Fast followerhood as national strategy?

Niblettes posts his perception of China’s Innovation strategy, I’m reposting a respectable amount of it here, for his argument is intriguing enough to debate,

China has positioned itself as a fast-follower rather than a
trail-blazer — partnering with GM and hiring retired Japanese business
leaders, assimilating their industry knowledge and then going it alone.
As a fast-follower China will continue leaving the risk of innovation
to others, and then execute those innovations cheaper and faster than
the innovators can. As a strategy this makes enormous sense, and seems
to be working rather well.

Porter tells us that you cannot adopt two positions simultaneously.
So, since China has already committed to the fast-follower position,
they will by choice not innovate
.

I’m still undecided. While there are many obvious examples that support niblettes’ PoV, just take my recent post on Bajaj Auto’s dilemma – though there it goes beyond fast-follower and implies ‘family member’ – my own question is whether it’s a strategy that has been thought out and deliberated or just a position they’ve fallen into through chance and circumstance?

Further, in response to that comment of mine, niblettes adds,

Could be a little of both–I don’t know nearly enough to say.  Henry Mintzberg
would say that most strategies are more opportunistic rather than
entirely planned. Perhaps that’s what we have here with China, an
emergent strategy, the right circumstances, at the right time, and a
powerful authoritarian organization capable of ensuring alignment.

Valid observation. However, note the italicized words,

So, since China has already committed to the fast-follower position,
they will by choice not innovate
.

My instinct is to say that this thinking, while extremely rational and logical, maybe a dangerous assumption to make in corporate strategy with respect to one’s competition. There is theory and then, there is reality. China, the country, has already demonstrated in public, her commitment to innovation with her most recent 5 year plan. The government has already placed its full support behind design, innovation and all such things, in an effort to raise China’s profile beyond low cost manufacturing. If, at the same time, her industries get to pick and choose between, ‘innovator’ and ‘fast follower’, the sum of the whole implies both strategies, i.e. winner takes all.

That is one of the biggest pitfalls with management theory, the methods and frameworks available and taught (witness the recent textbook example of BCG) are assumed to be models of the real world, i.e. how people think and behave.

But…

And that is the biggest but, is that the assumption made is that peoples across cultures think and behave the same way. While there is much I want to pontificate on in this regard, I’ll follow up with more topic specific posts, here, I’ll just add one particularly relevant snippet that I believe has much to add to the debate on strategy and countries,

Time can be thought of as a straight line or as a circle: the linear, sequential march of days and years, or the rotation of the seasons. Our cultural orientation has a profound effect on our daily lives and business functions. As Edward and Mildred Hall have noted, "It is impossible to know how many millions of dollars have been lost in international business because monochronic and polychronic people do not understand each other or even realize that two such different time systems exist" (Hall & Hall, 1989, p. 16).

Monochronic time is one-track linear: people do one thing at a time. Polychronic time is multi-track circular; it allows many things to happen simultaneously, with no particular end in sight. Monochronic time is tightly compartmentalized: schedules are almost sacred. Polychronic time is open-ended: completing the task or communication is more important than adhering to a schedule.

China is generally held to be a polychronic culture. In fact, this is a subject that came up recently in my conversations – because of cultural differences in the way the concept of time is approached, it impacts the way business is conducted, purchases are made, even products are evaluated. Cross cultural research, in conjunction with user observation becomes more and more important as we look at markets away from our home markets, regardless of our point of origin.

More on that later, right now, I’d just like to point out that when a culture has the concept that ‘time is money’ its approach to the business is conducted, its approach to corporate strategy and the formulation thereof, are all going to be influenced by its approach to time. And those are the roots – not time, but the differences in value, note Tom Guariello’s excellent observation that value is deeply contextual – of the dangers of making assumptions on the strategies of your competitors without understanding the influences of your differing cultural value systems.

More on this until you’re sick of it 🙂 feels like an obsession coming on.

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4 Responses to Fast followerhood as national strategy?

  1. niblettes says:

    Well I had a rather lengthy response. But then rereading everything I noticed something. You characterized my thoughts as logical and rational, but then implied they were divorced from reality.
    That raised my expectation that you might inject a little reality—because I fully admit to often being a bit too theoretical, I don’t have a lot of experience with China directly and I’m not afraid of being corrected.
    However the reality never came. You glancingly referred to China demonstrating a commitment to innovation without specifying it or the reality of its results. Well Ford has also proclaimed its commitment to innovation, and the reality there is nothing more than press releases.
    You then curiously went even more theoretical than me, introducing cultural perceptions of time (I’m resisting countering the application of those theories with literary theories of America’s penchant for circular story arcs and interpretive polymorphism—ha! I see your monochronism, and raise you a polymorphism!).
    So I’m not sure how you’ve shown the disconnect between my theory and reality. The reality I still see is that China is doing quite nicely as a fast-follower, and there is no compelling reason for them to rock that boat. Perhaps they didn’t start off with the fast-follower strategy, but I’m sure they have by now recognized that fast-following is what their customers are paying them heaps of money for, and optimizing for that strategy means even more money.

  2. niti bhan says:

    I’ll make clarifications and changes, not referring to your theory per se, but to Porter’s theory and others of that category – biz strategy theory

  3. niti bhan says:

    I’ll see your polymorphism, btw, and raise you a categorical imperative

  4. niblettes says:

    I love high-stakes abstract poker! Call.
    (ps. the thought of henry mintzberg and micheal porter in a celebrity deathmatch totally cracks me up. I gotta get out more.)

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