Imitators beat Innovators!
Copyright by Stephan Klaschka 2010-2024
From my series on how to build a successful BRG.1
So you thought Facebook was the original? Or YouTube? Or LinkedIn? – Get ready for your wake-up call: Break-through innovations are over-rated! Imitators are successful by combining someone else’s innovation with the imitator’s advantage; by doing so, they can become innovators themselves!
Who was first?
Believe it or not,
The first social college network was not Facebook but Network 5460 in China was.
Ecademy in Great Britain was the first social business network before LinkedIn, and
YouTube followed Israel’s Metacafe.
The list is endless and spans across industries – with Network 5460, Ecademy, Metacafe & Co. losing out on the commercial success.
Wrongly praising the first mover?
Why are the pioneers long forgotten while followers are often more successful?
Media hypes are about innovations. Even academia prefers to study innovators rather than the early adopters, who ruled the marketplace after many originals perished. After all, we Innovate to Implement, to see our ideas become reality and change the world.
Where innovators fail
Over 70% of top managers interviewed named innovation as one of the top three strategic priorities according to Boston Consulting Group. Yet most projects fail especially in companies that focus on radical innovations.
In the high-risk and upfront investment-driven pharmaceutical industry, for example, only 10% of newly developed compounds survive the testing phase – and even if the market launch succeeds, only a few pioneers reap the profits: Yale professor William D. Nordhaus found that they were only able to secure 2.2% of the innovation’s value with the primary obstacles being skeptical customers and hesitant partners.
Oded Shenkar, a business professor at Ohio State University, confirmed that copycats often get better returns. While theft of intellectual property (IP) is illegal and out of the question, there is much potential in the (legal) duplication of products, processes, and business models.
How imitators succeed
Being an imitator lends itself to benefits inaccessible to the innovator: As a close follower, you can learn from the mistakes the innovator made earlier. Instead of doing all the initial Research and Development, imitators have the advantage to glimpsing ahead and around the corner: It becomes easier for imitators to attract potential partners and customers as they already have a whiff of the success potential of an innovation. It can also enable imitators to simplify or adapt the original imitation radically or reduce complexity making its usage easier for users.
Often customers are not fast enough to recognize something new and its ‘timely newness’ at its early stage. They tend to notice novelty only later when it already becomes visible in the marketplace or shows up (as an imitation) in another area or industry.
Here lies the power of open innovation and applying novelty successfully to a different industry; think anti-lock brakes for cars that originated in the aerospace industry, for example (see also How to create innovation culture with diversity!).
Overcoming the imitator’s stigma
The word ‘imitation’ has a negative connotation and reputation. However, you can look at it as the extension of innovation into other businesses and industries to benefit the customer by applying novelty, more choices, or lower prices.
It took companies that rely on novelty products, such as innovative pharmaceuticals, a while to understand the trend but then they opened up to go both ways: discover and develop innovative medicinal drug products that are patent-protected but also reap the profits from off-patent drugs in a separate generics business, so to continue the grip on a drug’s business and not losing it all to imitators.
Scaling up
On an even larger scale, countries like China or South Korea are highly competitive and creative powerhouses in the world economy – and they have become particularly good at turning imitation into innovation over the past few decades. The underlying pattern shows the acquisition of technology abroad, and then assimilating and improving it building up R&D of their own in a framework of government policy and a supportive socio-cultural environment.
As a strategy, imitation led to innovation. China, for example, is not only known for fast and creative mobile phone adaptations for their fast-paced and spontaneous domestic market. It shows the largest growth of patents filed in 2011, up 33% from 2010, far more than other countries according to the UN’s World Intellectual Property Organization (WIPO).
More recently, China emerged as a highly innovative force and overtook Europe (Volkswagen, BMW) and USA (Tesla) as the leader in new energy vehicles by volume produced and, arguably, better technology, with brands like BYD and Geely - and heavily supported by the Chinese government.
Also, South Korea has some of the most advanced companies and institutions on the planet today. The plan worked out.
Two sides of a coin
Innovation is a team sport. Breakthrough innovations typically catalyze at the interfaces of disciplines. ‑ Once the dots are connected in seemingly new ways, who can say what has been there before intentionally or even unconsciously? Does it matter?
Imitation can be flattery - it can be an interpretation and adaptation by an entrepreneur, a venture capitalist, or an Executive Champion within a company or organization (see Part 2 of 3: How to become the strategic innovation leader?)
We will see how long the legal defense of intellectual property will hold in the global economy where open source, social collaboration, and digital transparency already changed the face of conducting business.
– In the end, business and progress thrive from innovation and imitation. They are two value-adding sides of the same coin.
Stay tuned for my next post: Boost ‘Group Intelligence’ for better decisions!
From my series on how to build a successful BRG (=Business Resource Group) group, i.e. a business-focused ERG (=Employee Resource Group) first published on OrgChanger.com.