When Blue Ocean Strategy by W Chan Kim and Renee Mauborgne came out in 2004 it was a seismic book.
The thrust of Blue Ocean Strategy (BOS) is that companies must create and drive up elements of remarkable customer experience to be different from their competition. At the same time they have to eliminate any areas of experience that have are the boring “norm” in the sector that company plays in.
BOS urges us to create uncontested market spaces (blue oceans) thereby making the competition irrelevant, rather than scrapping in busy, noisy, commoditized markets (red oceans). As the Harvard Business Review described it, “In blue oceans, companies invent and capture new demand by turning non-customers into customers, and by providing customers with more value while streamlining costs and building brand equity.”
Well, now Kim and Mauborgne are back with Blue Ocean Shift: Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth. Where the original book was all about communicating the concept, this book is instead about practical steps one can take to achieve growth using the framework.
We’ve gone for a healthy(ish) treat today with almond butter cups today. Line up a coffee and read on…
Blue Ocean Shift review: Top 5 takeaways
- Strategic change will fail without fully embracing and engaging your people at the start. Blue Ocean Shift dedicates a large part of the introduction, and several chapters, to the importance of including the people who will be delivering the strategy in creating it in the first place. The authors discuss the importance of embracing people’s humanness and engaging them emotionally so that the entire team can travel along the blue ocean strategy shift together.
- Defining the actual boundaries of a product or market is the hard part. Markets can be created by both disruptive (iPhone disrupting the mobile phone market) and non disruptive (Sesame Street – creating a market space of educating children before TV had previously gone there) innovations. The authors make the valuable point that we only really ever see what we look for.
- Creating a new market is subtly different to disrupting or displacing an existing one. There are only three ways to make a market-creating strategy, or blue ocean shift: offer a breakthrough solution for an industry’s existing problem, redefine an industry’s existing problem and solve it, identify and solve a brand-new problem/opportunity. What matters is where on the spectrum of an existing market, you decide to strike with your strategy.
- The value of broad research: The book walks through the example of US wine buyers. Despite the relatively high alcohol consumption in the US, wine sales are comparatively low. This can be traced to wine being confusing to buy and even down to the fact that 80% of US consumers don’t own a corkscrew! Kim and Mauborgne suggest that we look at these and similar ‘blockers” to buyer utility throughout the Research/buy/use/dispose of chain for customers. It struck me that this is very hard to do unless you have broad and deep research on not just your market but the wider space. You need a non-myopic understanding of human behaviour to even get your hands on the statistics needed to be disruptive and creative.
- Have a look at who your current “noncustomers” are. I found this concept really interesting because, as someone with a background in marketing, I’ve always learned to look at current and likely buyers, not people who are noncustomers. The book highlights an area of noncustomers it calls “unexplored noncustomers.” These are people who would never have previously been perceived as being in your market of potential customers because they are presumed to have been inaccessible or part of another industry. This is possibly the largest catchment of potential value that you can unlock using BOS and is an exciting thought.
Blue Ocean Shift review: Top 5 quotes
- “What if all the players in the industry were operating under the same set of assumptions, but those assumptions limited the attractiveness of and the demand for their products? What would happen if those assumptions were rethought?”
- “Organizational leaders often accept and act on two fundamental assumptions. One is that market boundaries and industry conditions are given. You cannot change them. You have to build your strategy based on them. The other is that, to succeed within these environmental constrains, an organization must make a strategic choice between differentiation and low cost.”
- “Ironically, our research shows that the two most common practices organizations rely on for execution are also the reason most transformative efforts fail. First, most organizations treat strategy creation and execution as separate and sequential activities… Second, when it comes to execution, most of the time and attention get focused on making structural changes and using carrot and stick approaches…”
- “When insights are lacking…there is no substitute for going into the field to discover them firsthand. Asking the marketing department to come in and walk a team through the buyer experience cycle or provide research reports to fill in the blanks, will not work. We cannot emphasize enough the danger of allowing a team to outsource their eyes and ears, even to their subordinates.”
- “The wisest rollout strategy is to start small, then go fast and wide. We can’t emphasize this strongly enough. Apple, for example, didn’t build 300 stores at once. They first built 2 and concentrated their efforts on ironing out the snags that inevitably get fully revealed only when a new offering goes live, in color. Soon thereafter they built 25, and the rest is history.”
Blue Ocean Strategy was originally posited as marketing strategy book but so much of both books, Blue Ocean Strategy and Blue Ocean Shift, are about customer understanding, customer and buyer experience and deep empathy with staff and customers. This latest book, Blue Ocean Shift is highly recommended, it’s practical, insightful and really worth reading for anyone in the CX space.
Want another book review to peruse?
We love a good book and write a review on something in the Customer Thermometer library every month. Check out some of our back catalogue:
- Our top 5 takeaways and quotes from “Quirkology” Richard Wiseman’s book on the science of every day behavior
- “Rebel Ideas” by Matthew Syed is one of our reads of the year! We really loved this one and quite a bit of it chimes with Blue Ocean Shift too.
- Deep customer focus is the name of the game at Amazon, as covered in our review of Brad Stone’s expose, “The Everything Store.“