several interacting concepts.

Value was found to be very multi-faceted. Over 80 value elements were found that compete against each other to assess value. These were compressed into 12 value dimensions. Four of these dimensions were agreed by 100% of interviewees. The remaining eight dimensions, were noted by between 1/3 and 2/3 of interviewees.

Value Dimensions are a continuum of opposites, with one end of the dimension increasing value, and the other end decreasing value. Value is sensitive to new information, and new information is assessed as to its impact on value dimensions, leading to a new value assessment. Some people prefer one end of the dimension, while others may prefer the other end. For instance, some prefer new things, others prefer what they know already, and don't like to change. Some people may take different positions for different things. Some prefer simple, others complicated. But value dimensions compete with each other - simplicity and function, price and reliability, beauty and community, privacy and knowledge.

Key Dimensions:
Function Price Time / convenience Service / reliability
Other Value Dimensions: (from most to least common)
Learning / new Emotion Need Simplicity / Complexity
Duty Power / Freedom Connection / Community Beauty / aesthetics

Further questions:
How does value work? ... to follow

What should you do about value? ... to follow

4 comments:

JRB said...

Richard,
3 quick observations + 1 other. Not saying their right but worth checking.
1) Maybe knowledge should be between information & value. Many people can access the same information but not extract the same value. Perhaps it is knowledge that extracts the value. Compare data to information to knowledge.
2) Check out Gartner's hype cycles. I suspect you may find them helpful. www.gartner.com
3) We are now in IG3 (information generation 3) so "value" may have changed.
4) Check out dreamspring.com. The company is moving toward "lifestyle management" through mobile phones.
Regards,
Jeff B.

JRB said...

Whoops; "they're" not "their" in my previous comment.

Richard Ferrers said...

Thanks Jeff

The data, information, knowledge dimension would be interesting to compare to Value. From what I remember of the theory, knowledge included contextual and information to come together, perhaps to form value.

Knowledge = information + value
therefore, value = knowledge - information, that is value turns information into knowledge.

maybe....
what do you think?
rf

Richard Ferrers said...

Hi Jeff,

Your comments get emailed through to me....

This work comes out of teaching IS Project Management - getting close to the user/customer to deliver what they want (subject to tacit/explicit restrictions). Trying to bring these ideas into the innovation mainstream.

IS realised earlier than others, since there was more for them to lose, that close consultation with users was necessary when there is high uncertainty about what an IS system should look like.

Would be interested in any comments, on behalf of your Boards, that getting closer to customers does not always give the right answer. Would make an interesting debate...Apple is an interesting example, who do no user / focus groups. They are more into product leadership, rather than customer responsiveness.

So then the question becomes in what circumstances should one lead customers, and in what circumstances should customers lead you.

Richard