Successful companies retain their competitive edge by fostering innovation: innovation in their product ideas, but also innovation in their business model and business processes. Innovation involves approaching new technologies, new functions and new methods of working – founded in solid knowledge of the environment, the trends, the customer requirements and the market needs at stake.
Tops and flops
Innovation-based activities go hand in hand with high risks. For many companies, systematic innovation management is an alien concept. In an innovation-based environment, the type of business model generally makes or breaks the success of the project:
- The inventor (innovator) has good ideas, but rarely takes these innovations far enough for market success.
- The product pioneer is able to develop a prototype – but this often has weaknesses that hold it back from market-readiness.
- The first mover is a product developer with the ability to transform the innovation into a saleable product – but is unable to maintain competitiveness for long.
- The fast follower is flexible and adopts the innovation, runs a precise analysis of its function and market, and then quickly launches a competitive product that generally improves on the functions of the original.
Successful fast followers have the infrastructure they need, and generally face the lowest risk. The business world is teeming with examples of fast followers and their innovations, from telephones and automobiles to pharmaceuticals, consumer electronics and many more.