Consulting Consultants

I've been a product developer/marketer my entire career. I walked into the job accidentally, and have done essentially the same thing either independently or as an employee since then. I've spawned lots of products and a few businesses, and I continue to create them. My latest, Blue Ocean Strategy Createware -- the only authorized practitioner's tool for Blue Ocean Strategy -- is shaping up to be one of the coolest yet.

Some consultants are brilliant: they have great insight and they're fantastic at what they do. There's a good chance that by hiring a strong Blue Ocean Strategy Consultant that you'll raise the chances of finding a blue ocean opportunity. But some others consultants are lousy: the damage they can cause to an organization far outweighs any value they bring to it.

The key, I suspect, is simple: ask a consultant what they've done that they're really proud of. Ask them what business and products they've built, sold, or acquired. Then listen for a tinge of nostalgia and pride in their voices as they rattle off a few, along with a bunch of digressions about the challenges they came across. They may even send you an email with a bunch more they remembered after your conversation ended. The best consultants will be enthusiastic even about their flops, explaining what caused the failure and what they'd do to prevent it next time.

Good consultants will talk more about the reach and influence of their products, rather than the revenue they generated: I don't entirely understand why, but this trait seems to exist with the best of them. You'll have a tough time getting them to stop talking about how at least one product or service, that they were a key member in creating, rocked the world in its market.

The bad consultants will drone on endlessly about money and metrics. That isn't to say that money and metrics aren't important -- they're vital to business -- but they're just measurements of deeper factors influencing success.

Most importantly, remember that unless you've hired a full featured product development firm like IDEO, and trust them enough to sell whatever they produce, you are still going to have to do the work. This may work with a tiny number of the very best firms, like IDEO, Frog Design, or Fluid. But more often than not, it won't lead to success.

A business process like Blue Ocean Strategy -- in the hands of competent consultants -- makes it more likely that you'll succeed. But you still have to do a lot of work to get there. There is no low-cost magic machine that will turn out blue oceans on demand: the path to success is paved by sweat, disappointment, and endless hours of hard work, plenty of which will result in nothing.

But once you succeed -- once you unlock that blue ocean business -- you'll look back on those endless hours of toil with nostalgia as you struggle, like Nintendo, to crank out widgets fast enough to meet consumer demand.

Blue Ocean Strategy & Open Source Technology

My latest project is Blue Ocean Strategy Createware, the only authorized practitioner's tool for Blue Ocean Strategy. Createware is an ongoing project that probably deserves an entire series of posts, though I'll start with one insight I had from a module we're just finishing.

First, some background. Createware is web-based software built entirely, by design, on open-source technology. That doesn't mean that we didn't use any proprietary software while building it but, rather, that none of those proprietary standards sneaked into the final product. For example, the team uses a collection of Windows and Macintosh workstations, and our servers run the standard open-source LAMP (Linux, Apache, MySQL, & PHP) stack. The interactive chart making modules are programmed in Flash, an open standard, though we used Adobe's proprietary tools for our design and compile cycles.

An insight I had is that open source may be the single best example of a Blue Ocean movement I can think of. Everything about the open-source movement seems to leap straight from the theory. For example, the core of the open-source movement is Value Innovation. Disparate groups of developers listened to customers and non-customers, fielded a list of key elements, then used the Four Actions Framework to decide what needs to be Eliminated, Reduced, Raised, & Created.

Besides applying the Four Actions Framework the open-source movement also embraces Fair Process and Tipping Point Leadership. There are gatekeepers that decide whose code goes in and whose gets left out: this is actually a well-defined structure. These gatekeepers make informed decisions and almost always let people know how they came to their decisions, and the decisions are usually relatively final. Similarly, decision makers exercise Tipping Point Leadership; a small and fluid group of extremely influential people lead by ability rather than fiat. There are no spoiled heirs here. Even the most influential leaders -- GNU founder Richard Stallman and Linux creator Linus Torvalds -- have found themselves uncomfortably marginalized within their own movements at times.

The mechanism that drives the Value Innovation process within the open-source movement isn't entirely clear, but it definitely exists. Let's take the flagship Linux Operating System as an example. For purposes of illustration, I'm focused on the OS in general, rather than any specific implementation. The development of Linux Eliminated monolithic control over the code-base, Reduced branding and marketing, Raised product quality and reliability, and Created a peer-review system.

These sound easy but at the time they represented a wildly different way to think. The Free Software Foundation (FSF)/Gnu's Not Unix (GNU) project brought us 90% of the way there, but by leaving in place the monolithic control the GNU group understandably, albeit irrationally, spooked corporate chieftains. Torvald's Linux removed this control; the downside is there are dozens of flavors of Linux but the upside is that a number of these flavors are supported by the software giants and -- with that support -- moved from being a marginal experiment to becoming the preeminent operating system of corporate data centers.

Just because the open-source model has been successful doesn't mean there are those that don't try to usurp it to some extent. One of the features of Createware is "Save to Power Point" but, remember, there are no Windows Servers involved. How do we do that? Using a relatively new technology called Office Open XML (OOXML) that allows people to write Office document without Office. What's the downside? OOXML is insanely complicated to work with compared to OpenDocument, a competing format widely endorsed but so far incompatible with native support for the widely deployed MS Office. Why would Microsoft allow us to do that? Cynics say they made the format so complicated that programmers decide it's not worth fiddling with and just use Windows and Office. I'm not ready to take either side, except to say that OOXML did seem unnecessarily cumbersome and the documentation was overwhelming, but -- to be fair to Microsoft -- there is a lot of genuine complexity involved in the underlying engineering issues.

Is OOXML an attempt to rein-in the Blue Ocean open standards before they trample Microsoft's red document preparation software and reduce it's utility to a commodity: a tool to bloody up the blue ocean of open source? That's a religious debate I'm not going to wade into, other than to say that it's nice to be able to save to PowerPoint natively. Why do I need to save to Power Point, as opposed to a different document format? Because that's what my customers demand. Why do they demand that? That's the eventual Achilles heel of open-source and probably a question best answered by a strategic consultant rather than an enthusiastic product developer.

Fair Process: Blue Ocean Strategy

I've had a busy week, but have to remember that it's not nice to ignore one's blog. A large part of writing a blog is the ongoing commitment of time and energy required to add regular posts to it. A discussion about an adequate commitment of time and energy might actually make for a good post.

The specific focus -- a place where people tend to fall apart -- is that part of Blue Ocean Strategy called Fair Process. Much of what is now in the book comes from a series of articles published over many years in Harvard Business Review. Fair Process was the first of those articles, and the one overlooked by many people.

Fair Process is not about creating consensus in the decision making process. My own experience is that consensus is often harmful; consensus often prevents companies from making the kinds of dramatic changes that are needed to find genuine Blue opportunities. But Fair Process is about communication, about the establishment of a two-way line of communication between all current and future people involved in the creation of a new product or service.

Why no consensus? Thinking Blue always requires changing one's thought patterns: redefining the marketplace and building products and services to include non-customers. There will always be some number of people that will just never go along with this. These people must not be allowed to torpedo your new, Blue, opportunity.

But they -- and virtually everybody else who will be affected -- must be included and asked for their input. After you make a decision you must explain how you came to that decision, why you came to that decision, and why you believe that decision is in the best interests of the organization. There shouldn't be any ambiguity about the path that led to this decision making process or the trajectory of the new, Blue organization.

People can choose to accept and embrace the decision, or they can find another job. As harsh as it sounds do not allow people to sit around and do their best to sabotage the tough work required to create and launch your new product or service. If your competitors are smart they'll create plenty of conflict to challenge your new baby blue ocean, trying to redden your blue ocean before it grows (and if you've done your work they'll be irrelevant, and unable to do you any substantive harm).

Don't assume this applies only to the cranks in your organization. Remember the initial case study for Fair Process. To briefly reiterate, there were two factories. One had great labor relations; the other awful labor relations. The market was forcing substantive change. In anticipation of upcoming changes at the factory with poor relations managers kept workers abreast about the reasons for the change, the long-term ramifications of the change, and listened to their thoughts. They left the other factory alone though, thinking there's no need to bother them with decisions since there was already a strong trust relationship.

The end result, of course, is the factory with poor labor relations understood the need for change and bought into the process. The other factory only saw consultants coming and going quietly, heard rumors about major changes, and assumed the worst. Thankfully, before things spiraled completely out of control the managers realized how important it was to communicate and involve people, even when those people aren't in a decision making position.

This process of ongoing involvement -- not decision making, but rather communication -- is as vital to the health of an organization as coming up with brilliant Blue products and services delivered by value innovation. This is what's called Fair Process. It's as vital to success as a great TO-BE value curve, but frequently ignored. Ignoring Fair Process is probably the single greatest threat to your new, Blue business.

Blue Ocean Strategy: It's Work, but Worth It

I don't remember the names of many of my teachers, but one that stands out is a high-school teacher named Constance Holland. Ms. Holland was a civil rights activist that marched with Dr. Martin Luther King then turned teacher. After doing her best to explain something, then staring at the blank faces around the room, she stopped and roared the only quote I remember from any high-school teacher:

Wake Up! You're better than this .. this spaced-out indifference. Reach for the stars kids, and remember that anything else is beneath you.

I come across a lot of product and business developers; engineers and MBA's and people with degrees that end in "D." I feel like many US-doctors: people wait until their company is hurting then come looking for a pill to fix what ails them while they continue their same lousy health habits. They want the benefits of regular exercise and a good diet, but without the work.

Business leaders, entrepreneurs, students, workers, government officials ... everybody. Wake up. Listen to Ms. Holland: reach for the stars. Build great businesses. Jack Welsch famously used to say "Be #1 or 2 or get out." Come on Jack, you don't want to be #2: who wants to be #2? Art Rock, the early VC who funded Intel and Apple, once lectured something along the lines of "'A' people hire 'A' people and rarely 'B' people. They're happy when their hires pass them by, and they're quick to get rid of the 'B' people. 'B' people hire 'B' and 'C' people, on purpose. Run the process through a few hundred iterations to see it's so important to get the best and the brightest."

The US economy is going into the tank, largely on incompetence, indifference, indiscretion, and laziness. We have nobody else but ourselves to blame. But we also have the strongest entrepreneurial engine in world history: the right people and policies will fire it up and we'll eventually be fine. Other countries can keep cranking out low-cost labor, loosen their environmental and monetary regulations, or force workers to subsidize business through immoral tax structures. It doesn't matter: these commodities are inherently Red Ocean spasms. Some other country will come along that has even cheaper labor, is willing to pollute their water and air even more, or lets you run amok. It's like the hypothetical walk to the wall where the distance is always halved: we'll never quite get there, and even if we did who wants to walk into a wall?

Be Blue. Don't commoditize to compete in a Red Ocean but, rather, redefine the rules of the game; the boundaries of the market. Any company or country or individual can reach for the stars or slouch for the sewer: they can be Red or they can be Blue. But they can't be both. If they choose to go Blue they have to do the work; there's just no magic way to get there, but the results are worth it. The choice is entirely ours, and it's about time our business and government leaders started to take it more seriously.

Steve Jobs speaks...

Quoting Jobs:

"It's not about pop culture, and it's not about fooling people, and it's not about convincing people that they want something they don't. We figure out what we want. And I think we're pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That's what we get paid to do.

"So you can't go out and ask people, you know, what the next big [thing.] There's a great quote by Henry Ford, right? He said, 'If I'd have asked my customers what they wanted, they would have told me "A faster horse."'"

...

"My job is to not be easy on people. My job is to make them better. My job is to pull things together from different parts of the company and clear the ways and get the resources for the key projects. And to take these great people we have and to push them and make them even better, coming up with more aggressive visions of how it could be.""

...

"We don't have a lot of process at Apple..."

...

"At Pixar when we were making Toy Story, there came a time when we were forced to admit that the story wasn't great. It just wasn't great. We stopped production for five months.... We paid them all to twiddle their thumbs while the team perfected the story into what became Toy Story. And if they hadn't had the courage to stop, there would have never been a Toy Story the way it is, and there probably would have never been a Pixar.

"We called that the 'story crisis,' and we never expected to have another one. But you know what? There's been one on every film. We don't stop production for five months. We've gotten a little smarter about it. But there always seems to come a moment where it's just not working, and it's so easy to fool yourself - to convince yourself that it is when you know in your heart that it isn't.

"Well, you know what? It's been that way with [almost] every major project at Apple, too.... Take the iPhone. We had a different enclosure design for this iPhone until way too close to the introduction to ever change it. And I came in one Monday morning, I said, 'I just don't love this. I can't convince myself to fall in love with this. And this is the most important product we've ever done.'

"And we pushed the reset button. We went through all of the zillions of models we'd made and ideas we'd had. And we ended up creating what you see here as the iPhone, which is dramatically better. It was hell because we had to go to the team and say, 'All this work you've [done] for the last year, we're going to have to throw it away and start over, and we're going to have to work twice as hard now because we don't have enough time.' And you know what everybody said? 'Sign us up.'

"That happens more than you think, because this is not just engineering and science. There is art, too. Sometimes when you're in the middle of one of these crises, you're not sure you're going to make it to the other end. But we've always made it, and so we have a certain degree of confidence, although sometimes you wonder. I think the key thing is that we're not all terrified at the same time. I mean, we do put our heart and soul into these things."

Across Alternative Industries: From commercial printing to a pregnancy calendar

One of the six paths towards value innovation is to look across alternative industries. Let's take a brief quote from the book: "alternatives include products or services that have different functions and forms but the same purpose."

One of my inventions is the online pregnancy calendar. It's become relatively common now, but I built the first pregnancy calendar -- a website which contextualizes information during fetal development -- in early 1996 when my wife was pregnant with our son.

I'd like to say the pregnancy calendar was a well thought out and brilliant invention. The truth isn't quite as glamorous, but is more valuable from an understanding of where to look for new business ideas...

At the time I was working for Merrill Corporation on a print production control system. Merrill (a great company, and worth an entire separate post) is a leader in the creation of compliance documents for the securities industry. Way back when this meant printing books of financial disclosures to be mailed to investors and government agencies. These books would have to be produced at the last minute, changing with market conditions, then distributed around the country to Merrill's various print plants.

At the time I was looking for a method to allow the different print plants to coordinate scheduling the print jobs. They had a primitive Unix-based system but scheduling is an inherently graphical function, so they relied mainly on white-boards. The web browser had been invented not long before and table support was relatively new. I had the thought to use HTML tables to show production schedules that could be viewed and manipulated from different plants around the country.

As a learning exercise, at home, I wanted to see if it was possible to dynamically generate calendars in HTML. Once I created my test calendar I needed to populate the cells with data. The house was filled with pregnancy books and I thought it'd be neat to see how my son was developing tied to real dates.

So I pulled out data from all the pregnancy books and arranged them into a text-based database using their relative offsets. For example, "Day 8 -- Blastocyst cells separate: a baby head and tuchas form." I finished it, half tongue and cheek, and gave it to my wife, who gave it to friends, and on to other friends. Next thing I knew my learning project was on CNN, and being written about in the WSJ, NY Times, and lots of other media.

Most importantly, had I not started to look at industrial print plant scheduling I would never have cooked up the idea of a dynamically generated pregnancy calendar. I'm sure that somebody else would have eventually, but it wouldn't have been me: I would've missed the market. By looking across alternative industries -- even inadvertently -- I accidentally created a category killer that continues to dominate the online landscape to this day.

End note: For those who realized it while reading ... yes; I may have been the first to render calendars with contextualized content in HTML tables. Was I actually the first? Who knows. Could I have patented that? I hope not, but the way the PTO was recklessly issuing patents back then, probably. Would I do things any differently today with the patents? Nope. Even though I was told "sell this at a discount, or we'll make a knockoff" I still believe that software patents are rarely justified. Larry Page's brilliant Page Rank algorithm is the type of breakthrough that may make them acceptable, but nothing less than that. In any event, I suspect Google would've been just fine without the patents; the hassles from patent trolls is outweighed by the benefit to genuine innovators.

Quality Quotes

In preparation for some other work I've been compiling innovation related quotes and realized posting some would be a good way to start the week.

“There’s a way to do it better – find it.”
- Thomas Edison

“You never change something by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”
- Buckminster Fuller

“Why join the navy if you can be a pirate?”
- Steve Jobs

“New opinions are always suspected and usually opposed, without any other reason but because they are not already common.”
- John Locke

“Observe what is with undivided awareness.”
- Bruce Lee

“Anyone can look for fashion in a boutique or history in a museum. The creative explorer looks for history in a hardware store and fashion in an airport.”
- Robert Wieder

“All truths are easy to understand once they are discovered; the point is to discover them.”
- Galileo

“To invent, you need a good imagination and a pile of junk.”
- Thomas Edison

“People take the longest possible paths, digress to numerous dead ends, and make all kinds of mistakes. Then historians come along and write summaries of this messy, nonlinear process and make it appear like a simple, straight line.”
- Dean Kamen

“In theory there is no difference between theory and practice. In practice there is.”
- Jan van de Snepscheut

“Innovation is not the product of logical thought, although the result is tied to logical structure.”
- Albert Einstein