When I first started working for GTE, I went to a seminar where different operating divisions discussed their businesses with a group of recent hires. The highlight of the afternoon was the lighting division, where the presenters highlighted their contempt for their arch-competitor, General Electric, by smashing a four-pack of GE lightbulbs under their feet.
I was working for the Government Systems group at the time, on a long-term project, and felt light years away from competitors. I envied my colleagues for the intense loyalty they displayed.
More recently, an executive at a company I know sent an email to all employees outlining his displeasure that certain employees were using competitor products instead of the company’s. Using the company’s products was a matter of loyalty. He made it clear: competitor products were banned from the workplace, and suggested that employees who didn’t agree were perhaps working for the wrong company.
In Oded Shenkar’s provocative new book “Copycats: How Smart Companies Use Imitation to Gain a Strategic Edge,” he writes this:
Innovators must focus their efforts on a few core features, and even then they may produce a novel and creative recombination of imitated and innovative elements. This combination will surely be resisted by innovators that despise imitation and view it as anathema to their vision statement and claims of corporate leadership; but unless these companies accept imitation on equal terms, they may drown in “invented here” risks and costs while watching their competitors fuse innovation and innovation into a winning formula (p.182)
The lesson: you can’t figure everything out yourself, and shouldn’t. The same pride that causes you to smash your competitors’ lightbulbs under your feet can prevent you from using your curiosity and problem-solving skills to thoroughly understand companies who have the same issues and perfectly good solutions that you could adopt – rather than relying on your own skills to solve every problem.
Is loyalty of the type expressed by lightbulb smashing and the executive’s email bad? No. But it has side effects, and those can be significant. The balance between loving your own products and being curious and respectful about what others (even competitors) have done is very delicate, and executives, no matter how intense their own loyalty may be, must manage this balance.
Commoditization is a word that sends chills up the spines of CEOs worldwide. A commodity is a completely replaceable, fungible item, purchased from any of many suppliers, with prices depressed to not much above the variable cost of production. Yuck!
Richard A. d’Aveni of Darmouth’s Tuck School of Business has produced a slim volume entitled, “
