Managing Inovation Report - Delivero. Business & Marketing

Managing Innovation Report: Deliveroo
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Managing Innovation Report: Deliveroo
Introduction
Every day, individuals and organisations are coming up with new ways of doing business through innovation. Innovation occurs when a new system, product, service, process, or programme is introduced to add value and increase competitiveness (Goodman & Dingli 2017, p.110). Innovation can occur in different ways, some of which are driven by technology while others are not. Innovations and technologies are being discovered constantly. However, the main challenge involves convincing people to adopt such innovations, especially when there is great resistance to change. Several theories and models have been developed to explain user acceptance and adoption of innovations over the years. Such models and theories include the Technology Acceptance Model (TAM) and the Diffusion of Innovation (DOI) Theory. TAM examines the acceptance and adoption of new technological innovations in terms of its perceived ease of use and perceived usefulness. The DOI theory explores how personal innovativeness influences the willingness to adopt an innovation or technology (Johnson et al. 2017, p.10). These two theories will be discussed in more details in the next section.
Technology Acceptance Model and Diffusion of Innovation Theory
TAM: Definition, Concepts, and Processes
TAM is a model that was developed by Davis in 1989 initially to predict the acceptability of an information system (Salunkhe et al. 2018, p.75). However, over the years, its application has extended to other forms of innovation and is now used in the management of innovation to assess the acceptance of innovations and technologies. The model posits that the acceptability of a technology or innovation is determined by two elements namely; perceived ease of use and perceived usefulness. Perceived ease of use refers to the extent to which an adopter or user believes that their use of the innovation will be simple (Salunkhe et al. 2018, p.75). On one hand, users who believe that they will be able to use the innovation with zero or minimum complications are more likely to accept and adopt the innovation than those who think it will be complicated to use the innovation. Perceived usefulness is the extent to which the user/adopter believes the innovation will enhance their performance (Salunkhe et al. 2018, p.75). Users who believe that the innovation will enhance their performance and make their work/processes easier are more likely to adopt the innovation while those who believe otherwise will be rigid. Perceived ease of use and perceived usefulness are elements that are influenced by external variables. These external variables include individual and social factors, prior experience while using innovations, task characteristics, and situational involvement, among others (Olushola & Abiola, 2017, p.72). Consequently, perceived usefulness and perceived ease of use then influence the attitude of a potential user towards using the innovation. The attitude to use then influences the behavioural intentions of the potential user, which then influences the actual adoption and use of the innovation. Perceived usefulness also influences behavioural intention to use the innovation, as illustrated in the diagram below.
Diagram 1: Technology Acceptance Model
Source: (Salunkhe et al. 2018, p.75)
From the diagram, one can deduce that perceived usefulness is a stronger element in determining the adoption of innovation because it influences both the attitude and the behavioural intentions to adopt the innovation. TAM has several strengths and limitations which will be discussed in detail below.
Strengths and Limitations of TAM
One of the major strengths of TAM is its simplicity and powerfulness. TAM model is simple to understand since one can decipher what it entails from a simple diagram as the one above. Also, it is a robust tool for predicting acceptance of innovation (Olushola & Abiola 2017, p.73). Two, TAM is a reliable tool for determining the acceptability of innovations because it provides researchers with quality data (Olushola & Abiola 2017, p.73), and has also been widely used for this same reason. Three, TAM eliminates the ambiguity presented by subjective norms as factors that influence behavioural intentions and instead, uses individual elements (perceived usefulness and perceived ease of use) as determinants of acceptability. As Olushola and Abiola (2017, p.73) indicate, the use of subjective norms, such as peer groups or workmates, to determine behavioural intentions has been challenged in the past and has resulted in mixed study results. TAM solves such a problem by replacing subjective norms. Fourth, TAM provides a substantial explanation of why the behaviours and intentions to use vary across individuals and different innovations and technology (Olushola & Abiola 2017, p.73). This is because TAM uses personal factors (perceived usefulness and perceived ease of use) to determine acceptability and adoption. The extent to which an individual believes the innovation will be easy to use and will enhance performance varies across different innovations as well as different people.
One key limitation of TAM is that it is based on the assumption that people, and especially adopters of innovations, make their decisions rationally. However, it fails to account for the influence that interpersonal interactions may have on a user’s behavioural intentions as well as attitudes towards the innovation. For instance, it fails to account for the effect that early adopters, who are the opinion leaders, may have on other potential adopters. Yet, it is known that early adopters can influence the attitude and intentions of individuals who hold them in high regard and easily accepts their opinions. Two, TAM fails to consider some constraints and task environments, such as relevance and quality, which can affect the user’s intentions to accept an innovation (Olushola & Abiola 2017, p.73).
DOI Theory: Definition, Concepts, and Processes
DOI theory was developed by Rogers to explain how a new idea or innovation spreads and is adopted by people by examining the different types of users/adopters (Johnson et al. 2017, p.9). The theory also posits that personal innovativeness influences the willingness to adopt an innovation or new technology. To determine personal innovativeness, five types of adopters were established, which are crucial to the DOI theory. The first type is referred to as the innovators and encompasses people who always want to be the first to try an innovation (Johnson et al. 2017, p.10); they are the risk-takers. They account for about 2.5% of the adopters and require zero to very little effort in convincing them to adopt (LaMorte, 2019). They are drawn to new ideas. The second type, referred to as the early adopters, encompasses individuals who understand the need to change and enjoy leadership opportunities; they are the opinion leaders. They account for about 13.5% of the total adopters (LaMorte, 2019). They only require little information to adopt a new idea, such as instructional manuals. They also provide other adopters with advice and suggestions about new ideas. The third type is referred to as the early majority and includes individuals who are looking for solutions and thus adopt innovation to enjoy the practical benefits of the innovations; they rely on evidence to determine the effectiveness of the innovation. They represent 34% of the total adopters and take longer to adopt a new idea than innovators and early adopters since they require more time to deliberate (LaMorte, 2019). The fourth type is referred to as the late majority and encompasses individuals who only try an innovation after the majority have tried it; they are sceptical and have a low tolerance to risk. They also represent 34% of the population of adopters (LaMorte, 2019). They rely on information, including the number of people who have adopted the new idea and have benefited from it, to make their decision to adopt. The last type is known as the laggards and includes individuals who are conservative and are last to adopt innovations (Johnson et al. 2017, p.10); they are risk-averse. They represent the remaining 16% of the population (LaMorte, 2019). They rely on past experiences, especially those of others, to make their decision to adopt an innovation. They are suspicious of innovations, change agents, and innovators, which is why they are always the last to adopt a new idea.
Figure 1: Adopter Categorisation
Source: (LaMorte, 2019)
According to the DOI theory, the different types of adopters are influenced by five major factors when it comes to adopting an innovation. These factors are:
* Relative advantage, which refers to the extent to which an innovation is considered as more beneficial than the existing one (Min et al. 2018, p.3). Individuals will only adopt an innovation if it is better in terms of effectiveness and efficiency.
* Complexity, which refers to the extent to which an innovation is considered difficult to use and/or understand (Min et al. 2018, p.3). Individuals will adopt an innovation that they consider easy to use and understand.
* Compatibility, which refers to the innovation’s degree of consistency in terms of agreeing with the existing values and beliefs of the individual (Min et al. 2018, p.3). Innovations that are not in line with an adopter’s existing beliefs are less likely to be adopted.
* Trialability, which refers to the degree to which a user can test the innovation before deciding to adopt it.
* Observability, which refers to the extent to which the innovation and its results are visible and tangible and can be witnesses by society (Min et al. 2018, p.4). Individuals are more likely to adopt an innovation if they can see the results and/or the benefits of using it.
Also, the diffusion of innovation tends to take an S-shaped curve. This S-shaped curve indicates that as the number of adopters of an innovation increases, so does the usefulness of the innovation until it reaches a level that it can sustain itself, referred to as the saturation point (Mazzarol & Reboud, 2020). An innovation reaches saturation when the later adopters have adopted the technology. Innovation takes off when early adopters start adopting and as other adopters adopt the innovation, diffusion occurs. Diffusion occurs when opinion leaders, or early adopters, influence others to adopt through communication.
Netflix is one of the companies whose growth and diffusion of its streaming media services disrupted the television industry. When Netflix was launched, only a small group of people adopted it, which is why providers of rental movies did not see the threat that Netflix posed. As early adopters influenced other adapters to use Netflix services, the innovation diffused slowly and reached a point where the later adopters were using it, giving the company some large market shares in the industry..
Figure 2: S-Shaped Curve
Source: (Mazzarol & Reboud, 2020)
Strengths and Limitations of DOI Theory
DOI theory has several benefits. One, the theory provides answers to two questions; how and why individuals adopt innovations (Al-Suqri & Al-Aufi 2015, p.269). These answers are provided through the five categories of adopters and other components it covers. Two, it accounts for the spread of innovation over a given population by considering all types of adopters as well as the factors that influence their decision to adopt. Three, unlike the TAM model, DOI theory accounts for the interpersonal influences on the adoption of innovation. This is especially through the early adopters’ category.
The first limitation of DOI theory is that it fails to account for the availability of resources or support for individuals to adopt the innovation. The theory blames the individuals who fail to adopt an innovation (Al-Suqri & Al-Aufi 2015, p.269) rather than considering the extraneous factors, beyond the individual, that could affect their willingness or even ability to adopt the innovation. Two, it assumes that all innovations are positive and as such, they should all be adopted. Yet, not all innovations are positive and the theory does not examine how users can prevent or avoid adopting negative innovations. Al-Suqri and Al-Aufi (2015, p.268) calls this the pro-innovation bias whereby the theory does not provide room for rejection of innovation, even if the innovation is bad.
Application of TAM and DOI Theory in the Historical Development Context
Company: Deliveroo
Deliveroo is an online food delivery company with its headquarters in London and was founded in 2013. It offers “fast and reliable delivery” of food and customers can track the progress on their phones (Deliveroo, n.d.). As a result, the company has enjoyed over 650% year on year revenue growth since its inception. Some of the key values that have supported Deliveroo’s goal of delivering food to customers in the shortest time possible are; customer-obsessed, delivering results, thinking big, and most importantly, embracing change, among others (Deliveroo, n.d.). As a result, Deliveroo is constantly creating and adopting innovations to ensure that customers get the kind of food they want at any time and any venue.
To facilitate effective...