Innovations and Tragic Tories

In our rhetoric we IT professionals embrace the ideas of Everett Rodgers about Diffusion of Innovation.  We are challenged to keep up with the early adopters on our campuses who race ahead of us. We put considerable energy into getting late majority users — faculty, administrators, and maybe even some students — to ride the current wave and keep up with us. With the crushing pace of advance in IT, seemingly we are not too far down the diffusion curve of one innovation when the next is already upon us. Should we abandon what we are doing to better prepare for coming changes? Alternatively, should we sustain the current service but at a reduced quality of offering?

This inaugural column in the Framing Questions series is aimed, as will future columns, at helping IT professionals think about positioning their services. In so doing, it advocates for taking a “dynamic perspective” by focusing on the life cycle of service offerings, noting that users will embrace the service at different times — and some never will. My title is a play on the word “trajectories,” a bad pun the meaning of which I’ll make clear shortly.

Thinking about dynamics is hard. I hope to add a bit of insight to make it easier. My approach is to ask sensible questions to help you determine whether your campus is on a good path.

Conflicting Perspectives

When teaching, economists like me tend to prefer static analysis because it is considerably simpler. There we pay obeisance to dynamic issues by talking about the short run and the long run. In the short run, some costs are sunk; this is the world of normal operation. In the long run, all costs are variable; this is the world of planning. (See Keynes on the long run by doing a find on “In the Long Run” without the quotes.) The salient point for us is that those in administration — deans, provosts, chancellors, and their budget officers — tend to engage in long-run thinking because strategic planning is a way of life for them. In contrast, students, faculty, and staff, all who deal with the day-to-day, are more apt to take a short-run perspective on IT. The difference in perspective is exacerbated because we tend to rely on the library model, where services are free to the end user, so end users focus on how the service helps them but ignore its opportunity cost.

The simple static approach encourages the two different groups to see past each other in considering what is important. The dynamic approach has a better chance of bringing the two views into alignment because both can understand the underlying structure.

The fundamental lessons come from evolutionary biology, where for an extended period of time there are multiple competing branches as on a bush, each viable, where the ultimate survivor can’t be predicted. Then random factors end up favoring a particular branch and “natural selection” does its thing: the remaining branches die out and a new set of bush-like possibilities emerges. (A book with an accessible set of essays on this and related ideas is Stephen Jay Gould’s Bully for Brontosaurus,  which ties the biology to the economic dynamics; the way of thinking is very similar in the two fields.) In economics we use terms like “switching costs” and “lock-in” to refer to the selection process; the latter term makes clear the nature of the sunk costs — interdependencies. Lock-in also conveys the idea of being stuck in an alternative that might not be preferred, a slow growth path when there are faster ones possible, but we can’t get there from here because the switching costs are too great.

And now we’re ready to return to my pun. Those of us who are locked into an IT service are very conservative; we want to preserve that service, that way of conducting transactions. Much of sunk cost is our own learning. We know the technology we use. Alternatives are unknown — whether they can deliver the same or better facility in performing the transactions, how hard they are to learn, and further that these things are essentially unknowable ahead of time. We’ve been promised otherwise in the past. And we’ve been burned. So we’re suspicious of the promise of change. That’s why we’re called Tories.

The tragedy is that our lock-in blocks other paths for the campus, trajectories that we’d agree were better if we knew about them. But when knowledge is fundamentally by doing, there is no way to know for sure in advance. The result is opposition across two camps, the optimists (the planners and technology futurists) against the pessimists (those users of the current IT services who feel locked in). Neither group has a clear sense of how the logjam will resolve. Most campuses don’t have policies on why and when a mature IT service should come to conclusion, to be replaced by something new or abandoned outright. Couple this with the budget shortfall so many of us are facing, necessitating that we take cuts somewhere. How should we do that?

While cash may be in short supply, there are non-tangible assets that are more amply available. I’m talking about reputation and trust. If the optimists want their campus to incur the switching costs, they need to view it personally as spending their own non-tangible capital, putting their reputations on the line. The tragic Tory who is asked/required to switch will be angered and frightened by that request, no doubt. The immediate reaction is not the issue. What is the attitude later on? When the adjustment to the new path has been completed, one can make an assessment via an ordinary cost-benefit analysis. Was the change worth it? If the answer is yes, the decision maker’s reputational capital is enhanced and the Tory will be more willing the next time around. Otherwise, the reputation depreciates and the Tory may opt out in the future.

That’s the easy part to understand; now the bad news. We’re all Tories in IT. The extent of the lock-in is enormous. Gould’s book features the famous essay by Paul David on the Economics of QWERTY, a keyboard designed to slow us down in typing. It prevails in spite of many efforts aimed at derailing it. Try implementing the Dvorak alternative on your campus and making it the standard. Then think about the promise (and fiction) of the paperless office, why most of us still rely on analog office telephone service though we all have portable devices as well, why the lecture is still the predominant teaching mode and our classroom technology is designed to promote that, and on and on.

The real question then is, where can we find the lock-in not so ingrained and with seemingly superior alternatives available that the gain might realistically be expected to outweigh the pain? Newer services are likely to have less lock-in. Very old services are likely to have superior alternatives. Somewhere in between is probably the best bet for a regime change. It’s not an idle academic exercise. Would you be willing to stake your own reputation on implementing the change?

There is one final point. We who must absorb risk look for ways to reduce it. Information flow is key. An ongoing dialogue with users is the best way to assess and perhaps offset their switching costs before the fact. Likewise, an ongoing dialogue with sponsors is the best way to assess their view of the perceived benefit from the change.

Will the budget cuts act like that asteroid which fell to earth millions and millions of years ago, forcing some of the IT species to die out? Or will they make a painful but doable adjustment that we endure? The paths we choose are apt to vary from campus to campus, depending on the “animal spirits” of the IT leaders as well as the underlying demographics. There isn’t one right choice for all. But perhaps now we’re a little further along in knowing what to look for.

Lanny Arvan (larvan@illinois.edu) is CIO and Associate Dean for eLearning, College of Business, University of Illinois at Urbana-Champaign.