Blue Ocean Strategy: Honesty

Blue Ocean Strategy doesn't directly deal with the issue of honesty, but it comes close enough at least one blog post seems appropriate.

In the world of new product development and new business development fraud runs rampant. That not a generalization: it's a simple fact, supported by overwhelming evidence. I myself have seen egregious behavior.

Normally the victims of the bad behavior are embarrassed so nothing happens, or they settle their disputes quietly. I remember one case where a business broker sold a company a useless piece of technology for $16 million: not only was it bad technology but one vital component directly infringed on the license of another company who wouldn't budge, rendering the software entirely useless. Their solution was to pay another small startup $50K for a functional piece of the same software, then message senior management that the less expensive one was in fact the $16MM useless application. A director or two were quietly fired but the money never recovered. Every genuine technology entrepreneur can tell similar stories; many would be happy to keep their losses to $16MM.

With that in mind, I came across an article in this morning's New York Times ("Doctors Start to Say ‘I’m Sorry’...") about a radical new business process in the medical field that eliminates two-thirds of of the cost and 80-percent of the time spent on malpractice claims. Doctors who make a mistake are required to own up to the mistake, apologize to the patient for hurting them, honestly explain what happened, and work with the hospital to ensure fair compensation. Amazingly, when the patients feel like their doctor did their best but made a mistake -- admitted the mistake and is working to fix it -- they're much less likely to sue.

Honesty is one theme I notice consistently running through successful technology companies. Steve Jobs makes it clear that Apple is always focused on giving consumers items he and his staff believe brings genuine utility. Blue Ocean Strategy has a focus on genuine consumer utility woven through virtually every element of the process (conversely there's thinly veiled contempt for raw marketing: items that do not bring about utility). The core part of value innovation -- requiring that factors be eliminating and reduced -- is clearly explained to consumers, who accept the trade-off for the factors that were raised and created.

Honesty. It doesn't always mean delivering a great product. But it means trying then, when that fails to happen, admitting to it and continually working to improve. It means disclosing when a person or company blows it then working hard to live up to the reasonable expectation of the buyer. It means exposing and rooting out the pariahs so they don't gunk up the system like seaweed does an ocean.