Tag Archives: “Blue Ocean Strategy”

“Blue” Ocean Strategy? – How About a “Two” Ocean Strategy

It’s been a while since we visited the excellent book, Blue Ocean Strategy: How to Create Uncontested Market Space and make the Competition Irrelevant by W. Chan Kim and Renée Mauborgne.  (I blogged about it here).  It is a superb book, one that reminds us that there is always an untouched market, a place where there is clean, blue ocean waiting for us.  Here is how the book describes the difference:

Red Ocean Strategy

Blue Ocean Strategy

Compete in existing market space Create uncontested market space
Beat the competition Make the competition irrelevant
Exploit existing demand Create and capture new demand
Make the value-cost trade-off Break the value-cost trade-off
Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost Align the whole system of a firm’s activities in pursuit of differentiation and low cost

But, as I think about this, I’ve also been thinking about these difficult days.  People are a little insecure, borderline frightened, about the state of their business.  They have to meet the needs of their current customers, very well, even as they think about that next section of the ocean that might hold the next group of customers.

Maybe it’s time to think of a two ocean strategy.

Ocean #1 – keep nurturing current customers, for additional business with them, and for referrals from them to other customers.  Flourishing in this current section of the ocean requires exceptional customer attention to those you already serve.  We all know the danger;  once we’ve “caught” a customer, we can begin to take that customer for granted, and turn our attention to the next possible customer.

And in this environment, we cannot afford to lose a single existing customer.

So, serve the customers you have now very, very well.

Ocean #2 – keep going after new customers, maybe far afeild from where you normally look; maybe in that blue ocean space.  If you are confident that you offer a good, needed, product, then ask:  “who else needs this?”  Identify that “untouched/unfished” section of the ocean, and go to work.

I think, in this era, we all need as many customers as we can find.  And that requires fishing in more than one section of the ocean – almost at the same time.

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To purchase my synopsis of the book Blue Ocean Strategy, with audio + handout, go to our companion web site, 15minutebusinessbooks.com.

 

 

The First Friday Book Synopsis – a Blue Ocean Strategy in a World of Competing Book Clubs

The phrase “book club” is thrown around a lot.  And I am learning it has a number of different meanings.

For example, there are two different “TED” book clubs.  One is for the people who attend the actual, original TED conference.  They each receive a stack of books periodically.  They are then left to their own devices, to read them as they wish.  This is version one of the TED book club.  The other TED book club is a local event, here in Dallas called the TEDxSMU Book Club Meet Up.  People who attend are asked to read (expected to read!) one book before the gathering.  For the gathering in April, the book will be This Will Change Everything by John Brockman.  This is a wonderful, good, challenging book club.  “Everyone read in advance, and let’s discuss the implications of the book” is the agenda.

I remember back in my full time ministry days, I started a book club.  It was a hand-picked, small group of “young/future leaders.”  I gave them each a copy of the book I selected.  They each had to read the book.  Then, each person had to “present” one chapter of the book to the group, and lead a discussion.  It was a very workable, terrific approach.  It went really well.
For the first book.
By the end of the run (about the sixth book), I got the distinct impression that the only person really reading the material was the person reading the chapter he/she was responsible for presenting.

If the TED folks actually all read the book, this will be quite an accomplishment.  They might – TED folks are highly motivated.

But here is a frequent problem for book clubs.  It is common for a CEO, or a top level leader, to convene a book club within a company or organization, give everyone a book, and ask/expect them all to read it and discuss it.  And I know, for a fact, that a high percentage of the participants in such “book clubs” actually barely skim the book before the meetings.  I’ve heard this told, in many ways, over and over again (including from many participants who admitted this to me).

The fact is that most people wish they read more books, intend to read more books, but don’t actually read many books.  I can’t find good/reliable figures on this, but one study once quoted this finding:  among the college educated men (it was a survey of men only), these men actually averaged reading only one book a year (excluding the reading of Tom Clancy or John Grisham type books).

This is what makes the First Friday Book Synopsis a blue ocean event.  It is the only book club I know of where the participants do not have to read the books/are not expected to read the books in order to participate.  Karl Krayer and I read the books for you.

Is it the same as reading the book for yourself?  No, it is not.  It is not as good, and it is better.

It is not as good, because the best way to get the most out of a good book is to read it slowly.  (There is actually a book entitled How to Read Slowly:  Reading for Comprehension by James W. Sire).  For the books that most matter to you, you really should read them slowly enough to get the most out of them, to savor them, to ponder the implications and plan ways to implement its truths and suggestions.

It is better, because you probably have not looked for a book’s thesis, major points, and transferable principles since your last college assignment.  So Karl and I will extract these from the books for you, and you get the benefits from the books without having to actually spend the time reading the books.

Yes, the First Friday Book Synopsis is a new kind of book club – the only one I know of where you do not need to read the book in order to participate.

In our busy world, I think this is a pretty good, valuable, offering.  It is a Blue Ocean book club.

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One of the books I presented at the First Friday Book Synopsis was Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim and Renée Mauborgne.  You can purchase my synopsis of Blue Ocean Strategy, with audio + handout, at our companion web site, 15minutebusinessbooks.com.

A Blue Ocean Strategy for 2010, a new year/a new decade

It’s crowded out there.  Everyone feels some form of competition breathing down their back.  In the imagery made popular by the authors of Blue Ocean Strategy, we work in too many “red oceans,” with too many people trying to reach the same customers/clients.

The solution – a blue ocean strategy.  Here are a few key quotes from the book:

Cirque du Soleil succeeded because it realized that to win in the future, companies must stop competing with each other.  The only way to beat the competition is to stop trying to beat the competition.

Blue oceans are defined by untapped market space, demand creation, and the opportunity for highly profitable growth.

In blue oceans, competition is irrelevant because the rules of the game are waiting to be set.

In increasing numbers of industries, supply exceeds demand.  The business environment in which most strategy and management approaches of the twentieth century evolved is increasingly disappearing.  As red oceans become increasingly bloody, management will need to be more concerned with blue oceans than the current cohort of managers is accustomed to.

Here’s the strategy – create new markets.  Competing for old ones is a  “yesterday” strategy.  Create your own markets in brand new territory – this is the blue ocean strategy.

• Red Ocean vs. Blue Ocean Strategy

Red Ocean Strategy Blue Ocean Strategy
Compete in existing market space Create uncontested market space
Beat the competition Make the competition irrelevant
Exploit existing demand Create and capture new demand
Make the value-cost trade-off Break the value-cost trade-off
Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost Align the whole system of a firm’s activities in pursuit of differentiation and low cost

Seldom have I felt people as ready to put the past year/the past decade behind them.  We long for a new start.  A new start – a blue ocean – for a new year and a new decade.  For the new year, I ask a simple question – what is your blue ocean strategy for 2010?

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You can purchase my synopsis of Blue Ocean Strategy, with audio + handout, at our companion web site, 15minutebusinessbooks.com.

Malcolm Gladwell is #2 on the list of the Business Top 50 Thinkers

CK Prahalad -- #1 on the list

CK Prahalad -- #1 on the list

I’ve just become aware of the current listing of the Thinkers 50 (The definitive listing of the world’s top 50 business thinkers), which lists the most influential business thinkers by ranked order of importance and influence, based on 10 measures:

The Measures:

1. Originality of Ideas:  Are the ideas and examples used by the thinker original?
2. Practicality of Ideas:  Have the ideas promoted by the thinker been implemented in organizations? And, has the implementation been successful?
3. Presentation Style:  How proficient is the thinker at presenting his/her ideas orally?
4. Written Communication:  How proficient is the thinker at presenting his/her ideas in writing?
5. Loyalty of Followers:  How committed are the thinker’s disciples to spreading the message and putting it to work?
6. Business Sense:  Do they practice what they preach in their own business?
7. International Outlook:  How international are they in outlook and thinking?
8. Rigor of Research:  How well researched are their books and presentations?
9. Impact of Ideas:  Have their ideas had an impact on the way people manage or think about management?
10. Guru Factor:  The clincher: are they, for better or worse, guru material by your definition and expectation?

It is an impressive list, and one that I think most of our readers will agree with.  Among the authors in the top 20 that we have chosen for presentations at the First Friday Book Synopsis are:

Malcolm Gladwell -- #2 on the list

Malcolm Gladwell -- #2 on the list

Malcolm Gladwell (#2), W Chan Kim and Renee Mauborgnew (#5), Bill Gates (#7), Gary Hamel (#10), Ram Charan (#13), Marshall Goldsmith (# 14), Jim Collins (#17), Tom Peters (#19), and Jack Welch (#20).

The #1 Thinker is CK Prahalad, the author of the book:  The Fortune at the Bottom of the Pyramid:  Eradicating Poverty through Profits.  This book is one that I am aware of, but have not read and presented.

For a brief slideshow of the top 15, go to the Huffington Post article The Top 15 Business Thinkers: Thinkers 50.  For the complete list of the 50, click here to go the web site for the Thinkers 50.  You will find a video interview with CK Prahalad, and profiles of all of the rest on the list.

(By the way, check out the post by our blogging team member Bob Morris:  Q#147:  Who were the most influential business thinkers in the 20th century?)

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You can order our synopses for many of these books, with audio + handout, at our companion web site, 15minutebusinessbooks.com – including all three of Gladwell’s books, The Tipping Point, Blink, and Outliers, W Chan Kim and Renee Mauborgnew’s Blue Ocean Strategy, Charan’s Execution (and other titles), and Collins’ Good to Great (and soon, Collins How the Mighty Fall – we have presented it, and it will be available on the web site soon) — plus other titles by some of these leading business thinkers.

(The Woes of MySpace) The Future is Utterly Predictable — it is a Future of Constant Innovation

Boy, those old staid companies sure do get in trouble because they fail to innovate.  Yes, the times are changing, and companies better learn how to stay fresh, keep improving, keep changing.  When they’ve been around forever, it is awfully easy to get set in their ways, and watch the competition sweep right on by them.

Take that old venerable company known as MySpace.  It has been around forever.  It was way back in August, 2003 when they launched.  Times were different then.  And what they set in place back in those long-gone days just doesn’t seem to work anymore.  So the CEO Owen Van Natta, in a letter to his employees in which he announced and explained the decision to lay off 30% of their workers (400 workers), included this sober assessment:  “We need to become a more innovative company.” (read about the layoffs here, and the entire letter from the CEO here).  (Here’s a little more of his letter:  “The future success of MySpace is dependent upon us operating as a nimble and entrepreneurial company with the adaptive mentality of a start-up…  I believe this is the first difficult step toward a major turnaround – a step that will not only shore us up in the short term, but position us for long term success. We need to become a more innovative company.  Becoming more innovative is an ongoing responsibility for all of us, not a one-time effort”).

It does sound a little ludicrous, doesn’t it?  I mean, I can understand that a company as old and established as GM might get a little behind in the innovation contest.   But MySpace?  This company is only six years old.  It’s been less than six years ago that you could not have built your own MySpace page.  And yet, here it is in stark, sobering words:  “We need to become a more innovative company.”  Competitors like Facebook, and now Twitter, have just swept right on by MySpace because they are more innovative.  Who would have thought?

We should have known it was coming.  We’ve been warned.  The business books of the last 12 years have all said it, loud and clear.  The future is coming, and it’s going to be different from the past.  Constantly different.  Perpetually innovating.  The world is changing faster and faster and faster…  Here’s just a sampling of quotes:

“If it seems like your world has been topsy-turvy over the past few years…  Consider what’s coming…  Technology is not kind.  It does not wait.  It does not say please.  It slams into existing systems, and often destroys them – while creating a new system.”  (Juan Enriquez, As the Future Catches You).

“It’s finally happened.  I’ve seen a company where I can imagine working!”  Innovation is it, for the foreseeable future…”  {Tom Peters, from the foreword}.  (Tom Kelley, The Art of Innovation:  Lessons in Creativity from IDEO, America’s Leading Design Firm).

“You want to wake up your organization to the need for a strategic shift and a break from the status quo.”  (W. Chan Kim and Renée Mauborgne,  Blue Ocean Strategy:  How to Create Uncontested Market Space and make the Competition Irrelevant).

“Even the world’s “most admired” companies aren’t as adaptable as they need to be, as innovative as they need to be, or as much fun to work in as they should be…  To put it bluntly, management innovation pays…  Remember the old saw about the tendency of generals to refight the last war rather than the one at hand?”  (Gary Hamel, The Future of Management).

“The premise of this book is a simple one:  that breakthrough innovations come by recombining the people, ideas, and objects of past technologies.  The implication, recalling William Gibson, is that the future is already here – it’s just unevenly distributed.”  (Andrew Hargadon, How Breakthroughs Happen:  The Surprising Truth About How Companies Innovate).

“When it comes to thriving in a hypercompetitive marketplace, “playing it safe” is no longer playing it smart…  the more you do something, the more important it is to challenge the assumptions and habits that built your success so as to generate a wave of innovations to build the future…  Remember, the most effective leaders are the most insatiable learners. (William C. Taylor and Polly LaBarre,  Mavericks at Work:  Why the Most Original Minds in Business Win).

“To change is to take a risk – to give up a current state in an attempt to reach a potentially more desirable one.  We tend to resist change…  In this new (postmodern or post-Web corporate world) hypercompetitive environment, market transitions are a lot faster, and the cycle of innovation has gotten increasingly shorter…  new products and services started appearing more and more frequently, resulting in even more competition.  (including:  real-time information).  Reengineering found itself outdated.”  (Benham N. Tabrizi, Rapid Transformation:  A 90-Day Plan For Fast And Effective Change).

“I held only positions that did not exist before I had them…  Conceptualizers see the future.”  (Robert Greenleaf, Servant Leadership:  A Journey into the Nature of Legitimate Power and Greatness).

Everyone needs to think differently about the future, a future that is riddled with change, challenge, and risk.  It is a new kind of future, not the steady plodding of progress from one moment to the next, punctuated by brief bursts of innovation that characterizes much of history.  Now we face a post-9/11 future.  The future of our lives, of our work, of our businesses – and most of all, the future of our world – depends on us gaining a new understanding of the dizzying changes that lie ahead.  I call this future-readiness…  The coming Innovation Economy will herald an age of rapid, dramatic change, one in which ideas that create value, offer solutions, and fulfill needs will thrive, sweeping into the recesses of memory the comparatively primitive ideas, products, services, and processes that came before.  Innovation will be the prime source of productivity, prosperity, competition, and potentially even peace.  Innovation will be recognized as an empowering force that will drive individual prosperity and global competition.  (James Canton, Ph.D., CEO and Chairman, Institute for Global Futures, The Extreme Future:  The Top Ten Trends That Will Reshape the World for the Next 5, 10, and 20 Years).

“Never get comfortable with where you are.  Anticipate the inevitability of having to modify or change how you do business to meet your customers’ needs…  Organizations that refuse to change their methods to meet demands are likely the same stubborn organizations that are slowly going out of business.  Change is never over, said Jack Welch.”  (Ron Hunter Jr. & Michael E. Waddell, Toy Box Leadership:  Leadership Lessons from the Toys You Loved as a Child).

So, let’s all let the MySpace story be an object lesson for us all.  If we are not constantly innovating, the competition will simply pass us by.  Remember the warning from Gary Hamel:”  Every business is successful — until it’s not.”

(To purchase my synopses of many of the books quoted, with handout + audio, go to our 15 Minute Business Book site).