For as long as there have been first movers—organizations committed to living on the bleeding edge of innovation—self-proclaimed “fast followers” have attempted to stay hot on their heels.
The late Steve Jobs and Apple have arguably been the most successful at the fast follower strategy in recent decades, not by being the first to market with a new concept, but learning from market feedback and tweaking their product strategy accordingly.
However, the tides are shifting. While it may still work for certain products, 2018 will prove that the silver lining is fading for the second-place enterprise.
The payback period on even the best innovations involving consumer adoption have historically been measured in years or decades, not months. However, automation is rapidly changing that game. Chase reported in 2017 that it was able to automate repetitive and laborious tasks thereby saving 360,000 man-hours.
With the new workflow in place, Chase has one of two options: shift employees to higher-value activities (grow the top line) or eliminate their roles (optimize the bottom line). In either scenario, the savings and reinvestment opportunities can realistically be realized in a single quarter. It’s going to be difficult to follow that fast.
Timing has always been one of the most challenging variables in the innovation equation. Countless innovators have had the right vision, but they were either too early or they missed the boat all together.
To mitigate the timing issue, more organizations are pursuing the concept of continuous innovation. With continuous innovation, firms are placing smaller, but more frequent, bets on new channels, technologies, and consumer trends.
For example, Orbitz, at any given time, is running hundreds of experiments across its digital properties. Or take Domino’s: deconstructing their strategy shows that they’ve placed a bet on virtually every new trend and emerging channel over the last decade. Do they all need to be home runs? Certainly not. However, as their stock price can attest, when you pace the field, it’s difficult for anyone else to catch his or her breath.
It can’t be overemphasized that the search for scarce talent resources is at play for virtually all of these trends, especially those requiring enterprises to execute with pace. Dice.com had roughly 6,747 AI roles at the end of 2017, and the Wall Street Journal reported that
graduates with degrees in machine learning just out of school were earning $500,000 per year. Enterprises face an uphill battle if they expect to ideate, source talent, build, and launch new products within ever-tightening competitive windows.
As a rule of thumb, it’s often estimated that first movers get 50 percent of the market, fast followers get 25 percent, and everyone else is left with the scraps. To avoid the middle market squeeze, organizations should look up and down their digital innovation processes to determine how they can get to market with new ideas more quickly. On the delivery end, modern software engineering techniques enabling continuous deployment (see the bottleneck trend) are giving many organizations an edge. When coupled with approaches like rapid experimentation, living on the bleeding edge is more achievable than ever.
Will the fast follower strategy succeed under certain market conditions and for certain products? Certainly. But will it continue to become more difficult to assess when, where, and how to employ this strategy? Absolutely.