21 March 2007

The follower's dilemma

Working in a large corporations absolutely waters down your apparent effect on success. Yes, I can be a team player. Yes, I can be patient enough to manage the slow moving sloth like change, but can I exist for long in a company that is comfortable being the follower?

The standard text book strategy for market followers is: optimize the market leaders R&D investments through imitation, reduce overhead to increase margin, and hopefully you will gain enough market share that you can become a leader and then invest in R&D of your own. Hmmmm. I get this. And a dozen or so years ago this worked quite well in many situations.

There are several problems here. First, market leadership can be defined in by more than the single dimension of gross income. Product leadership and brand perception are two important categories that this strategy somewhat ignore. In fact there are plenty of examples that might imply those later measures have more long term significance than the current market share as measured by dollars.

On large question that looms for me is, how do you continue to motivate and attract top tier talent, when the follower's strategy appears to be here for the long term? I have to think that money is only a portion of the incentive picture here.