Two Questions About the Copycat Economy

Over the past few weeks I’ve been doing some webcasts, sometimes called audio web seminars. Fascinating concept. I sit in my office or a hotel room in front of my laptop and a phone. My powerpoint slides are beamed to an audience around the U.S. (sometimes abroad too) and while I control the slides I speak my presentation into the phone. Questions from the audience are e-mailed or phoned into the offices of the enterprise that is producing the show (like Soundview or BetterManagement), and then they are relayed to me. Anyway, last week I did a webcast with BetterManagement about some of the concepts of my latest book Break From the Pack. My main thesis in the book is that today’s Copycat Economy is marked by extreme deregulation, globalization, technological advance, and transparency—all of which lead to accelerations in commoditization of current products and imitation of current services. Therefore, the primary strategic challenge (and opportunity) for any leader is to determine ways to continually “de-commoditize” and “un-imitate” in a way that matters to customers and investors. Before I began my talk, Bill Marriott of BetterManagement posed two quick questions to the senior managers that comprised our virtual audience in 70 corporate locations. 1. When are your organization’s primary products or services likely to be duplicated? (Response options ranged from “never” to “already duplicated.”)2. Does your organization clearly differentiate its products and services from competitors? (“Yes” or “no”)The responses—coming from a wide array of industries-- were interesting: To the first question—about duplication of current primary products and services--here was the breakdown of responses: Never - 0.0%Within years - 33.3%Within months - 22.2%Our product or service has already been duplicated - 44.4%There it is: Clear evidence of the Copycat Economy. Remember, the question wasn’t about ancillary or minor products; it was about primary sources of revenue. No organization—regardless of its size, scope, reach or scale, is safe from the attacks of commoditization and imitation. If anything, my research reveals that the velocity of these attacks is accelerating, which means that even the answer “within years” might be wistful thinking. Certainly, it may be prudent to protect the sources of your current cash flows. It may be wise to continually improve your current cash cows. But that’s for surviving. If you’re interested in simultaneously thriving, you must also be thinking about challenging and reinventing your products, your value proposition, and how you approach your business before the market forces you to do it anyway.For the next question—whether the organization can clearly differentiate products and services from competitors—the response was as follows: Yes - 44.4%No - 55.5%Interesting results. Those who answered “no” clearly need to address this issue with high urgency (not panic). To those who answered “yes”, here’s a couple things to think about. First, make sure that customers and investors are the ones who say “yes”; don’t simply take the word of your engineers, marketers, and other insiders. Second, if the answer is really and truly “yes” as defined by customers, congratulations. But in that case, don’t allow yourself to get complacent, arrogant or risk-averse. Use your current market leadership to take the prudent risks to “de-commoditize”, “un-imitate”, and “re-invent” further. The business landscape is riddled with carcasses of companies that were once market leaders but failed to keep up with migrating value in the marketplace. Remember, the Copycat Economy is relentless and takes no prisoners.