This was the question posed to me by a few of my friends working with a few Small to Medium firms. Here is the gist of their argument - "It is very difficult to predict and achieve success with innovative products. Sometimes an innovative product may not even be successful since the market is not ready or it is ahead of its times. Isn't it simpler to wait for your competitor to innovate and then if it is really good, we can copy it easily? Isn't this a smarter path?"
I know some of you also agree to these view points. So let me give you my take on this.
I do acknowledge that success by following the path of innovation is long winded and there are no guarantees about success. But ignoring this is even riskier. Let me explain. You can always be an follower when it comes to new products but there are couple of risks your organization is running which it needs to be aware of.
- If your competitor comes up with a innovation which is not simple to replicate quickly, then you could end up losing all your market share even taking your existing customers away from you.
- Every time your competitor comes up with an innovation, he/she gets the first mover advantage which results in getting new customers or maybe a few of your customers who are curious about the new discovery.
The only way to counter these points is by continuously innovating yourself. Note that you can have your own innovation team and still be done in by the above 2 factors. But chances are that over a period of time - it will even out, if you are consistent about innovation.
Another important factor to consider is the brand factor. Your customer is constantly judging and making conclusions of your brand. If you consistently don't innovate and end up just being a follower - you can rest assured that over a period of time, your customer will decide that he/she can't expect any innovation from your brand and will most probably switch to your competitor's brand.
Now that is a risk no company can afford to take.