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Figure 10 shows how the theory of change model has been applied to business entities (Reed and Jordan, 2005b; Reed, 2006b; Vine et. al., 2006). When writing about the business entities domain, the discussion is about manufacturers and other businesses as suppliers and intermediaries for efficient goods and services and not as end-users. An example of the difference is a company such as Best Buy selling and promoting energy efficiency products (business entity) as op- posed to increasing the energy efficiency of a Best Buy store (end-user). A manufacturer may use the ITDP program to make the plant more efficient (end- user) or manufacture efficient products (business entity).

For the business domain, the theory of change has been adapted to capture business related examples of awareness, information seeking, the application of the product model, the changes that might be implemented, and the processes of confirming and sustaining change. While the underlying theory is the same, the application environment has shifted.

Awareness of the potential in making or distributing energy-efficient technol- ogy can come from numerous places. A manufacturer or other business might become aware of an opportunity as a result of discussing or examining informa- tion about technology including its own in-house research. A business or manu- facturer might be exposed to technologies from research or similar programs. Reading trade publications or attendance at trade shows might trigger awareness. Interest groups promoting efficiency equipment might contact businesses about efficient products. A trade association may contact manufacturers or retailers about proposed codes and standards efforts. From an evaluation point of view, we would want to know how widespread awareness is and how it is changing.

In response to this awareness, the manufacturer or other business may begin product and market research exploring the advantages and disadvantages of the technology or practice especially in relation to technologies and practices cur- rently offered. Does it have relative advantage in terms of profit, good will,

Source: John Reed and Gretchen Jordan, 2005.

Figure 10. Generic Version of Diffusion Model Appropriate to Manufacturers and Other Businesses

market leadership, and other valued characteristics? Is the technology or practice compatible with manufacturing facilities, existing business lines, the availability of knowledge, and skills? Can it be handled through existing distribution sys- tems, or will it require its own system? Would the technology add something to the business’s or manufacturer’s product line? Would the product compete with or undermine a current product line? The business is likely to evaluate whether the product will provide some form of competitive advantage. The cost of manufacturing or stocking the product might be explored. The firm might exam- ine the human resource requirements imposed by the product including knowl- edge, skills, and abilities to make, sell, or install the product. A firm is likely to consult peers. The firm might produce a few prototypes or might conduct focus groups to examine the market. The firm might get involved in codes and stan- dards setting as a way of obtaining information (ADM, 2006).

In the end, the firm is going to make at least some initial assessment of the potential for the technology or practice. If that assessment is positive, the firm may commit to an initial foray into the market with the product. From an impact assessment point of view, it is important to understand if these things have happened or are happening.

The firm may examine the complexity of the technology or practice from a number of perspectives. Is it difficult to build? Is it difficult for customers to use? Will customers be put off by the complexity?

As noted above, the business or firm may decide to do a demonstration or work with some selected clients to see how the technology or practice works.

Based on these and other considerations, that firm may decide to reject the technology, postpone a decision, or proceed. Previously, we discussed retail grocery firms postponing decisions about refrigerator case LED lighting. This is an example where the product characteristics are not yet right and the evaluation tells us that the product is not going to have an immediate impact. If the decision is to proceed, then firms will take steps to implement the technology or practice in

Moving a product into the market place is a complex process. If we are to assess the success of a program that is relying on partners to produce, promote, and sell products, we need to have a clear idea of how the product moves to the market.

Implementation in the business domain involves a number of steps. The first step usually involves finance. The firm must decide how to finance the technol- ogy or pay for the initial setup of the practices. It may involve a capital set aside or budgeting money from current operations. The firm may seek subsidies or investments from outside partners.

Implementation will also require a design and / or plan. A design for produc- tion facilities may be needed. Distribution channels have to be decided upon. Showrooms may need to be designed or planned. Stock space may need to be determined. The new products may need to be added to inventory systems. Training requirements for production personnel, distributors, installers, and others may need to be planned and developed.

To implement the plans, a production facility must be built. A production line may need to be modified. Technologies must be produced. Personnel and distributors must be trained. Technologies must enter the distribution system, be stocked, and sold. Installation services may need to be provided. And once the technology is in the field, provisions for a service network and training service and maintenance workers are needed.

The important point is that moving a technology from a research laboratory to a usable product in the market place is a complex process. There are numerous places along the way where the process can become bogged down. If we are to assess the success of a program that is relying on partners to produce, promote, and sell products, we need to have a clear idea of what it takes to move a product to market. And we must be able to assess whether progress is being made in that direction. For example, many utilities want to see the movement of new efficient technologies and practices from being prototypes, to products with a share in the market, and to products that become part of codes and standards (Eilert et. al., 2002; Eilert et. al, 2004). To demonstrate the market effects of such programs, the pathways to the market must be understood, and it must be possible to trace progress along those paths.

It is also fairly easy to see that technologies and practices that have a high re- turn and impose minimal disruptions to existing systems are likely to be adopted by firms sooner than technologies or practices that cause severe disruption.

In the business sector, the success of a product can be confirmed in a variety of ways. Production goals are met. Financial and profit projections are met. There is a stable and rising demand for the service or product. Peers and others recognize market leadership.

Technologies and practices can be introduced into the market, but it is also important to know if they can be sustained in the market. For a product or service to be sustainable, production needs to meet demand, economies of scale need to occur, the product needs to become a part of the product line, the product must capture market share, the product must be profitable, a product development path needs to emerge, and it may be important to create standards.