Factors influencing ex ante perception of innovation radicalness: An experimental design

Selecting radical innovation projects is hard. One of the main problems is that ex ante measurement models to evaluate innovativeness are not reliable. The current literature is mainly focusing on retrospective measures, like technology cycles, expert panels and patent measures to differentiate radical innovations. Consequently the evaluation of innovation radicalness is mainly based on personal perceptions. But in order to define a balanced project portfolio by controlling risks and uncertainty and to maximize its economic value an unbiased perception of innovation radicalness is crucial. This study examines an individual´s ex ante perception of innovation radicalness to understand if a systematic bias of radicalness exists that might influence innovation selection and funding decisions. We conducted a two-factorial experimental design involving market and technology attributes of innovations. The experiments were conducted with over 100 managers. The findings clearly indicate a consistent perception bias. People regardless of demographic characteristics prefer technological attributes over market attributes when categorizing product innovations as radical. This suggests that market attributes of innovations might be underestimated and could lead to a mismatch between technology, market position and resource utilization and consequently risk project portfolio balance.