Blue Ocean Strategy-From Where Does the Inspiration Come
What is Blue Ocean Strategy?
Chan Kim and Renee Mauborgne of INSEAD came up with the concept of Blue Ocean. The concept was formulated based on a study of 150 strategic moves spanning more than 100 years and over thirty different industries and it provides a systematic approach to make the competition irrelevant and create uncontested market space.
The red ocean has a defined market, defined competitors and the traditional way of doing business by using offense strategies with competition and defending against competition at times. It is similar to an ocean infested with sharks which are fighting for the same prey. The blue ocean is calm and has lot of food with little competition. Some organizations which are known for creating blue ocean include, Southwest Airlines, Cirque du Soleil, Casella Wine, Nintendo (Wii), Cemex Cement, and The Body Shop
How is Blue Ocean connected with Spirituality?
Some principles which are common to both Blue Ocean and Spirituality include
· Both philosophies believe that all things are possible; the barriers exist in our mind. All paths are accepted as valid until disqualified by practical application or an open-minded attitude
· Both believe in trying out untried and unique approaches. In Blue Ocean it is unique approach to market, in spirituality it is the unique approach of surrender and detachment. Both talk of crossing the conventional boundaries. While spirituality talks of merging one’s consciousness with supreme consciousness as the ultimate goal, Blue Ocean lists six conventional boundaries of competition (viz industry, strategic group, buyer group, scope of product or service offering, functional-emotional orientation of an industry and time.) which need to be crossed.
· Both believe in breaking the mental blocks. Blue Ocean Strategy is based on the premise that market boundaries and industry structure are very much alterable by our actions and beliefs. The market boundaries exist only in managers’ minds; believers of Blue Ocean do not let existing market structures limit their decisions and thinking. A paradigm mental shift from supply to demand is required; our goals can be easily achieved through the creation of innovative value to unlock new demand.
· Spirituality encourages holistic living, maintaining a fine balance in different aspects of life with the planet. Blue ocean strategy integrates and aligns the three strategy propositions; value proposition, profit proposition and people proposition.
· Both emphasize on fairness and ethics and respect the individual. Spirituality respects the individual soul while Blue Ocean’s engagement principle of fair process communicates management’s respect of individuals and their ideas.
· Though both talk of integration and holistic approach, yet both have a focus point which is of prime importance. In spirituality it is the soul and raising the level of consciousness is the prime goal. In Blue Ocean (tipping point leadership), leaders focuses on transforming the people, acts, and activities that exercise a disproportionate influence on performance. Spirituality transforms the soul and Blue Ocean changes the core to execute the strategy.
· Both talk of angelic and devilish forces. In Blue ocean strategy, devils are people who are likely to fight the execution of a Blue Ocean Strategy. Once identified, devils need to be isolated. Tipping point leaders build a group of supporters (angels) around them to discourage the detractors.
· Both talk of adoption hurdles. In Blue Ocean, adoption Hurdles are the forces that can block one from executing a Blue Ocean Strategy. These forces may come from employees, business partners, or even the general public. A spiritual seeker also faces hurdles of various kinds including family, relatives and general public. Both encourage addressing these fears before implementation which can be done by engaging in open discussion.
· Both encourage transparency. Blue Ocean uses fishbowl management, whereby the activities of the key influencers are made transparent for all to see, as fish in a fishbowl. It highlights both, who are lagging behind and those who are excelling. For fishbowl management to work, it must be based on transparency, inclusion, and fair process.
· Both talk of awakening and exploration. Visual Awakening / Visual Exploration / Visual Strategy Fair / Visual Communication are the four steps of the Blue Ocean Strategy methodology. Spirituality also talks of awakening, and travelling the path of exploration thereafter.
· Both talk of leaps in growth. While spirituality talks of leap in consciousness, Blue Ocean (Buyers Utility Map) talks of a leap in value to buyers.
· Both are based on radical concepts and can bring radical shifts and benefits. According to Blue Ocean, “One should stop benchmarking the competition. The more one benchmarks the competitor, the more one looks like them.” Both are difficult to execute compared to other options.
Tenets of Blue Ocean
Dr Sarah Layton, Corporate Strategy Institute highlights the six tenets of Blue Ocean viz.
1. Focus on existing customer vs focus on non-customer-In blue ocean strategy an attempt is made to attract customers who have never purchased rather than taking away competitors’ customers.
2. Compete in existing markets vs create uncontested markets to serve-In blue ocean, no one is fighting with you for customers because either they don’t know about it or don’t know how to.
3. Beat the competition vs make the competition irrelevant-Blue ocean is about high value at low cost, which makes it very difficult for anyone to compete with you.
4. Exploit existing demand vs capture new demand-The demand is created by the blue ocean strategist for example the Walkman created by Sony.
5. Make the value cost tradeoff vs Break the value cost tradeoff- Kim and Mauborgne said that you can have high value and low cost and developed the tools to do it. In fact, unless you break the value cost tradeoff, competitors will easily duplicate what you are doing and the ocean will be red again.
6. Align the organization with differentiation or low cost vs align the organization with differentiation and low cost-The blue ocean strategist must search every nook and corner of processes and organization to cut down unnecessary cost, in fact the entire organization has to be aligned this way.
As one jumps deeper into the Blue Ocean, it seems clearly inspired by the principles of spirituality. Are you ready with your swimgear?
Dr Amit Nagpal
amitknagpal@gmail.com
You can also read the article on Page 13-14.
Chan Kim and Renee Mauborgne of INSEAD came up with the concept of Blue Ocean. The concept was formulated based on a study of 150 strategic moves spanning more than 100 years and over thirty different industries and it provides a systematic approach to make the competition irrelevant and create uncontested market space.The red ocean has a defined market, defined competitors and the traditional way of doing business by using offense strategies with competition and defending against competition at times. It is similar to an ocean infested with sharks which are fighting for the same prey. The blue ocean is calm and has lot of food with little competition. Some organizations which are known for creating blue ocean include, Southwest Airlines, Cirque du Soleil, Casella Wine, Nintendo (Wii), Cemex Cement, and The Body Shop
How is Blue Ocean connected with Spirituality?
Some principles which are common to both Blue Ocean and Spirituality include
· Both philosophies believe that all things are possible; the barriers exist in our mind. All paths are accepted as valid until disqualified by practical application or an open-minded attitude
· Both believe in trying out untried and unique approaches. In Blue Ocean it is unique approach to market, in spirituality it is the unique approach of surrender and detachment. Both talk of crossing the conventional boundaries. While spirituality talks of merging one’s consciousness with supreme consciousness as the ultimate goal, Blue Ocean lists six conventional boundaries of competition (viz industry, strategic group, buyer group, scope of product or service offering, functional-emotional orientation of an industry and time.) which need to be crossed.
· Both believe in breaking the mental blocks. Blue Ocean Strategy is based on the premise that market boundaries and industry structure are very much alterable by our actions and beliefs. The market boundaries exist only in managers’ minds; believers of Blue Ocean do not let existing market structures limit their decisions and thinking. A paradigm mental shift from supply to demand is required; our goals can be easily achieved through the creation of innovative value to unlock new demand.
· Spirituality encourages holistic living, maintaining a fine balance in different aspects of life with the planet. Blue ocean strategy integrates and aligns the three strategy propositions; value proposition, profit proposition and people proposition.
· Both emphasize on fairness and ethics and respect the individual. Spirituality respects the individual soul while Blue Ocean’s engagement principle of fair process communicates management’s respect of individuals and their ideas.
· Though both talk of integration and holistic approach, yet both have a focus point which is of prime importance. In spirituality it is the soul and raising the level of consciousness is the prime goal. In Blue Ocean (tipping point leadership), leaders focuses on transforming the people, acts, and activities that exercise a disproportionate influence on performance. Spirituality transforms the soul and Blue Ocean changes the core to execute the strategy.
· Both talk of angelic and devilish forces. In Blue ocean strategy, devils are people who are likely to fight the execution of a Blue Ocean Strategy. Once identified, devils need to be isolated. Tipping point leaders build a group of supporters (angels) around them to discourage the detractors.
· Both talk of adoption hurdles. In Blue Ocean, adoption Hurdles are the forces that can block one from executing a Blue Ocean Strategy. These forces may come from employees, business partners, or even the general public. A spiritual seeker also faces hurdles of various kinds including family, relatives and general public. Both encourage addressing these fears before implementation which can be done by engaging in open discussion.
· Both encourage transparency. Blue Ocean uses fishbowl management, whereby the activities of the key influencers are made transparent for all to see, as fish in a fishbowl. It highlights both, who are lagging behind and those who are excelling. For fishbowl management to work, it must be based on transparency, inclusion, and fair process.
· Both talk of awakening and exploration. Visual Awakening / Visual Exploration / Visual Strategy Fair / Visual Communication are the four steps of the Blue Ocean Strategy methodology. Spirituality also talks of awakening, and travelling the path of exploration thereafter.
· Both talk of leaps in growth. While spirituality talks of leap in consciousness, Blue Ocean (Buyers Utility Map) talks of a leap in value to buyers.
· Both are based on radical concepts and can bring radical shifts and benefits. According to Blue Ocean, “One should stop benchmarking the competition. The more one benchmarks the competitor, the more one looks like them.” Both are difficult to execute compared to other options.
Tenets of Blue Ocean
Dr Sarah Layton, Corporate Strategy Institute highlights the six tenets of Blue Ocean viz.
1. Focus on existing customer vs focus on non-customer-In blue ocean strategy an attempt is made to attract customers who have never purchased rather than taking away competitors’ customers.
2. Compete in existing markets vs create uncontested markets to serve-In blue ocean, no one is fighting with you for customers because either they don’t know about it or don’t know how to.
3. Beat the competition vs make the competition irrelevant-Blue ocean is about high value at low cost, which makes it very difficult for anyone to compete with you.
4. Exploit existing demand vs capture new demand-The demand is created by the blue ocean strategist for example the Walkman created by Sony.
5. Make the value cost tradeoff vs Break the value cost tradeoff- Kim and Mauborgne said that you can have high value and low cost and developed the tools to do it. In fact, unless you break the value cost tradeoff, competitors will easily duplicate what you are doing and the ocean will be red again.
6. Align the organization with differentiation or low cost vs align the organization with differentiation and low cost-The blue ocean strategist must search every nook and corner of processes and organization to cut down unnecessary cost, in fact the entire organization has to be aligned this way.
As one jumps deeper into the Blue Ocean, it seems clearly inspired by the principles of spirituality. Are you ready with your swimgear?
Dr Amit Nagpal
amitknagpal@gmail.com
You can also read the article on Page 13-14.
(I express my deep gratitude to my mentor Sensei Ikeda & Bharat Soka Gakkai, for the mentorship and inspiration.)
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