Ep 5: The value of rumours in tech innovation

04 July 2019

Gossip, hearsay and innuendo are an everyday part of life, but as a society we generally frown upon the spread of unverified information. In a new paper examining the dissemination of rumours within the tech sector, however, assistant professor Tim Hannigan contends that partial knowledge can and does influence the trajectory of product development. Rather than pretend like they don't pay attention to tech blogs and forums, Hannigan argues, companies might be better served incorporating this partial information into their formal planning processes, and even consider strategically leaking bits of information to rumour sites in order to spur feedback and innovation.

CPI podcast - The value of rumours in tech innovation


Tim Hannigan - Assistant Professor of Strategic Management and Organization, Alberta School of Business


Andy Grabia - Digital Communications, Alberta School of Business

July 4, 2019 25 minute listen

Episode Highlights

  • Rumours don't receive a lot of academic attention in terms of how they may drive innovation and product development.
  • Internet technologies and "rumour sites" have broadened the availability of product innovation rumours, and the reach and impact of these product rumours can be expected to increase over time.
  • The study of product innovation rumours can help address and expand our understanding of the "paradox of openness," and how open a company or organization should be with knowledge.
  • The Paradox of Openness: It's good for companies to share information with the public. They can get feedback on product, including suggestions on how to improve a product. But by opening up and sharing this information, they give competitors the opportunity to steal, copy, borrow, and accelerate, therefore losing a competitive edge.
  • Rumours shape perceptions of stakeholders both inside and outside of a company.
  • Example: A staff member inside of a company may be scanning a discussion forum full of electronic developers, and discover that a new component is being built in Japan. The company is then able to use to this partial knowledge to contact a manufacturer and inquire about the existence and availability of the component.
  • Example: A blog or website shares a rumour about something like a new feature, app, or price point. A company can then monitor those sites for consumer reaction, and decide whether to proceed with their original plan, or modify.
  • Even in an environment where there is a policy to not individually interact with technology blogs, engineers and other employees will reference them and make use of the provisional knowledge they contain.
  • Companies might want to consider changing their policies. Managers may wish to have policy discussions regarding how rumours are treated within a portfolio of other information, rather than just allow this process to unfold without concerted direction.
  • Managers should also weigh the potential strategic use of leaks from their organization, using crowdsourcing to facilitate innovation.

Further Reading

Product innovation rumors as forms of open innovation - Timothy R. Hannigan, Victor P. Seidel, Basak Yakis-Douglas

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