Wednesday, April 16, 2008

Blue Ocean Strategy & Technology Innovation

I can't count the number of times I've heard marketers rant on to say that technology has nothing to do with innovation and that Blue Ocean Strategy somehow supports this notion.

Summarizing: Blue Ocean Strategy puts customer value at the center of any new offering. Customer value is never defined in terms of raw technology, but the technology is catalytic to the value: the value will never get realized without the technology.

Let's examine some examples:


  • The Wii wouldn't be without its small, inexpensive accelerometer driving the Wii remote. The accelerometer allows the creation of the magic wand: no accelerometer = no magic wand. However, Nintendo is not marketing accelerometers.

  • Google reads a users mind to return relevant search results. However, these results are driven by a brilliant search algorithm and massive data centers. No brilliant algorithm and no enormous infrastructure = no mind reading web search. However, the end users never see the technology.

  • The Toyota Prius is an engineering masterpiece. A user drives around with more computing power than the entire world had not long ago powered by computer-designed technology no human with a slide-rule could ever have mastered. No computers to design and run the Prius = no magic high mileage car. However, end users never see the technology.

  • Even the Blue Ocean Strategy case studies in the book all have technology driving them. Starbuck's uses extremely sophisticated GIS systems and water filtration technology, Cirque du Soleil low noise, portable power generation and stage technology, the NYPD well documented crime tracking software; the list is endles...

All of these ... virtually every Blue Ocean business has one element in common: catalytic technology that is invisible to the end user. Blue Ocean Strategy demands the technology in itself rarely, if ever, has value but the value the technology brings to the consumer does. And, in almost all case studies, no technology means much less value. There are exceptions, but they're extremely rare.

I'll give marketers who say the technology doesn't matter the benefit of the doubt that they're not just trying to cover-up their own unwillingness or inability to learn about the technology driving their industry. However, when these people pipe-up and start shouting that "technology doesn't matter" tell them that they're absolutely wrong. It's just that technical innovation must be defined in terms that drive utility to the end user, but that doesn't mean the technology is unimportant.

Quoting the book "[acting] on the assumption that bleeding-edge technology is equivalent to bleeding-edge utility for buyers ... is rarely the case." Blue Ocean Strategy, pg. 120. That doesn't mean technology doesn't matter; it means the technology must always be described for it's utility and value to the buyer.

There would be no Nintendo Wii, Google, or Toyota Prius without extremely sophisticated new technology. The NYPD would be chasing down muggers aimlessly, Cirque du Soleil wouldn't be the same without the dramatic lighting, and Starbucks wouldn't magically be located in great locations. Just because the end-user never sees, understands, or appreciates the technology doesn't mean the business/product developer doesn't need to.

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