Blue Ocean Strategy®: It works when you work it but not when you don’t
I was speaking with someone recently who works for a ski resort that had wanted to find a Blue Ocean Strategy several years ago. Skiing and snowboarding were not growing, and mountains—whether they were destinations or weekend retreats—needed to find more nonusers to enjoy the experience.
Unfortunately, their Blue Ocean Strategy had not taken them very far so they abandoned it. While disappointing, this was not unfamiliar.
At SAMC, we often work with companies that need or want to change and that think, perhaps, they too can be a Blue Ocean success story. What we find is that they can, but it requires a combination of a crisis, a willingness to make the unfamiliar familiar and a Blue-Ocean style tool kit that can provide process and comfort to the unknown.
Microsoft vs. Apple: A leak ended a promising new product that might have dominated the market
The fact that this ski area had not succeeded was disheartening. What might they have done differently to find and implement a Blue Ocean Strategy?
In a recent HBR Blog, “Getting People to Believe in Something They Can’t Yet Imagine,” Lee Miller, Managing Director of Advanced Human Resources LLC and Kathleen Hayes Onieal, co-founder of Helix Innovation Network, tell a story about Microsoft and its early development of its “Courier” tablet that could have easily outdone Apple’s iPad.
In development and well under the radar, the product was coming along impressively until a leak to the press changed everything. Rather than a low-profile test market concept, it became a complete Microsoft-wide scramble to see who could get their hands on it.
Finally CEO Steve Ballmer shut down the entire effort, deciding to focus on current product lines instead of innovative new ones. Hard not to wonder what Microsoft thought when the Apple iPad came out and took over the market—instead of theirs.
The brain most often reverts to the safe, even when that leads to business failure
In order to better understand how business leaders bring the new and innovative to markets in spite of forces that challenge the new and question the unknown, Miller and Onieal conducted research among a wide range of CEOs.
The four recurring themes that emerged were:
- Stay under the radar
- Create demonstration projects
- Pilot projects are important
- The inevitability of what is already here
In SAMC’s work with CEOs throughout the US, Canada and Mexico, we find similar challenges but different approaches to making new ideas work. It was not very surprising to learn about the ski area abandoning the Blue Ocean Strategy and returning to their old Red Ocean with abundant competition and diminishing demand.
People—leaders and their followers—are safest in what is familiar and well-known to them. Their brains, as I have written elsewhere, hate to change. And cheaper is not an effective way to adapt to changing times. Indeed, it leads to commoditization and all-too-often, decline or disappearance.
It takes hard work to bring great ideas to fruition, and the ability to overcome substantial opposition
What we find when working with CEOs and their staff is that the unfamiliar gets in the way of creating the new. The front-end of innovation, the fresh ideas that emerge, are challenging but fall into familiar skills that people can apply. But when it gets time for the back-end, things fall apart.
Some of the reasons why are floating around in the literature of today. In Rita McGrath’s new book, “The End of Competitive Advantage,” she speaks about the kind of people needed at different stages in an innovative process. Those who are great at ideation are not always the ones you need to convert those ideas into testable concepts and evaluate them in test-markets.
Few companies invest in the skills required of a Chief Innovation Officer, or even a Chief Strategist, both of whom fundamentally understand how to deconstruct a problem and then reconstruct the ideas into bundles of possibilities.
The stories often cited around Nescafé’s Nespresso show you how hard it was for Nescafé to reconstruct their business model and how they had to continuously experiment, reflect upon, pivot and redirect the product line until it became the remarkable success story that it is today.
Change, great ideas and terrific products are never easy.
Are you really ready to change? Here are four ways to know:
I always ask a prospective client four things if they are going to avoid the Flight or Fight around new strategies, products or markets:
- Tell me the last time you adapted or adopted something that was dramatically new—personally or professionally. Let’s see if you seek the new or flee from it.
- Who on your team is going to become the chief of a new strategy? How are they bringing the right skill set to the journey?
- How are you going to mentor them, recognize their efforts, protect them from the naysayers, and envelope them with the space to successfully innovate?
- What type of culture do you have today? Will it be the right one for tomorrow? Is your culture one of structure where the “rules rule” or rather, a place where ideas can flourish? A place where the comfort of the team or the family firm challenges those who want to step out of the familiar and try the new? Or are you a culture of results without the patience for discovery?
Big questions at a time when the speed of change is all around us and the need for continuously exploring and experimenting is essential for top-line and bottom-line performance.
Ask yourself these same questions and ask your leadership team as well. See if you are ready to change, maybe even find your Blue Ocean Strategy.
Competition-free blue oceans, not overcrowded red ones, are the answer to business growth and consumer delight
Like it or not, you are going to have to seek new markets and create demand or find your company sucked back into the past.
For the sake of your business, I hope you choose the former.