When I looked for the consummate imitators, I was surprised to see that quite a few were also known as innovators. This was true of Wal-Mart, IBM, Apple, Procter & Gamble, Sherwin-Williams, and Cardinal Health, among others. General Electric (GE), a storied innovator and one of the most imitated firms, uses imitation to outmaneuver competitors that have superior technology and has a history of importing practices, such as quick market intelligence from Wal-Mart and new product development methodology from HP.
We call such firms imovators. Imovators understand that imitation is not contradictory to, but rather supportive of, innovation. As Lionel L. Nowell, formerly senior vice president and treasurer of PepsiCo, says, “Even if we're trying to innovate, we also want to know what other people have out there, so some of the innovation, as funny as it is now that you think about it, is driven by imitation,” and, as a result, “even when we look to imitate, we say we've got to make it better and turn it into almost innovation.”
Distinctiveness, offers P&G's former chief technology officer G. Gilbert Cloyd, often comes not from new elements but from the way they are put together, or what I later call assembly, or combinative, architecture.
Imovators make a conscious decision about when to innovate and when to seek parity. They understand that they need, in the words of Cardinal Health's chairman and CEO R. Kerry Clark, “to adjust and sweeten the mix.”
P&G, for instance, sees innovation as its key differentiator, but as stated by former P&G executive Cloyd, “Where there are elements of parity, if someone has figured out a better way to do something or deliver something, you're gonna use it; you're not gonna feel a need to go out and invent some other way to provide the particular aspect when there are no tangible or perceived consumer benefits.”
Nowell sees it in much the same way: “Innovation we see as a clear competitive advantage; [the purpose of] imitation is . . . to make sure we're not disadvantaged.”
For imovators, the point of fusion of innovation and imitation tends to occur in or around the key strategic junction. For P&G, for instance, this junction is the customer experience, or, in the company's jargon, the two “moments of truth”: the purchase decision and the usage experience.
Imovators build on the capability platforms shared by innovators and imitators. These include the ability to sort a vast array of information and data points and tap various knowledge bases rooted in different areas and disciplines. Imovators also possess the skill to avoid deceivingly simple modeling of complex realties and the ability to parse a multifaceted puzzle into recognizable parts without losing sight of its combinative architecture.
Imovators also know how to develop and leverage the distinct qualities associated with imitation. These include the ability to conduct broad searches in real time, work from multiple models, understand correspondence between a product or model and its market, and undertake quick and effective implementation, improvising as they move in a rapidly changing environment. Imovators do it in a creative fashion, engaging in what the Romans called inspired imitation.
Just as European entrepreneurs married Chinese porcelain to modern production techniques (see chapter 2), imovators fuse imitated elements with ingenuity and cognizance of context and circumstance. This practice enables imovators to move from “found with pride” to what P&G calls “Connect and Develop.”
At P&G, an “open innovation” system dismantles external and internal barriers to the flow of ideas and uses rewards that monetize contributions where they are invented. As a result, the company's goal of having one-third of new product ideas come from the outside has already been exceeded, resulting in lower cost, shortened time to market, and improved odds of capturing relevant ideas.