Busting the tech hype curve to uncover lasting innovations
Review the commonalities shared by technology that has lasting power.
As new technologies are developed, they run through a curve: Emergence followed by a peak of excess expectations, which leads to a low period of disillusionment. For technologies that have lasting power, the period of disillusionment is followed by a build-up as more uses are realized. For top innovations, the final stop is mainstream adoption and an ongoing state of success.
Formally referred to as the Gartner Hype Cycle, Bill Pieroni, president and CEO of ACORD, see the curve a little differently.
“I think that is academic, but in reality there is an impetus for a technology, a peak of overinflated expectations and I think there are three options at that point,” Pieroni says.
- Option one: The innovation eventually catches on and is the technology of tomorrow, leading to wholesale, transformative change. Pieroni points out that this option exemplifies the idea that people and industries tend to far overestimate what technology can do in the near term, while underestimating its long-term impact.
- Option two: The technology subsists in a suspended state of underperformance.
- Option three: It dies out.
To uncover how innovation busts through the hype curve, ACORD researched thousands of technologies that were released in the past 25 years to figure out what gives something lasting power. According to Pieroni, the following attributes are commonly seen in insurance technologies that succeed:
1. Expectations & reality align
“What did you think this technology was going to do for you and what did it ultimately do,” is the question to ask.
“When there is alignment between expectations and reality, technology tends to make it,” Pieroni says. He adds it is important not to set incredibly high expectations, especially for near-term goals, because if things don’t quite work out as imagined the investment will be questioned by senior management and other stakeholders.
2. It can be piloted
The insurance industry has a lot of accumulative legacy technology and is hesitant to discard those systems on unproven commodities. This makes it critical that innovations can be piloted in the context of a company’s current systems.
“If a technology requires a wholesale transformation just use it, it tends to not get used by the industry,” Pieroni tells PropertyCasualty360.com. “Even if it is a wonderful thing, you look at it and say ‘I would have to change all the underlying business processes, the organization’s capabilities and the technologies.”
3. Early authoritative adopter & a real network effect
“An early authoritative adopter tends to mean the technology might make it,” Pieroni says.
However, to truly succeed a technology must be ubiquitous. And this is one of the insurance industry’s big technology challenges. Most businesses want, rightfully so, proprietary technology as they feel this will give them a competitive advantage.
This creates a paradox, Pieroni explains: “If you are the only one with it, then that (technology) company probably won’t make it. For a technology to make it, it requires a network effect. But if the technology doesn’t become ubiquitous, you don’t have that real network.”
Related: