Creating Blue Oceans

If carmakers could defy conventional wisdom

For our second example of Defying Conventional Wisdom, we consider what if the much troubled automakers had the courage to re-think their very business model.   From a recent BusinessWeek article entitled “Detroit Should Get Cracking on it’s Googlemobile”:

If Google (GOOG) ran a car company, what would it look like? What lessons of Google's singular success in the Internet age might apply to remaking this, among other failing industries? Would the Googlemobile be the product of stealth and secrecy or openness and collaboration? Could Detroit release cars in beta? Could cars be ad-supported and free? Is there any hope for an industry that traffics in atoms instead of digits? Would a Googley car company even make cars?

A few years ago, it might have been absurd to look to Google for ideas about the auto industry. But not now, American automakers are in crisis. General Motors (GM) and Chrysler needed a $13 billion bailout from the federal government in December to keep them out of bankruptcy, and, with a new Administration in Washington, the Big Three are likely to head back to the well for billions more. They're suffering from more than the economic crisis. The huge declines in sales reflect a fundamental disconnect between drivers and Detroit. It's time for a radical rethinking of the way U.S. automakers do business.

[Image via Google.]

Departing from Conventional Wisdom

Companies today, facing an environment of great uncertainty, need to embrace the idea of challenging traditional industry assumptions.  This perspective of defying conventional wisdom goes hand-in-hand with the process of Blue Ocean Strategy, which is a systematic approach to turning unconventional ideas into winning strategies.   This week, to provide some inspiration, we feature two examples of Defying Conventional Wisdom. 

For our first example, we turn to the Aeroscraft, a large air ship (think of a flying Queen Mary II).  Contrary to conventional wisdom of the air travel industry, the Aeroscraft has been designed for passengers who are more concerned with the journey than the destination. 

From Flight Information Technology:

It's the Aeroscraft, and when it's completed, it will ferry pampered passengers across continents and oceans as they stroll leisurely about the one-acre cabin, or relax in their staterooms. Unlike its dirigible ancestors, the Aeroscraft is not lighter than air. It's 14 million cubic feet of helium hoist only two-thirds of the craft's weight. The rigid and surprisingly aerodynamic body, driven by huge rear-ward propellers, generates enough additional lift to keep the behemoth and its 400-ton payload aloft while cruising.

During takeoff and landing, six turbo-fan jet engines push the ship up or ease its descent. This two-football-fields-long airship is the brainchild of Igor Pasternak, whose privately-funded California firm, Worldwide Aeros Corporation, is in the early stages of developing a prototype and expects to have one completed by 2010.

[Image via Worldwide Aeros Corporation.]

Global Crisis – The Comic Angle: Prayers and shopping

No matter where one turns these days, it seems nearly impossible to escape the news of the latest company or industry to unravel.  So to challenge the status quo of doom and gloom,  and to inject a layer of much needed levity, our new series presents satirical articles of different industries in crisis.  This week, we turn to two short bulletins from “Sign of the times” at Reuters.

From Reuters:

Prayer on being made redundant
The Church of England published two new prayers, comforting people who lost their jobs and those still in work after a round of cuts. "Hear me as I cry out in confusion, help me to think clearly, and calm my soul," says the "Prayer on being made redundant." The "Prayer for those remaining in the workplace" focuses on guilt and increased workload: "In the midst of this uncertainty, help me to keep going: to work to the best of my ability, taking each day at a time."

Shop, Damn It, SHOP
The crisis has brought a disastrous holiday season for many retailers, who depend on the frenzy to buy Christmas presents to push them into the black for the year. For its window display, a shop in London adapted a classic World War One recruiting poster in which a steely-eyed mustachioed general points at passers-by above the words "Your Country Needs You." The new admonishment is: "Shop, Damn It, SHOP."

[Image via Reuters.]

Radical Times Require Radical Action – watch this influential webcast

To counter the rampant fear and panic in the business world, Gabor was invited to join in a discussion of “positive” alternatives during the SAS Better Management Series webcast, entitled ‘Radical Times Require Radical Action.’  The third in a four-part series, this webcast was designed to share ideas and perspectives that will allow organizations not just to survive but to thrive in the current environment.

Moderated by Jonathan Hornby, Director of SAS’ Worldwide Marketing, distinguished panelists include:

Gabor George Burt, thought leader and internationally recognized expert on Blue Ocean Strategy, Value Innovation and Defying Conventional Wisdom.

Kevin Freiberg, co-author of BOOM! 7 Choices for Blowing the Doors Off Business as Usual on how ordinary people can achieve extraordinary results.

Geoffrey Moore, author of Dealing with Darwin, on the innovation life cycle and need to align and recycle resources for maximum value.

You can view the SAS Webinar ‘Radical Times Require Radical Action’ here. 

Unilever: Turning Laundry Blue

We recently came across an article about a dirty topic — laundry detergent — which helps illustrate a core principle of Blue Ocean Strategy:  The simultaneous pursuit of differentiation and lower cost.  It seems that soapmakers’ bubble was just about to burst with customers demanding more environmentally friendly products, but without wanting to pay more for them.   

That’s when Unilever challenged its scientists to develop a detergent that uses fewer resources and less packaging, but with greener materials – consistent with the Four Actions Framework approach of Blue Ocean Strategy.

From BusinessWeek:

When Unilever (UN) challenged its scientists to come up with a detergent that uses fewer resources, greener materials, and less packaging, few thought it was possible. Yet Small & Mighty, the industry's first super-concentrated liquid detergent, launched in October 2005 in a partnership with U.S. retailer Wal-Mart Stores (WMT), 18 months ahead of rivals such as Procter & Gamble (PG). What started as a means to boost Unilever's green credentials now is opening up avenues of innovation that are helping to drive growth in the company's once-lackluster laundry unit. Since rolling out Small & Mighty in Europe in January 2007, more than 30 million bottles have been sold.

The virtue of the product is that consumers can wash the same amount of laundry with one-third the detergent. Smaller packaging means each bottle uses 55% less plastic, enabling retailers to stock three times the number of bottles in the same space, saving on labor and out-of-stock costs. There's big savings for Unilever, too, in manufacturing and transportation. The company says it saves 500 million gallons of water and 150 million pounds of plastic each year. And the smaller bottle means Unilever can transport three times as much product in every truck, saving 26 million gallons of diesel each year. "It's a good example of how good environmental practice is good for the company's bottom line," says Keith Weed, Unilever's group vice-president for home care.

[Image via adamantine.]

Global Crisis – The Comic Angle: Discount shops & Nightclubs

No matter where one turns these days, it seems nearly impossible to escape the news of the latest company or industry to unravel.  So to challenge the status quo of doom and gloom,  and to inject a layer of much needed levity, our new series presents satirical articles of different industries in crisis.  This week, we turn to two short bulletins from “Sign of the times” at Reuters.

From Reuters:

Every last pence counts in red oceans
In a southern England town families hit by the financial crisis put a pound store out of business by flocking to a 99 pence shop that opened across the road. The Pound World in Poole saw its earnings plummet by 70 percent and was forced to close within weeks of 99p Stores launching on the other side of the High Street. "It's funny to think a shop can close down because of a penny difference, I suppose it's a sign of the times," customer David Fitzpatrick told The Star newspaper. 

Proof of unemployment
The Delancey bar and nightclub in New York City's Manhattan has designated a special night out: "Laid off Mondays." It offers two-for-one drinks all night and a free shot of tequila at midnight "for everyone with proof of unemployment." 

[Image via Reuters.]