Imitation, it is said, is the best form of flattery. Imitation is the natural follow-on for innovation. Innovation itself is a complex and challenging but essential facet of progress, as we discovered in my blog post of last week. The said post on three horizons of innovation titled “The Mind of the Innovator: Imaginative, Re-imaginative or Disruptive?” was published in Strategy Musings, September 19, 2015 (http://cbrao2008.blogspot.in/2015/09/the-mind-of-eternal-innovator.html). While it is good to be innovator, not all individuals or firms can be innovators. Several individuals and firms find it not merely expedient but even appropriate to be imitators. Given the high cost of innovation and the intellectual quality that drives them, innovations are protected by patents. Innovations that are not protected by patents or whose patents can be challenged and innovations that outlive the granted patent life are open to imitation.
Imitation, unfortunately, has acquired a somewhat negative connotation. Imitation, at least at an intellectually objective level, needs to be seen as a natural concomitant of human and corporate behaviour, and of social progress as much as innovation is. Imitation, actually, is the creative aspiration and expression of individuals and firms to reach to the level of a leader. The adage ‘art imitates nature’ puts imitation in its perspective. Human innovation, like nature, is fundamental. Just as art brings nature to every home and office, imitation brings innovation to the common man. In fact, the greatest contributions, in terms of both affordability and availability, to healthcare sector have been from development of generic pharmaceuticals which are replicas of pharmaceuticals or are essentially similar in respect of biologic products. This one example, leading several other examples from other industries, is more than sufficient to demonstrate the power and relevance of imitation.
Simple but complex
Simple as may sound, imitation is also a complex subject that involves as much science and art as innovation does. Firstly, there can be no bar on, or imitation of, ideas. Creativity in ideas by a few and embracing of expressed such ideas by many is a fundamental first step for efficient and equitable socio-economic development. Parallel innovation is not imitation. This is best illustrated by Nobel Prizes which are often shared by scientists working in different universities and laboratories across the globe. Industrial development takes place innovatively by parallel developments of similar, if not identical ideas, but developed innovatively. For example, the idea of elliptical exercise equipment could be shared by many but only a few can produce differentiated elliptical equipment with truly harmonious leg and arms movement with differences in innovation (for example, Precor and Octane).
Imitation does not seek to change the product configuration or functionality. It seeks to simply make it cheaper or more efficient (or both). Lack of patent barriers does not mean that imitators have an open sky opportunity. There could be significant other barriers for imitators, including barriers related to development, production, people, quality, and market barriers. Market barriers could include brand image, channel access, distribution strength and so on. Imitation with differentiation is essential for acceptability. At firm level, viable imitation could be a matter of superior management skill but at an individual level viable imitation is harder to achieve. No individual can, in fact, be imitated though some of the characteristics can be imitated; for example, characteristics like application, communication, networking can be imitated but the total personality cannot be.
Imitation, whether at firm level or at an individual level, requires a clear strategic thinking backed by execution excellence. The reasons are obvious; an innovator has the first mover and first provider advantage and, more often than not, succeeds in building a brand loyalty. Imitator has to challenge the innovator to be able to succeed. And most imitators take the easy but important route to succeed – of competing on price. In some ways, this is a natural structural reality of imitation as the imitators do not need to commit huge sums of money in experimental R&D or prototype evaluation on one hand or on distribution channels and market making on the other. In several cases, third party manufacturing may be an available option and in some cases, the market itself may be weary of market dominance by a monopolist. The real challenge of imitation lies in none of the above which are fairly commonplace enablers or corollaries of imitation.
The previous blog post on innovation hypothesized three horizons of innovation, namely imaginative, re-imaginative and disruptive. The author proposes that imitation, likewise, can be made to happen in three horizons of replicating, improving or evolving. Imitation at its basic form of replicative imitation exists when a complete spec to spec to copying is resorted to. This happens, in fact, at the tail end of imitation lifecycle when a product or service is commoditized with low entry barriers. Replicative imitation can survive solely on the basis of price competitiveness for lack of any differentiating feature. Replicative imitation gets a lift when such products are offered by firms with a superior reputation for quality, customer satisfaction or scale and scope. A processed food product offered by an FMCG giant, for example, would be seen as a better product than that offered by a small scale regional player though it could just be a perception and not necessarily a reality.
Imitation in the middle horizon of improving imitation occurs when a product or service idea is imitated with notable improvements thus providing a differentiation. Firms as a matter of routine seek to imitate their own products with improvements. The personal assistants in smart phones, for example, are improvements over successive generations of their own products. Improvement in imitation can help firms gain a foothold in the marketplace in the face of dominance by an innovator. Samsung’s Galaxy phone line-up has been an imitative improvement by an imitator firm seeking a strong entry into the turf of Apple, the dominant innovator. Even innovators gain through imitative improvements. The market believes, for example, that as a concept Apple’s latest launch of iPad Pro is an imitative improvement over the rather successful Microsoft Surface tablet computer that could revive iPad sales.
Imitation in the higher third horizon of evolving imitation occurs when a product concept is evolved to imitate innovative competition better. Bajaj Auto’s Quadricycle (RE 60, now called Qute!) is an evolution to compete with its own three wheelers on one hand and the lower end of LCVs and passenger cars operating in the taxi segment on the other. Tata Motors is taking the evolutionary imitation to the next level by launching Magic Iris, its low end LCV, as a safer alternative to Quadricycle. Evolutionary imitation has pros and cons. The advantage obviously is the ability and felicity to build on an existing platform while the disadvantage is that evolutionary product development may not mach the robustness of a ground-up holistic new product development. This is evidenced by the criticisms being faced by RE 60 in terms of safety and other challenges. Yet, evolutionary imitation represents one of the most impactful facet of balanced product development.
As a high level philosophy, everything that is synthetic is nothing but an imitation of nature. Whether it is innovation or imitation, neither is as original as nature. To consider, therefore, that only innovation needs to be aspired for, and imitation needs to be deprecated is probably presumptuous. That said, innovation represents the higher intellectual challenge of fundamental development while imitation represents a different type of challenge of holding one’s own against innovation. With three forms of innovation (imaginative, re-imaginative and disruptive) and three ways of imitation (replicating, improving and evolving) being available, firms can develop a judicious mix of innovation and imitation. The balance between innovation and imitation depends on whether and how originality and creativity are built into only product development or all through the value chain, from development through manufacturing to delivery of the product.
There are three principles for such a philosophical balance. The first is to innovate in a niche where the firm is willing to commit significant resources, including time. This could be in terms of reinforcing the core strengths of the firm or adding new core strengths. Investments by Sony in camera sensors and by Samsung in OLED panels are two examples of the first type of innovation that strengthens the core competencies. Investments by Microsoft in devices, especially gaming devices like X-Box and computing and connectivity devices like tablet computers and smart phones are examples of the second type of innovation, The second principle is to unhesitatingly imitate a pioneer’s idea, especially when it purports to become a new wave but develop, manufacture or deliver the product in a more innovative way than the pioneer could or would. Development of elliptical trainers with additional patented movements or development of body-countered seats with electronic dynamic adjustments are two examples.
The third principle is to just imitate all through the value chain but making sure that in each part the firm offers better quality and lower cost. The third principle reflects the essence of generic competitive strategy, with a strong focus on superior execution. Markets and nations immensely benefit when a fair and judicious balance of innovation and imitation is offered to the consumers. Firms and individuals need be neither obsessive nor deflective of either. The challenge for leadership is to develop an ecosystem wherein both coexist symbiotically because that is the way the society gets benefitted the most. In its pristine form, innovation transforms the way we live. In its sublime form, imitation stretches innovation to its limits. At some point they combine to reinvent both innovation and imitation. The brilliant mind of an artful imitator is no less important to this world than the exceptional mind of a creative innovator, and vice versa, in a philosophical sense!
Posted by Dr CB Rao on September 26, 2015