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
A daily miscellany of general election facts, figures, trivia and traditions
voicesThere's still time for someone to do something to make us care
Life and Style
Arts and Entertainment
Michael Corleone, played by Al Pacino, goes back to his family's Sicilian roots in the first 'Godfather' film
Kim Kardashian speaks on the Today show about her step-father's transition
Wenger and Mourinho square-up to each other earlier this season
sportAll the action from today's Premier League, including Everton vs Man Utd and Chelsea vs Arsenal
Tepper had a stunningly successful career as a songwriter
Arts and Entertainment
Len Blavatnik
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions