Quantum Leaps Or Baby Steps? Expertise Distance, Construal Level, And The Propensity To Invest In Novel Technological Ideas

Research summary Deliberate cognition is an important mechanism for overcoming inertia. Yet, the precise nature of cognition that propels decision-makers to endorse novelty is not well understood. We propose that expertise distance is a fundamental force shaping decision-makers' willingness to invest in novelty. We further suggest that the level of mental construal through which information is processed moderates the effect of expertise distance on investment propensity, principally by changing decision-makers' perceptions of an idea's novelty and usefulness. We test our theory in two studies. Study 1 is a field study of 120 decision-makers considering a novel technological idea-quantum key distribution. Study 2 is an experiment that conceptually replicates our first study. Our findings contribute to the debate on strategic cognition and the microfoundations of strategic adaptation.Managerial summary While the pursuit of novel technological ideas is the driving force of sustained competitive advantage, managers often reject novel ideas in favor of more familiar ones. How then can managers who are out of their depth with a novel technology make sense of it without rejecting it outright? Some suggest that managers should mentally extrapolate from prior experiences with similar ideas. Yet, such extrapolation is impossible when ideas are truly novel and no previous experience with related ideas can be called upon. We resolve this issue by showing that the level at which managers who are unfamiliar with a novel technological idea mentally process it (abstract versus concrete) influences their perceptions of the idea's novelty and usefulness, which, in turn, influences their propensity to invest.