The Destructive Effect of Complex Analytics on Innovativeness

Abstract

Several studies have raised a common concern in the field of management, the lack of innovation. However, they either attribute this phenomenon to the inefficiency of marketing analytics, or to managerial despair in evaluating innovation projects. In this article, the authors propose and empirically test cognitive effort spent on marketing analytics which can lead to the lack of innovativeness, due to the negative impact of high cognitive effort on the managers' mood. In a longitudinal experiment, where manipulating the complexity of the decision context through marketing analytics, the authors demonstrate that managers employing simple marketing analytics expect their competitors to launch more products, compared to managers using complex marketing analytics. They also demonstrate that firms employing simple marketing analytics behave venturesome by embarking upon innovative activities. At the same time, firms using complex marketing analytics take more deliberative actions by innovating less and amplifying short-term gains with high priced products.