Business analysis: ‘Is business success really all about innovation? Imitation can be just as important’

Innovation, we are constantly told, is the lifeblood of business. Would-be entrepreneurs, in particular, are seen as innovators – seeking to gain an advantage over established players through coming up with new ideas for products or services, or at least new ways of producing or providing them.

Such attitudes are reinforced by investors, policy makers and, above all, business schools, where there is an emphasis in the teaching and writings of academics on the importance of the new. The phrase “innovate or die” – prominent in the title of more than one business book of recent years – is very much the rallying cry.

But is business success really all about innovation? Oded Shenkar, himself a management professor, suggests not. In his book Copycats (Harvard Business Press, £19.99) he argues that in business, just as in such areas as biology and philosophy,imitation can be at least as important as innovation. He cites Jared Diamond, the academic and author of such books as Guns, Germs and Steel, as pointing out that human development would not have been possible without imitation. In all but the most isolated societies most new technologies were not developed locally by were borrowed from other societies. Concentrating on the world of business, Shenkar points to research indicating that most value creation in businesses in the US over a 30-year period could be traced to just four ideas: power retailing (“big box stores” like Home Depot), mega branding (umbrella branding by Disney and others), focus/simplify/standardise (as in McDonald’s process simplification), and value chain bypass (eliminating the middleman, the Amazon model).

Shenkar acknowledges that a love of innovation fits with the American psyche and the importance attached to individualism. After all, it is claimed that eight of the 10 leading innovations of the 20th century originated in the United States. But this has not always proved enough to guarantee success. Towards the end of the last century, when American economic power faltered, much of the strength of Japan’s economy could be attributed to Japanese companies’ skills at imitating – and improving – all sorts of things, from cars to consumer electronics products. These days, it’s the Chinese who are taking a similar approach.

Yet throughout this period, Americans have not been ignoring imitation. Indeed, it is often accepted in Europe that when it comes to research and development, American companies are better at the “D” part – commercialisation of the idea – than their counterparts in Britain and Europe. It’s just, argues Shenkar, that innovation has come to be seen as the Holy Grail. And what is seen as important in the US is apt to be adopted in Britain, if less so in the rest of Europe.

The argument might be surprising. But it should be encouraging for would-be entrepreneurs and investors who are feeling frustrated by their inability to come up with a completely fresh idea. Shenkar provides plenty of instances of companies that have copied their approach from others.

A notable example is Ryanair, which freely acknowledges its debt to the US budget carrier Southwest Airlines. The book cites Michael O’Leary, current chief executive of Ryanair, as saying: “All we’ve done is copy Herb Kelleher’s successful model. In fact, we’re maybe the only people to take it beyond where Southwest has gone with it.”

The part about taking it further is the key. As Shenkar makes clear, it is not enough to just copy. Plenty of people have tried that with low-cost airlines and failed. What sets apart the successes is the ability to add innovation to the imitation. In other words, you may not have to have an original idea (in fact, not being the first to market can save a lot of time and effort in creating a market), but to prosper you need to have a plan for improving on the original. And if you have that you may just do better than if you had the original idea.

Start your day with The Independent, sign up for daily news emails
News
peopleJonathan Ross has got a left-field suggestion to replace Clarkson
News
Johnny Depp is perhaps best known for his role as Jack Sparrow in Pirates of the Caribbean
peopleBut how did he break it?
News
Andy Davidhazy at the beginning (left) and end (right) of his hike
video
Arts and Entertainment
The teaser trailer has provoked more questions than answers
filmBut what is Bond's 'secret' that Moneypenny is talking about?
Sport
footballDoes Hodgson's England team have an identity yet?
Sport
Lewis Hamilton secured his second straight pole of the season
f1Vettel beats Rosberg into third after thunderstorm delays qualifying
News
news
ebooks
ebooksA special investigation by Andy McSmith
Travel
travel Dreamland Margate, Britain’s oldest amusement park, is set to reopen
News
Founders James Brown and Tim Southwell with a mock-up of the first ever ‘Loaded’ magazine in 1994
media
News
Threlfall says: 'I am a guardian of the reality keys. I think I drive directors nuts'
people
Voices
voices The group has just unveiled a billion dollar plan to help nurse the British countryside back to health
News
The Westgate, a gay pub in the centre of Gloucester which played host to drag queens, has closed
news
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss