Tuesday, May 11, 2010

When innovation is bad...?!?!


I have been invited to attend the Hanken School of Economics, Helsinki Finland to discuss the downsides of innovation.

A workshop called "Beyond the pro-innovation bias" is being run by Prof Karl-Erik Sveiby, in May 2010. Profs Jan Fagerburg, and Nancy Harding are making keynotes. The format is interesting because of the small group involved, the focus on brainstorming and problem solving, and the output of publishing the results as a book or special issue. UQ however prefers funding when a paper is presented at the gathering.

"The objective of the workshop is to bring together a group of 15-30 innovation researchers to explore alternatives to mainstream innovation research by addressing how unintended and undesirable consequences of innovation could be brought into the research agenda of the innovation research field. We want to go beyond the 'pro-innovation bias'." - Hanken website

My suggestion of a new term to indicate loss of value - 'denovation' (Jan 09) caught Prof Sveiby's interest and led to the invitation.

If innovation is something new, the result can be good or bad. If innovation is something new that adds value (as I argue in my thesis), then what is something new, which decreases value - I call this denovation. The trick is to work out if your action creates or destroys value or both. For instance, a price rise decreases value unless there is compensating change in product features.

Firms raise prices and think there is no effect on customers. I argue customers notice and remember, and include such information in ongoing value assessments. Price rises means customers lose value, and while customer response may not be immediate in action, an immediate response to the shift in value is a shift in attitude; increasing negative or decreasing positive sentiment towards the firm. Hence the need for ongoing measurement of customer attitudes towards firms as a measure of ongoing value provided.

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