Law of Diffusion of Innovations: A Trap for the Unwary

Dear Clients, Colleagues, and Friends,

Meyer celebrated his 75th birthday last year. Although normally a terrifically upbeat person, Meyer just couldn’t shake a feeling of deep melancholy, despite the festivities.

Meyer’s father passed away at 75, and thoughts of mortality had started to pervade his every waking moment. Despite being in good health and active in the business he started 47 years ago, Meyer felt that his time was limited. He still had a lot he wanted to accomplish.

After his birthday, he spent a full day developing a “bucket list.” His wife thought him overly sentimental and negative, but doing the list and realizing how much he still wanted to accomplish made Meyer feel like he had a whole new life ahead of him. He wrote:

  1. Ride a Harley up the Pacific Coast Highway
  2. Go hot air ballooning in New Mexico
  3. Visit Russia (where his grandmother was from)
  4. Go deep sea fishing and catch a marlin
  5. Redo the marketing plan for his business
  6. Dance at his granddaughter’s Bat Mitzvah
  7. Visit his hometown in Michigan for his next class reunion
  8. Learn how to cook his grandmother’s piroshky recipe
  9. Share an exorbitantly expensive bottle of Scotch with friends
  10. Make sure his family would be taken care of when he died

Meyer came to see me a full year after his 75th birthday, and was kind enough to show me his list. He had happily crossed off several of the items, regaling me with stories of his travels.
I asked him what the very most important thing in his life was. Although he said, “Family,” I noticed that Meyer’s bucket list included a lot of fun activities BEFORE he got to what he claimed was the single most important element on the list – taking care of his family. Disturbingly, he wrote the list a full year ago! If he had died over the past year, number 10 – making sure his family would be taken care of – would have been left unfulfilled.

This delaying is not an uncommon phenomenon. In fact, it is a trap for the unwary.

I recently learned about the “Law of Diffusion of Innovations.” Just the name of this well-tested theory of social science makes my head spin, but after doing some research, I’ve come to understand why certain people are resistant to adopting acceptance of innovations in the population and what qualities make those innovations spread.

Changeology” author, Les Robinson, writes:

“Diffusion of Innovations takes a radically different approach to most other theories of change. Instead of focusing on persuading individuals to change, it sees change as being primarily about the evolution or ‘reinvention’ of products and behaviors so they become better fits for the needs of individual groups. In Diffusion of Innovations, it is not people who change, but the innovations themselves.”

The theory applies to all innovations, whether an idea, behavior or object.

Generally, there are five qualities that determine the success of an innovation, as outlined by Robinson:

  • The relative advantage the innovation gives a particular group of users;
  • Its compatibility with existing values and practices;
  • Its simplicity and ease of use;
  • The degree to which the innovation can be tried out; and
  • The degree of observable results of the innovation.

Because reinvention is a key principle of Diffusion of Innovations, the theory seems to easily apply to my law practice. Intellectually, most people understand the need and purpose for protecting their hard earned assets from future unknown lawsuits and legal predators. But for a percentage of the clients whom I regularly counsel on this subject, less than 1/3 of them actually implement a plan to “firewall” protect their assets from these outside forces. For those who procrastinate, after a lawsuit is threatened or filed against them, they will put their money on “Mars” if it means it will be out of harm’s way. And, as you might have guessed, some of these folks who refused to engage in the “firewall” planning regretted the decision due to a future lawsuit or other legal claim.
Thus, I constantly seek to reinvent new ways to motivate the doubters of the importance of such firewall planning for prospective and existing clients.

What the “Changeology” Theory by Les Robinson teaches, however, is that there can be no innovation without user adoption. User adoption can be broken down into five societal groups, and when viewed in conjunction with the five qualities that determine the success of an innovation, some insights begin to emerge:

1. Innovators. These individuals are visionary, imaginative innovators who are willing to take risks, are youngest in age, have the highest social class, and have great financial lucidity and high risk tolerance. Only about 2.5% of the population fits this description.Very few of my clients fit this description because the very idea of asset protection is anathematic to their core system of beliefs. Moreover, very few in the younger generation think about long-term estate or asset protection planning because death and the risk of catastrophic lawsuits is the furthest thing from their minds.


2. Early Adopters. This is the second fastest category of individuals who adopt an innovation. They are often looking for strategic advantages in their lives or businesses and are quick to make the connection between innovation and their personal needs. They are typically younger in age, have a higher social class, more financial lucidity and advanced education. About 13.5% of the population are early adopters.

Some of my clients fit this description, but not many. Early Adopters tend to be much younger; they have not yet acquired families to support or businesses to protect, so estate and asset protection planning is not something they usually consider as necessary.


3. Early Majority. While these pragmatic individuals are comfortable with moderately progressive ideas, they won’t act without solid proof of the innovation’s benefits. They are cost sensitive, risk adverse, and are looking for simple solutions. They like to see results. Innovations that are too complex, require too large of a time commitment, or demand a high learning curve are obstacles to early majority adoption of innovation. Many of them have families and businesses to run, and adopting a new innovation requires the innovator to be sensitive to their time constraints and mental bandwidth. About 34% of society fits this description.

Those that have families and businesses to run are prime candidates for estate and asset protection planning; however, this segment, as well as the ones outlined below, are moved by observable results. The entire concept of estate planning is that the client will not be able to see the results of the work because to do so means they have died. That may not be so with asset protection planning, but the hope is that the client never goes through a catastrophic lawsuit in order to see the benefits of such planning.


4. Late Majority. These individuals are highly conservative pragmatists who will only adopt innovation after the average member of society. They approach innovation with a high degree of skepticism and are generally uncomfortable with new ideas. They adopt innovation mainly out of a fear of being left behind. They appreciate hearing how innovations have benefited other equally risk-adverse, innovation-conservative folks, but are less likely to adopt innovation when they need it most. About 34% of society fit this description.

Like those in the Early Majority, these individuals are prime candidates for estate planning and asset protection planning, but many of the most protective legal instruments are difficult to understand and. again, have a low incidence of observable results. Therefore, Late Majority adopters are less likely to engage in estate planning and asset protection planning than even the early majority.


5. Laggards. Laggards aren’t unaware; they just tend to be slower in adopting newer ideas. They tend to be advanced in age and have a true aversion to change. Laggards tend to be more focused on traditions, viewing the adoption of innovations as high risk behavior. They appreciate control and need to see how others like themselves have benefited from the innovation. About 16% of society fits this description.

Laggards aren’t unaware, nor are they truly “slow.” In fact, Laggards are critical thinkers who feel more comfortable with tradition, status quo and easily understandable solutions. They will not be able to try out and observe the innovation of estate or asset protection planning, nor will they feel that the methods used are simple or easy to use. Few Laggards feel comfortable with complex, creative ideas.

Meyer easily fits into the Laggard Category. Just look at his bucket list for proof. Although he is now 76, he is still actively involved with his business of almost 50 years, he feels deep connections to his hometown classmates, as well as to his grandmother and her birthplace’s traditions. He also feels connected to his own family’s traditions.

Meyer isn’t a bad person for leaving the most important thing on his bucket list for last… he is just an easily definable Laggard. That’s not a bad thing. However, the Law of Diffusion of Innovations states that focus should not be on persuading individuals to change, but changing the product instead. As illustrated above, this simply doesn’t apply to estate planning and asset protection planning. In fact, relying on this theory is a trap for the unwary. The very purpose of estate and asset protection planning prevents the method from diffusing through the population in the way predicted by the theory.

Isn’t it ironic that the people who need estate and asset protection planning the most wait the longest?

Luckily, Meyer was done being a Laggard and decided to take our advice and implement a comprehensive estate and asset protection plan immediately. He protected his family, set them up for future needs, and was able to cross off yet another bucket list item.

If you are ready to move into a new societal mode, let’s have a consultation about how I may help implement an easy to understand – and advantageous – estate and asset protection plan.

Posted in Client Alert.