The Disruptive Innovator

Discussions concerning Innovation Strategy, how to design and market innovative new high technology products and services, the difference between technologies and products, Disruptive Innovations,the Technology Adoption LifeCycle, the SWIFT New Product Innovation method, Silicon Valley startups and more.

Thursday, August 24, 2006

Who are Stakeholders, and Do They Know What They Want?

Do Stakeholders know what they want?

In his reply to my post on What is Innovation?, reader sparky commented that:

By stating that "People don't adopt an innovation because they are forced to do so. They adopt an innovation because they are motivated to do so." and during your whole post you assume that the user knows what he wants and that the stakeholders are interested in different goal than value optimisation.

In today’s topic I’m going to elaborate on the different kinds of stakeholders, which includes both users and buyers, and their distinctive tasks.

But first, in a quick aside, let me clarify that I do not think that Stakeholders know what they want. To the contrary, I believe that they often do not know what they want. However, I do claim that stakeholders, when they are aware of and confronted with two alternative ways of accomplishing their goals:

1. the way they have done it in the past, and

2. the way they might do it if they employed the innovation,

are able to assess whether alternative 1) or alternative 2) appeals to them more.

This is not the same as knowing what they want. In many cases, stakeholders are unaware that any alternative under than 1) is even possible. In that case, they aren’t even going to go looking for an alternative. They feel the chronic pain, but they ignore and are resigned to the pain because they don’t know that pain killers exist.

For these stakeholders to change the alternative has to find them. This is a question of generating problem awareness, and will be a topic of a future post.

Similarly, they may be aware of their pain, and they may even be aware that solutions are possible, but they don’t know where they are, what they are called, how they work, nor who sells them. This is a question of providing solution awareness, and that too will be covered in a future post.

Finally it should be mentioned at this point that when we providing information about solution to people who don’t aren’t yet aware of the nature of their problem, they don’t know what to do with that information and so they ignore it.

To better understand how we might address this topic, we need to have a more rigorous understanding of who exactly are the stakeholders, and what roles do they play in the purchase and adoption of an innovation?

Who Are Stakeholders?

When I use the term Stakeholder, I mean a person (never a company or organization!) who plays one of the following roles in a purchase situation:

User (also known as the “end user”) a person who performs the task of using or employing the innovative product or service in order to achieve their goals.

Buyer (aka the “economic buyer” or “the customer”) a person who performs the task of selecting and purchasing the product or service, in order to meet their goals.

Evaluator (aka the “technical buyer”) a person who evaluates the alternative solutions during the purchase process. Evaluations typically are done in terms of goal attainment.

Allies (aka “advocates”,“stumbling blocks” or “blockers”) persons other than users, buyers and evaluators who stand to benefit or lose based upon the purchase decision. In general, a person is an ally if they stand to benefit from the acquisition of the innovation and a stumbling block if they do not. Typical allies are people who are served by users (e.g. if the user is a customer support professional the customers who call in would be allies). Typically, sales representatives whose products and services are under consideration in the purchase process also fall into this category.

Sponsors Sponsors will never receive any direct benefit from the adoption of the innovation, but they are interested in the personal welfare or success of one or more of the other stakeholders. In pursuit of their own goals of supporting their chosen stakeholder, sponsors can smooth or impede the purchase or adoption processes of the other stakeholders.

In a future post we’ll look in more detail at an example that demonstrates each of these roles.


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