Copycats

Imitation is a fundamental aspect of learning and development across species, playing a crucial role in survival and prosperity. It is the mechanism through which advantageous traits and behaviors are acquired, allowing for the diffusion of ideas and innovations that drive human progress. From newborns learning essential skills by mimicking their parents to businesses analyzing successful competitors to understand their success, imitation is integral to evolution and competition.

Despite its importance, imitation has often been undervalued, especially when compared to innovation. Historians and scholars have traditionally favored innovation, viewing imitation as a lesser form of learning. Economists have echoed this sentiment, celebrating innovation while dismissing commercial imitation as a simplistic approach. However, this perspective overlooks the reality that innovators typically capture only a small portion of the market, with studies indicating around 7 percent. Imitators can sometimes outperform innovators, even to the point of replacing them, suggesting that the value of innovation may be overestimated.

The underappreciation of imitation may stem from cultural values that emphasize autonomy and originality. For instance, the United States prides itself on being a cradle of major innovations, considering its innovative capacity a competitive edge. There is a preference for the narrative of "doing it my way" over acknowledging success through imitation. This is reflected in American firms prioritizing research over development.

Imitation in business is increasingly becoming a strategic necessity due to factors such as globalization, outsourcing, and the codification of knowledge. As noted by Obed Shenkar, globalization has intensified competitive pressures, pushing firms to innovate or risk falling behind. Imitation, when combined with innovation, can be a smart strategy to stay competitive.

Historically, commercial imitation was not well-regarded, but its growth today is undeniable due to several interconnected reasons. Globalization has led to an increase in the number and diversity of market participants, disrupting established relationships. For instance, the U.S. auto market, once dominated by the Big Three, is now fragmented with imports, new entrants, and diverse rivals vying for market share. This is facilitated by globally available business infrastructure. Rapid circulation of vital knowledge and acquisitions providing market access enable emerging market firms to compete with established players.

Imitating another company's success requires a deep understanding of the root causes driving their success. Superficial imitation focused solely on replicating outcomes will likely fall short. The best imitators innovatively adapt elements of the original model to new contexts. For instance, Southwest Airlines pioneered a low-cost carrier model in 1971, operating point-to-point routes with a simplified Boeing 737 fleet. By keeping planes flying with quick turnarounds, landing at secondary airports, and eliminating complexity, Southwest drove down costs. This model was wildly successful, spurring waves of imitators seeking to copy the “secret sauce.”

However, most failed to achieve Southwest’s cost structure through relentless optimization. Legacy carriers even tried to launch virtual airlines like United’s Ted and Song by Delta to import Southwest’s model. These collapsed as operational intricacies overwhelmed them. Southwest smartly attributed success to “spirit” and “people” rather than cost efficiency. This strategic vagueness sent imitators down the wrong path searching for cultural replication. The most successful imitators innovated on Southwest’s model, adding differentiation like JetBlue’s in-flight entertainment and transcontinental routes.

To prosper as an effective imitator, six core capabilities must be developed and mastered, each interconnected and building upon the other. The first capability involves identifying individuals who value imitation as much as innovation, fostering a culture that embraces applying external ideas and concepts without bias towards their origin. This requires humility to acknowledge that others can develop worthwhile ideas, with ideal imitators exhibiting curiosity, open-mindedness, and flexibility, focusing on outcomes over preconceptions. The second capability is determining the right model to imitate, where successful imitators search globally across industries for noteworthy practices, not just within their immediate landscape. This includes looking at obvious innovators, unambiguous imitators, and smaller players relying on innovation to survive.

The third capability is systematically scanning and filtering for promising imitation opportunities, training everyone to spot valuable prospects and grasp technological concepts to envision how an imitation could integrate into existing or future products, processes, or business models. This might include employee exchanges or discretionary time for self-directed external idea studies. The fourth capability involves contextualizing the imitation, understanding the environment impacting the originator's success, and determining necessary adjustments to fit the imitator’s organization, capturing all nuances involved in transplantation.

Imitation is often underrated in the context of innovation, yet a strategic approach to imitation can yield substantial benefits for organizations. Instead of a random or opportunistic imitation, leaders should consider a systematic imitation strategy that encompasses four main tactics. To begin with, companies can emulate their competitors' products and services, while introducing gradual enhancements. This method allows them to capitalize on the successful elements of what's already in the market, while infusing their own distinctive improvements, potentially leading to offerings that are not just competitive but also have superior features in some respects. Additionally, organizations can incorporate process innovations that industry forerunners have developed. By adopting these established technologies and methodologies, companies can boost their operational efficiency and productivity without the heavy investment typically associated with research and development. Another strategy involves adapting business models from one sector for use in another, potentially unlocking new value streams. This enables companies to benefit from tried-and-tested business models from different sectors and find novel ways to generate value that may have previously been hidden. Lastly, marketing and branding strategies can be replicated and then customized to align with a company's distinct brand identity and customer demographics. This tactic allows companies to draw on successful marketing and branding strategies, while ensuring these strategies are congruent with their own unique brand and customer base. By carefully implementing these four imitation methods, organizations can reduce risk while swiftly acquiring essential capabilities and knowledge. With a solid imitation framework, companies can then direct their innovation efforts towards areas where they can truly differentiate themselves. This balanced approach to innovation and imitation can lead to a more effective and efficient pathway for organizational growth and achievement.

In today's complex and rapidly evolving world, no company can realistically expect to pioneer innovations in every aspect of their business. As information circulates faster and global competition intensifies, even industry leaders must make strategic decisions about which core capabilities to invest in innovating, while imitating or adapting proven ideas from others in non-core areas. Theodore Levitt famously stated, "Not a single company can afford even to try to be the first in everything in its field." As Chris Connor of Sherwin-Williams acknowledged, "Even those of us that think of ourselves as the industry leader can’t constantly innovate every part of our business." An emerging strategy called "imovation" fuses innovation in key domains with imitation of effective solutions from other companies and industries.

Imitation has often carried a stigma in business, seen as lacking creativity or vision. However, in a world of dizzying complexity, imitation enables organizations to benefit from tried-and-true ideas without expending limited resources reinventing the wheel. Companies that embrace imitation strategically, with the support of leadership, stand to gain a competitive advantage. Potential sources of ideas to imitate include international markets, different industries, small niche players, and both successful innovators and successful imitators. Of course, blindly copying ideas rarely succeeds; companies must carefully analyze how components of an existing business system interact within their own environment before attempting to implement imitations. Timing, partnerships, business model, and other contextual factors must align.