Why Electric Cars and Other Breakthroughs Dive After Early Adopters—and How to Reverse the Trend
It’s no secret that purchase of electric vehicles (EVs) in 2023 took a dive from expectations. It surprised a lot of people, but it shouldn’t have. EVs are not dead, but the time to mass adoption has greatly slowed. As of now, EVs have joined the group of 80% of innovations that fail to meet expectations.
Dissecting the Decline
In the case of EVs, why do we “think” buying has slowed? Most experts attribute it solely to reasons of money and time. EVs are too expensive. Charging is expensive. Depreciation suggests the value of the cars won’t hold. It takes time to find charging stations. There is uncertainty over how much time and how many miles a fully charged EV will provide, especially compared to a vehicle that runs on gasoline.
Those reasons are correct, but they are not the whole story.
There are other major categories that drive economic behavior, especially when introducing something new. Understanding and co-evolving with them is imperative as part of the innovation process.
At Third Angle, we use the NEWCO Map™ (Networked Economy of Working Capital and Opportunities) to consider and work with the usual and often underrated factors of innovation and new growth.
Roughly, the more typical, technical, and financial aspects of the economy are located on the left and lower portions of the NEWCO Map™. That is generally where we spend our time when innovating. Sales, media, and change management come further down the value chain, in most cases. Even if design thinking or other techniques are used to learn the user perspective, the user’s context remains a given when it is ripe for innovation.
Introducing the Right Arc of Innovation
After thirty years of working with companies attempting to do new things or do things in new ways, we have discovered the missing link in approaches to innovation. I call it the Right Arc of Innovation.
Human mindsets, relationships, trust, core definitions of value, cultural habits and everyday practices live on the Right Arc. They greatly impact turning an idea into an operational reality.
Here's the trick, the Right Arc must be innovating simultaneously with the Left Arc, and the two need to influence each other from the beginning of an idea through its full adoption and feedback. It is a full systems approach to innovation.
Technologists, financers, and policy makers often avoid the Right Arc, or leave it to others (i.e., the implementers) because it seems messy and, to some, does not seem like innovation. I would argue we have to be even more insightful and creative when innovating very human-centric systems, because there is so much complexity involved. Complex, yes, but rich with innovation opportunities.
One of the first principles of learning and adaptation is that people learn and adopt new things by linking them to something they already know, do, value, and perhaps want to improve. People need bridges and support systems to make their investments in new things worth doing cognitively, emotionally, and financially. Much of this bridge building and support building is incremental. But it is the combination of these so-called “small things” that converge to allow breakthroughs to happen, including the long-term adoption of game changing technologies.
3 Things You Can Do To Improve Innovation Success
- Transition Technologies. Toyota is a great example of a company that bet on the adoption of hybrid vehicles occurring before electric vehicles, and perhaps paving the way. Part gasoline, part electric gives people a choice to toggle between the familiar mindset and practice and yet ease into something new.
- Design Support Ecosystems. Many of the vehicle manufacturers singled out EVs as the next wave and competitive advantage. So, they jumped in primarily on their own. Yet, the success of their products requires a whole new ecosystem of charging stations, road-side service for electrical failures, financing, more examples of the practical benefits, to name a few. Think of how easy and pervasive it is to access what we need to drive and service gasoline-powered vehicles. Back to the NEWCO Map™ - all the factors affecting success need to be accounted for and designed into the product and its environment early. The point is not to support the product as the number one goal, but build things that support the users, with the product only being one part.
- Networked Partnerships. Building off the ecosystem idea, no one industry can build these ecosystems on their own. But the need presents great opportunities for new partnerships across companies, communities, and the driving public. Their design ideas, new business models, secondary services and technologies can contribute to practical, assessable, affordable ecosystems.
In my upcoming book The Power of Hidden Treasures: How to Break Through Growth Barriers, Catapulting Your Business from Surviving to Thriving you will find many examples of innovators and inside entrepreneurs using these and other bridging strategies that link the Left and Right Arcs of Innovation. You will see how they uncover viable ideas and transform them into reality, changing the game, for the better, for their businesses and the people involved.