Recently, I had an insightful conversation with a bright and newly promoted senior business executive. I predict she will make a positive impact on our business and civic community.
She shared with me that, in order to accelerate her learning curve, she’d met with several seasoned professionals to enhance her development as a major change agent in her business sector. Instead of being inspired by what she heard, she left the meetings rather frustrated. “No one is doing anything really new, and there is very little that is innovative in the businesses I observed,” she bemoaned. Our conversation ended with her assuring me that business professionals need to be more “innovative or die.”
Talk about pressure! Seems like nearly everywhere I turn these days, I hear or read that you must innovate, change or transform at warp speed. It’s enough to make you feel the key to success in business is to never take your eye off the finish line of innovation, and that first to market equates to first to success.
I get it. Donald Trump recently tweeted a commonly held sentiment: “No one remembers who came in second place.” Likewise, innovation is most often associated with someone who invents something that is first and new to the market.
There’s nothing wrong (and plenty right) with believing in and utilizing innovative practices. But academic studies, innovation experts and entrepreneurs caution that while the old adage “it pays to be first” may be wildly popular in our society, in business, there are advantages to “arriving late to the party.”
For example, answer the following three questions: 1) Who made the first digital-music player? 2) Who made the first smartphone? 3) Who made the first tablet?
If your answers were Apple, Apple and Apple, you’re incorrect on all counts. Apple was not first when creating the iPod, iPhone and the iPad, but rather imitated existing products and made them far more appealing. Apple’s successful grasp of the power of imitation has paid off big time, and not just in dollars and cents. Apple has been named the most innovative company for more than a decade, and its improvements in products and services benefit society as well as its stakeholders.
There are a myriad of smart companies that were followers and let the true innovators beat a path, only to later come down that same path and virtually wipe their predecessors off the consumer map: Pampers vs. Chux, Nintendo vs. Atari, Amazon vs. Book.com, Google vs. Yahoo, Southwest Air vs. People Express.
According to a “copycats” study conducted by Robert Goldstone, a professor of psychology at Indiana University, imitators do at least as well and often better than innovators. Imitators have the benefit of learning from their rivals’ in-market experiments and can potentially avoid some of their mistakes. In addition, a study by Peter Golder and Gerald Tillis, “Pioneer Advantage: Market Logic or Marketing Legend,” found innovators captured only 7 percent of the market for their product over time. Moreover, W. Chan Kin and Renee Mauborgne note in their breakthrough best-selling book, Blue Ocean Strategy, that “companies need to continuously drive home the idea that while speed may be important, even more important is linking innovation to value.”
Imitation may not work well in every market. According to Peter Drucker, imitation works best in high-tech sectors, because of its tendency to focus on technology rather than on the market, creating opportunities for an imitator who has learned from the mistakes of the innovator.
Moreover, we have such a negative association with the concept of lawful “copying” and “imitating,” even though virtually every successful company does it. Back in the day, if someone on the playground called you a “copycat,” rest assured it was not a compliment.
However, true innovating is really a combination of copying the best ideas of others, adding new tweaks to them, improving on them, learning from the mistakes of others and continually experimenting. It’s all really a part of the same spectrum.
Remember, the reality is that much of what you believe to be “innovative” is likely a form of imitation and originality. It pays to be a successful innovator by improving an existing product, lawfully copying a business model, offering superior service or simplifying a process. In the absence of being first at the table, being a savvy and innovative imitator can propel and sustain the growth of a successful business over the long run.
Charlotte Westerhaus-Renfrow is a clinical assistant professor of management and business law at Indiana University Kelley School of Business — Indianapolis.
