CIIM Nova-MIT research on laggards and value creation featured by WSJ
Cyprus is one of three countries and CIIM one of five institutions involved in a research project by CIIM’s Visiting Professor Luis Filipe Lages, of Nova School of Business and Economics in Portugal and Sara Jahanmir of Nova and MIT, featured last week in The Wall Street Journal (WSJ). The research explores the role and importance of laggards and late adopters of innovations for companies and society. This innovative research project was developed in cooperation with CIIM students over the past five years.
The featured work of SBE/CIIM’s Lages and MIT’s Jahanmir on innovation and value creation, published in Journal of Engineering and Technology Management (2015) and Journal of Business Research, with CIIM input, has received significant attention in all three editions of WSJ (US, Europe, Asia).
Late adopters are individuals who buy a product or service only after the majority. For many years, theory and practice has merely emphasised the role of early adopters in innovation and idea generation. Jahanmir and Lages argue that in order to create value and remain competitive, companies need to consider the role of all user categories in the idea generation and new product development (NPD) processes.
With the objective of better understanding late adopters and helping companies to obtain and analyse information from these consumers, authors studied late adopters and laggards for several years in three countries, France, Germany and Cyprus, and applied the Lag-User Method – a seven step NPD method - to different technologies, products, and services,
Studies resulted in over 60 breakthrough and incremental new ideas across a wide range of sectors such as technologies (laptops, smartphones), online services (social media, mobile apps), financial services (banks, credit cards, and insurances), hospitality industry, drink and food industry, consumer goods and NGOs.
The research revealed that late adopters care about products’ functionality rather than brand images, prefer simple products which offer clear value and are difficult to convince. However, once they are convinced, they will be loyal customers. By involving late adopters in idea generation and NPD processes, companies can get access to the valuable insight of these ignored consumers. Late adopters’ input can help companies increase value while cutting costs, and so remove barriers to adoption of innovations, cross the chasm and so accelerate the rate of innovation adoption.
CIIM’s international Professor Lages, believes that with this scientific advancement now we have empirical evidence that companies can innovate and create value by studying late adopters. This allows companies to explore new market spaces, identify the weaknesses of their products and those of competitors, and turn those weaknesses into strengths, create new generations of products and services aligned with future market needs and thus gain higher market shares. The authors acknowledge the support and participation of CIIM students, without whom this achievement wouldn’t have been possible.