Creating Blue Oceans

Blue Ocean Strategy: The first ‘E’ of Fair Process

As our Blue Ocean Strategy Basics series continues, we highlight building execution into strategy and the three E Principles of Fair Process.  Once featured, each  principle is made accessible through the Blue Ocean Strategy Basics archive.  For an introduction to the first ‘E’ Principle of Fair Process, we turn to page 175 of the book Blue Ocean Strategy (co-authored by Professor W. Chan Kim and Professor Renée Mauborgne).

There are three mutually reinforcing elements that define fair process: engagement, explanation, and clarity of expectation. Whether people are senior executives or shop floor employees, they all look to these elements. We call them the three E principles of fair process. 

Engagement means involving individuals in the strategic decisions that affect them by asking for their input and allowing them to refute the merits of one another’s ideas and assumptions. Engagement communicates management’s respect for individuals and their ideas. Encouraging refutation sharpens everyone’s thinking and builds better collective wisdom. Engagement results in better strategic decisions by management and greater commitment from all involved to execute those decisions.

Related links:

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[Image via Flickr.]

 

Engaging male shoppers, the Avon way

What is the  common link among all the companies that are successful in creating Blue Oceans?  The  answer can be distilled down to two words: Lifestyle enrichment.  Companies that understand that they are not in the business of selling certain products or services, but rather in the business of delivering lifestyle enrichment to customers, are the ones that prosper.  Blue Ocean Strategy helps to instill this perspective, and once it takes root, a company can continue to stay highly relevant to customers, drive lifestyle changes, and continuously create blue oceans.

For our example today, we highlight the story of Dallas shirtmaker J. Hilburn, which borrows techniques from the likes of Avon and Dell, not just to sell custom-tailored dress shirts for men, but as a way of creating life- and work-style enrichment.   

From BusinessWeek:

You can't buy Dallas clothier J. Hilburn's shirts in a retail store or online. Nonetheless, the company expects to sell 60,000 of them this year by dispatching salespeople to customers' homes or offices to take measurements and suggest fabrics and styles. They send their orders to a factory near Macau, China, where shirts are cut and sewn from Italian fabric. Buyers receive them in two to three weeks and pay between $80 and $150, less than half the price of similar shirts sold in some high-end stores.

The company is the brainchild of a couple of former finance types who set out to serve men who see shopping as a chore. "No one's really thought about how to engage male shoppers," says Veeral Rathod, 31, one of the founders. Rathod and co-founder Hil Davis (the company took its moniker from his full name, J. Hilburn Davis IV) have borrowed from the direct-sales model of Avon Products, the supply chain management of Toyota Motor, customization techniques pioneered by Dell, and Amazon.com's ease of shopping.

[Image via Flickr.]

 

Blue Ocean Strategy: Knock over the polictical hurdle

Our Blue Ocean Strategy Basics series continues to highlight Tipping Point Leadership and the Four Organizational Hurdles to Strategy Execution.  Once featured, each article is accessible through the Blue Ocean Strategy Basics archive.  For our current entry we turn to pages 165 – 166 of the book Blue Ocean Strategy (co-authored by Professor W. Chan Kim and Professor Renée Mauborgne).

Youth and skill will win out every time over age and treachery. True or false? False. Even the best and brightest are regularly eaten alive by politics, intrigue, and plotting. Organizational politics is an inescapable reality of corporate and public life. Even if an organization has reached the tipping point of execution, there exist powerful vested interests that will resist the impending changes. The more likely change becomes, the more fiercely and vocally these negative influencers — both internal and external — will fight to protect their positions, and their resistance can seriously damage and even derail the strategy execution process.

To overcome these political forces, tipping point leaders focus on three disproportionate influence factors: leveraging angels, silencing devils, and getting a consigliere on their top management team. Angels are those who have the most to gain from the strategic shift. Devils are those who have the most to lose from it. And a consigliere is a politically adept but highly respected insider who knows in advance all the land mines, including who will fight you and who will support you.

Related links:

Buy the Blue Ocean Strategy book

[Image via Flickr.]

 

Dave Stewart, our Slingshot Living featured visionary

TUNE IN as we kick off a new series of inspiring and playful talks with Featured Visionaries on Slingshot Living.  Joining us today is Dave Stewart, legendary musician (does ‘Eurythmics’ ring a bell?), multi-media entrepreneur, author of Business Playground, one of the 100 most creative people in business and also the maker of a mean vodka martini.  Need we say more?  Tune in for part 1 of our segment with Dave, and find out the answer to the all important question:

Why is continuous play the fountain of youth and success ?

What if you could re-imagine your business, and your life?  SLINGSHOT is the first book-based journey addressing this very topic and to unfold on all media channels closest to you. With Gabor as your host, SLINGSHOT appears through national radio and online TV shows, downloadable text, live events, printed article series, accompanying illustrations and music. 

Watch, listen, play, join fascinating personalities and apply concepts yourself that are helping to shape the world through meaningful creativity and innovation.

 

Amazon’s next frontier: Becoming Santa Claus

What is the  common link among all the companies that are successful in creating Blue Oceans?  The  answer can be distilled down to two words: Lifestyle enrichment.  Companies that understand that they are not in the business of selling certain products or services, but rather in the business of delivering lifestyle enrichment to customers, are the ones that prosper.  Blue Ocean Strategy helps to instill this perspective, and once it takes root, a company can continue to stay highly relevant to customers, drive lifestyle changes, and continuously create blue oceans.

Take, for example, well-known online retailer Amazon, and its quest to seek new lifestyle enrichment spaces. 

From the Associated Press:

For some, it's the red reindeer Christmas sweater. For others, it's the diamond-encrusted dreidel. Whatever your worst gift nightmare might be, Amazon may soon give you a reason to cheer.

Amazon.com Inc., the source of many presents good, bad or ugly, has patented a system that would let people exchange unwanted gifts for those they actually want — even before they get them.

For now, though, it's just an idea, so until Amazon figures out how to implement it, you may be stuck with that itchy sweater from Grandma, even if she bought it online.

[Image via Flickr.]

 

Blue Ocean Strategy: Jump the motivational hurdle

Our Blue Ocean Strategy Basics series continues to highlight Tipping Point Leadership and the Four Organizational Hurdles to Strategy Execution.  Once featured, each article is accessible through the Blue Ocean Strategy Basics archive.  For our current entry we turn to pages 156 – 157 of the book Blue Ocean Strategy (co-authored by Professor W. Chan Kim and Professor Renée Mauborgne).

To reach your organization’s tipping point and execute blue ocean strategy, you must alert employees to the need for a strategic shift and identify how it can be achieved with limited resources. For a new strategy to become a movement, people must not only recognize what needs to be done, but they must also act on that insight in a sustained and meaningful way.

How can you motivate the mass of employees fast and at low cost? When most business leaders want to break from the status quo and transform their organizations, they issue grand strategic visions and turn to massive top-down mobilization initiatives. They act on the assumption that to create massive reactions, proportionate massive actions are required. But this is often a cumbersome, expensive, and time-consuming process, given the wide variety of motivational needs in most large companies. And overarching strategic visions often inspire lip service instead of the intended action. It would be easier to turn an aircraft carrier around in a bathtub.

Or is there another way? Instead of diffusing change efforts widely, tipping point leaders follow a reverse course and seek massive concentration. They focus on three factors of disproportionate influence in motivating employees, what we call kingpins, fishbowl management, and atomization. 

Related links:

Buy the Blue Ocean Strategy book

 

Perfect Calm Series: A new microlending fund for women entrepreneurs

One of the most exciting spheres of application for Blue Ocean Strategy is the realm of Social Capitalism. This explosive market space is at the intersection of successful business and lasting social impact. Traditionally these two spheres were considered separate, but the two can be pursued simultaneously via Blue Ocean Strategy. Periodically, we feature stories which illustrate stimulating ventures, ideas and concepts targeting this very market space.

This week we select the story: A new microlending fund for women entrepreneurs

Do you know of other companies, organizations or business visionaries sailing along the intersection of good business and social good? Share your ideas with the Creating Blue Oceans Community.

[Image via Google Images.]

 

Blue Ocean Strategy: Jump the resource hurdle

Our Blue Ocean Strategy Basics series continues to highlight Tipping Point Leadership and the Four Organizational Hurdles to Strategy Execution.  Once featured, each article is accessible through the Blue Ocean Strategy Basics .  For our current entry we turn to pages 156 – 157 of the book Blue Ocean Strategy (co-authored by Professor W. Chan Kim and Professor Renée Mauborgne).

How do you get an organization to execute a strategic shift with fewer resources? Instead of focusing on getting more resources, tipping point leaders concentrate on multiplying the value of the resources they have. When it comes to scarce resources, there are three factors of disproportionate influence that executives can leverage to dramatically free resources, on the one hand, and multiply the value of resources, on the other. These are hot spots, cold spots, and horse trading.

Hot spots are activities that have low resource input but high potential performance gains. In contrast, cold spots are activities that have high resource input but low performance impact. In every organization, hot spots and cold spots typically abound. Horse trading involves trading your unit’s excess resources in one area for another unit’s excess resources to fill remaining resource gaps. By learning to use their current resources right, companies often find they can tip the resource hurdle outright.

What actions consume your greatest resources but have scant performance impact? Conversely, what activities have the greatest performance impact but are resource starved? When the questions are framed in this way, organizations rapidly gain insight into freeing up low-return resources and redirecting them to high-impact areas. In this way, both lower costs and higher value are simultaneously pursued and achieved.

Related links:

Buy the Blue Ocean Strategy book

[Image via Flickr.]

 

Jeffrey Hayzlett, our next Slingshot Living featured visionary

TUNE IN as we kick off a new series of inspiring and playful talks with Featured Visionaries on Slingshot Living.  Joining us today is Jeffrey Hayzlett, celebrity CMO, former Chief Marketing Officer of Eastman Kodak, best-selling author and widely recognized as one of the most influential marketers of our time.  Tune in and find out the answer to the all important question: 

Why does the celebrity CMO think that you must look in the mirror?

What if you could re-imagine your business, and your life?  SLINGSHOT is the first book-based journey addressing this very topic and to unfold on all media channels closest to you. With Gabor as your host, SLINGSHOT appears through national radio and online TV shows, downloadable text, live events, printed article series, accompanying illustrations and music. 

Watch, listen, play, join fascinating personalities and apply concepts yourself that are helping to shape the world through meaningful creativity and innovation.

 

I want my MTV, but without the music!

It’s the stuff urban legends are made of.  It’s what happens when companies embrace the idea of challenging traditional industry assumptions and continuously think of how to re-invent their business for higher consumer relevance. Last year MTV cut ties with its original core business by scrapping music videos from its lineup and the term ‘music television’ from its logo - and achieved its biggest ratings gain in a decade.

How are you going to re-imagine your business in 2011?

Via PR Newswire:

MTV, a division of Viacom Inc., concluded 2010 with a 16% year-over-year ratings gain (P12-34), the network's largest annual increase since 1999, and with its fourth consecutive quarter of growth.  For the final quarter of 2010, MTV's ratings grew 24% over the same period last year as the network posted gains across all key day parts.

The year-long ratings gains were fueled by MTV's diverse programming slate of hit reality series, new scripted comedy and live award telecasts.  Excluding sports, MTV nabbed all 20 of the top 20 cable telecasts of the year among P12-34, topped by the "2010 Video Music Awards." Further, MTV secured eight of the top 20 original cable series of the year, including the top two spots with "Jersey Shore" (#1) and "Teen Mom" (#2).  In addition, MTV's sibling network MTV2, which has the highest concentration of young males on TV, had its best year ever, up 4% over 2009.  

MTV's dramatic growth extended to the online space.  With more than 57 million unique visitors according to comScore Media Metrix numbers (November 2010), the MTV Music Group experienced 200% year-over-year growth, making it the #1 destination for music.  

 

[Image via DesignBoom.]