Copy That

In business, imitation is more than a form of flattery.
This story appears in the 2006 issue of Entrepreneur. Subscribe »

Being a copycat has always been anchored by a sense of derision. But now Randall Rothenberg claims that imitating an idea is not only efficient--it can be effective. The senior director of intellectual capital at global strategy and technology consulting firm Booz Allen Hamilton and contributor to The Big Moo: Stop Trying to Be Perfect and Start Being Remarkable explains how imitation is becoming a major path to business success.

Entrepreneur: You say imitation across industries is a more effective and profitable strategy than the promotion of innovation and creativity. How so?

Randall Rothenberg: Big breakthrough ideas, if successful, can create new markets. But there's ample evidence that some of the biggest businesses are built by taking existing ideas and applying them in a new context. Research by Booz Allen Hamilton looked at data about value creation across industries. It found that only four distinct ideas had been responsible for an overwhelming majority of value creation in the U.S. over a 30-year period: power retailing, where big-box stores can drive costs and consumer prices down (Home Depot); mega-branding, which is the development of a powerful umbrella brand (Disney); focus/simplify/standardize, where process simplification allows for ready multiplication and growth by relentlessly lowering costs (McDonald's); and value-chain bypass, where middlemen are eliminated, thus delivering lower prices or higher revenue (

Don't look for the business that's never been tried, because you can break your brain trying to find that, and you won't have any concept of the risk or opportunities. Instead, take a look at something that has worked, and see if it can be applied in your context.

Entrepreneur: How should entrepreneurs begin looking for these great ideas?

Rothenberg: I'm a believer in small-scale experi-mentation-it's the low-cost, low-stress, high-joy R&D effort. The web and the tools to create and manage websites [give you] some of the greatest R&D opportunities in the history of commerce. [For example, a retailer] can use the existing infrastructure of eBay [to test products].

The largest company on earth, General Electric Co., is a heavily strategic company, and as large as it is, it prizes imagination, innovation and inventiveness. One of the rules they learn at GE is you can really experiment with anything, as long as it's strategically aligned, and you can do it on your existing incremental budget.