Cindy Caldwell Prcis of: Haradon, A., & Douglas, Y. (2001).

When innovations meet institutions: Edison and the design of the electric light. Administrative Science Quarterly, 46(3), 476-501. Introduction This paper explores the role of design in balancing the innovative and the established when a new idea is introduced to society. An historical account of Thomas Edisons electric lighting system is used to illustrate how robust design can take advantage of and displace established institutions. The value and significance of a new enterprise is shaped by both institutional and economic influences. Public understanding and promotion is critical for acceptance. The typical focus when promoting a new idea uses functional and economic advantage which neglects the social embeddedness of acceptance by the public. Social embeddedness is displayed through schemas and scripts that establish acceptable understanding and action which in turn helps us interpret new situations. Schemas provide a basis for broad assumptions. Scripts allow specific action. Entrepreneurs must demonstrate novelty using existing language to make new ideas familiar otherwise they will not be valued. Edison planned his enterprise around the familiar gas system using a design that purposely mirrored the existing objects and social structures of gas utilities. Ten years after Edison unveiled the incandescent bulb and system of power generation in the office of JP Morgan his system had displaced a powerful gas infrastructure that had existed for nearly 50 years. Obstacles to Institutional Acceptance Edison prevailed in spite of many obstacles that he faced:

Cindy Caldwell The British and United States scientific communities were highly skeptical of Edisons vision. The gas industry was well established. Gas companies were integrated into the social, economic and political infrastructure. The dangers of electric lighting outweighed the benefits. The cost of the system was tremendous with the use of copper conductors and limited range. Buildings needed to be renovated to accommodate wiring and the gas companies retaliated by consolidating and driving prices down. Use of Robust Design Edison could have easily promoted his new idea by pointing out that gas produced soot and had low illumination and electric was clean and bright, but instead responded by building a robust design. Robust designs have familiar themes embedded in them to gain acceptance with the public. Initial feelings of familiarity must be flexible enough to allow for new understandings to emerge about the innovation. Robust design acknowledges the interdependence of technical and social functions. When a new technology emerges a social process is initiated that embeds it within a shared set of understandings and actions. Too much novelty in design may create misunderstandings and lack of acceptance. Too much familiarity creates resistance. Skeumorphs highlight a principle of robust design. Skeumorphs are elements of design that are no longer functional but were necessary in the original product and are essential to public understanding of and familiarity with the new innovation. Examples include wood veneer on televisions and radios and the reintroduced Volkswagen bug that retained the same shape but was entirely redesigned internally. 2

Cindy Caldwell Following the premise of robust design, Edison presented incandescence as cheap and practical and built the first commercial power plant to facilitate acceptance. He modeled the gas industrys familiar centrally located generating facilities even though it was not the cheapest or most practical. It was also located strategically to gain political support. Edison purposely used dim 12 watt bulbs that were familiar to users because the lights brightness was the same as gas. In addition, he buried the lines underground versus overhead sacrificing high power losses. The gas institution consisted of coal manufacturers, lamplighters, suppliers, customers, politicians and investors. Change was resisted through the harsh negative resistant of incumbents that resulted in legislation promoting the status quo. To reduce institutional opposition Edison brought influential gas financiers in as investors in the electric system. The financiers then tried to control the design of the new system without success, but destabilized Edisons future control of the enterprise. Other examples demonstrate the utility of robust design and the consequences if the evolution and impact are not accepted by the institution: Edisons phonograph was relatively unique and although it had many potential uses it was advertised primarily as an electric stenographer. By understating the importance of reproducing music on the phonograph, Edison unintentionally narrowed the publics ability to relate to the product by challenging pre-established schemas and scripts and the phonograph was initially rejected by consumers. Prodigy was one of the first consumer on- line service providers. The companys schemas and scripts were built around advertising and online information sharing in contrast to growing public fascination with and demand for e-mail service and message boards. Prodigy's business model depended on 3

Cindy Caldwell advertising and online shopping revenue. Prodigy designed their email services primarily to aid shopping not for general communication between users. Prodigy was slow to change its schemas and scripts to gain public support for their product. Public dissatisfaction increased when they levied E-mail and message board surcharges and they lost a significant share of the market. The TiVo digital video recorder could program, record and replay programs but had remarkable potential to expand beyond the understanding of the VCR. Using the system of robust design, TiVo needed to decide which features to present as new, which to present as familiar and which to conceal from public scrutiny. TiVo was originally introduced as an advanced generation VCR with the same look and feel of a VCR, but also needed to be seen as novel in order to break through the strong understanding and acceptance of the VCR institution. This was done by promoting the sophisticated recording technology that not only records requests, but also material that the consumer may likely be interested in viewing based on viewing habits. The ability to automatically skip over television commercials was a major concern to the media industry and was initially downplayed as a feature. Conclusion Thomas Edison developed a system of electric lighting that altered the established institution. His use of design provided a way to mediate between innovation and institutions. Specifically, Edison employed the concept of robust design which makes a product effective in the immediate future and adaptive to changing conditions. Edison purposely downplayed his invention of an electrical system and used a familiar gas design to gain acceptance. This study demonstrates that historical cases can highlight how innovation emerges from and shapes the 4

Cindy Caldwell institution. Similar use of robust design is evident in the evolution of organizational theories that introduce a new model by integrating familiar premises.