Elsevier

Decision Support Systems

Volume 48, Issue 1, December 2009, Pages 303-312
Decision Support Systems

Steal my idea! Organizational adoption of user innovations from a user innovation community: A case study of Dell IdeaStorm

https://doi.org/10.1016/j.dss.2009.04.004Get rights and content

Abstract

Open innovation models suggest that an organization's end users can be a potentially beneficial source for new ideas and innovations. However, incorporating end users raises some interesting challenges regarding how to balance the decision making power between a firm and the user community. Using Diffusion of Innovation Theory, we propose hypotheses based on the perceived attributes of end user ideas and end user promotion efforts. Our findings suggest that the decision to adopt a user innovation was based on the ability of the firm to understand the technical requirements and respond to community concerns regarding the innovation.

Introduction

On February 16, 2007, Dell invited end users to share their ideas and collaborate with Dell to create or modify new products and services through an online community — Dell IdeaStorm (www.dellideastorm.com). With the launch of this website, Dell created a user innovation community where end users freely reveal innovative ideas with community members and Dell [25], [27]. Through IdeaStorm, end users contribute their business ideas to be reviewed, discussed, and voted upon by the user community. While user innovation communities are not a new phenomenon [9], [26], advances in information and communication technologies (ICTs) have enabled end users of an organization's products and services to organize and share innovations through the creation of online communities. These user innovation communities, defined as “distributed groups of individuals focused on solving a general problem and/or developing a new solution supported by computer mediated communication” [8, p. 1246], are becoming increasingly influential in an organization's decision-making process regarding the adoption of new innovations.2 We define adoption based on Rogers' definition which states adoption is the “decision to make full use of an innovation as the best course of action available.” [18, p. 473]

Researchers and practitioners alike are strongly encouraging organizations to take more open approaches,3 such as establishing user innovation communities, to complement internal innovation processes. Chesbrough [2] proposes that organizations in today's hyper-competitive environment must take an open innovation approach, combining internal and external components of an organization to successfully develop innovations and gain a competitive advantage. Laursen and Salter [13] argue that “the network of relationships between the firm and its external environment can play an important role in shaping performance” [13 p. 132]. As a result, organizations are beginning to view user innovation communities as strategic assets that provide external expertise, generate ideas on new innovations, and support innovation development [8]. Organizations that utilize user innovation communities can capture value by increasing an organization's capacity to continuously renew its competencies and better align itself with a changing business environment [22]. Von Hippel [25] argues that end users, acting in a proactive manner, are central to an organization's ability to leverage its own internal resources and innovation processes for acquiring user innovations.

Traditionally, organizational innovations are innovations that the developer expects to gain value by selling it. User innovations are innovations that the developer expects to gain value by using it. This makes opening the boundaries of the firm to include user innovation communities a risky proposition. First, the organization has little control over the content end users post. End users could easily post negative comments about the organization, creating a public forum for customer complaints that could generate very bad publicity for the firm. Second, in order to support development of the user innovation community and capitalize on the innovations from end users, the host organization must engage in community building activities and acknowledge the innovations that are being generated. This requires that the host organization invest significant resources to participate in and support community activities. Third, as user innovation communities become more tightly integrated into the processes of the host organization, the possibility arises for conflict between the user community and the organization itself. Consequently, how an organization chooses which innovations to adopt and which to disregard requires balancing the interests of the organization with the interests of its end users.

For instance, the founder and chief architect of Digg.com, Kevin Rose, defied a legal notice from an anti-piracy movie industry group by refusing to remove stories from the Digg.com website containing a single 32-digit code that unlocks the contents of HD-DVD and Blu-ray discs [5], [10]. Rose posted the following response to community members: “But now, after seeing hundreds of stories and reading thousands of comments, you've made it clear. You'd rather see Digg go down fighting than bow down to a bigger company. We hear you, and effective immediately we won't delete stories or comments containing the code and will deal with whatever the consequences might be. If we lose, then what the hell, at least we died trying. . . .” [19]. In this example, end users deluged the site with stories and comments that included the key after Digg administrators began deleting user-generated content in order to comply with the cease-and-desist letter. As a result, Digg.com faced strong external pressure from a key constituency, its end users, to change its decision. Organizations reliant on end user participation, such as Digg.com, must carefully balance organizational interests with end user pressures, or potentially be forced to choose between its end users and organizational survival. The interesting paradox arises in that the more successful the user innovation community, potentially the more power the community holds over the organization's decision-making process.

Research has yet to examine how user innovation communities, acting as a new form of organizational constituency, can both complement and/or disrupt an organization's innovation processes. Thus, the purpose of this study is to identify the factors that influence an organization's adoption decision when innovations come from outside the organization's formal boundaries. Using a mixed method case study approach utilizing data collected via survey, objective data from the website, and qualitative analysis of message postings, we examined Dell's decision-making process using components of Rogers' Diffusion of Innovations Theory [18]. Specifically, we examined whether the perceived attributes of the user innovations and the promotion efforts of end users influenced Dell's adoption decision. Our findings suggest Dell's adoption decisions were not influenced by the economic and compatibility attributes of the innovations nor the promotional efforts by end users; rather, Dell's adoption decisions were based on its absorptive capacity — the ability to understand the oftentimes complex user innovations to sufficiently address user concerns and meet user expectations. The main contribution of our study is that it expands our current theoretical and empirical understanding of the role of user innovation communities in support of organizational innovation processes, and how organizations leverage the creative innovations from end users to create new products and services.

Section snippets

Theoretical perspective and research model

Innovation is critical for today's organizations, and organizations that fail to innovate eventually die [1]. Proponents of an open model of organizational innovation recognize that because it is impossible for a single firm to hire all of the experts in a field, and an innovation does not have to originate within the firm in order for the firm to profit from it, organizations must make the best use of both internal and external sources of innovation [1], [28], [25]. The key assumption

Hypotheses

Organizations are more likely to adopt innovations that are perceived to provide the greatest relative advantage for the organization amongst alternative innovations [1], [2], [3]. Relative advantage is defined as the degree to which an innovation is considered superior to its alternatives [18]. Central to this definition is the need for an organization to quantify the economic advantages gained from adopting the innovation [20]. Under the traditional closed innovation model, organizations are

Research setting and measures

In order to test the proposed hypotheses, we gathered data from the Dell IdeaStorm website. IdeaStorm was officially launched on February 16, 2007, and as of June 2007 (the end of our study period), more than 6200 ideas had been posted. To participate, end users create usernames and post their innovative ideas about how Dell can improve existing products and services and/or create new products and services. End users can also post comments about an idea, promote or demote posted ideas (vote)

Results

Table 5 presents the correlations between variables. The variables assessing change agents' promotion efforts were all highly correlated with one another. Also noteworthy, the only variable that had a significant correlation with adoption/non-adoption is idea age (in days) — ideas that have not been adopted are older than adopted ideas. We tested hypotheses 1, 2, and 3 by comparing the mean values of the adopted ideas to the mean values of non-adopted ideas. Results of the ANOVA tests are

Explaining adoption

The results from the hypotheses tests indicate that organizations are likely to base adoption decisions on factors beyond relative advantage, compatibility and the promotion efforts by members of the community. This suggests that the inter-related factors of complexity, observability and trialability are just as important (if not more so) in the decision to adopt ideas from a user innovation community [18]. The interesting twist to Rogers' original model is that now it is the adopting

Discussion

Under traditional innovation assumptions, Dell should choose to adopt an innovation based on the perceived attributes (e.g., relative advantage and compatibility) that increase profitability and create additive value to the organization's business strategy. Alternatively, Dell should balance innovation attributes with the promotion efforts of end users, relinquishing some control over the adoption decision-making process to its end users. These assumptions have led us to the question of what

Conclusion

Researchers are accustomed to studying user innovation communities as external to an organization. However, research has yet to examine organizations that reposition user innovation communities as internal innovation resources, where the organization can capture user innovations directly, without the physical gap separating users and organizations. The ability to respond quickly to the needs of the community and withstand the intensity of the community's demands is necessary for organizations

Acknowledgements

We would like to thank subject matter experts Phillip Ashby, Stephen Bowen, Frank Camarata, Greta Develle, Bernie Emsley, Tony Evans, John Fonnotto, Navin Gupta, Barry Harvey, Ivory Lucas, Lance Kerwin, and Richard Massa. Special thanks to Robert Hooker and Dr. James L. Worrell, who were instrumental in helping us refine our case study findings.

Paul M. Di Gangi is a doctoral candidate in the department of Management Information Systems at Florida State University. He received his masters' degree from The George Washington University in Washington, DC. His research interests focus on the intersection of user-generated content using social and digital networks and organizations, with an emphasis on two areas: (1) virtual network environments and knowledge management and (2) social network effects on an organization's innovation

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    Paul M. Di Gangi is a doctoral candidate in the department of Management Information Systems at Florida State University. He received his masters' degree from The George Washington University in Washington, DC. His research interests focus on the intersection of user-generated content using social and digital networks and organizations, with an emphasis on two areas: (1) virtual network environments and knowledge management and (2) social network effects on an organization's innovation processes. His work has been or will appear in the proceedings of the International Conference on Information Systems (ICIS), Americas Conference on Information Systems (AMCIS), International Sunbelt Social Network Conference, and the Annals of Information Systems.

    Molly McLure Wasko is an associate professor in the department of Management Information Systems at Florida State University where she teaches primarily strategic information technologies. Her research interests include knowledge transfer in lean communication environments, network governance in online communities and distributed work environments. Her work has appeared in MISQ, Decision Sciences, JAIS, the Journal of Strategic IS, JCMC and JITTA.

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