Blue Ocean Strategy: Seeing through the clutter

As the original Clinton campaign would have put it, "it's the six-path framework, stupid." Seriously ... a lot of people ask how to actually use Blue Ocean Strategy to make a new business. I've written a longer post that goes into each specific step, but realized that I skipped an executive summary that may be even more important.

Summarizing the 240 page academic book into one sentence: use the six-path framework to find the key factors of a business through the lens of customers and non-customers, then use the four actions framework to redefine the market boundaries of that business while adhering to tipping-point leadership and fair process to increase the chances your organization will be able to execute your new business. OK ... it was a run-on sentence, and it greatly oversimplifies. Still, it's a start.

As a product/business developer I'll take things a step farther. Listen to the Harry Chapin song "Six String Orchestra" where a young man dreams of being a great singer. In reality, he can't play his instrument and receives nothing but negative feedback from everybody around him. But in his mind, he hears the beautiful songs of the future, knowing that he'll have to do the hard work, practice a lot, and find the right people to make music with.

Product and business development is like that. I once had an early version of a product that went on to do great generously described as a "mud hut" by a seasoned software developer. He wasn't being negative: just saying that he understood my vision but that a lot of work is needed to turn that vision into reality.

Some people will disparage or sabotage your ideas out of petty jealousy, or because they fear their livelihood or relevance will be threatened either by the business you create, or the fact you (and not they) created it. But I've found many aren't acting in bad faith: they just don't understand where you're going and don't have the brainpower to see the end of the path.

Blue Ocean Strategy helps you not only figure out where that path should lead to, but gives us a series of powerful tools that help communicate that to others. Blue Ocean Strategy provides a roadmap, but isn't magic: you, the product and business developer have to figure out where that road is leading to and push your organization down that path.

The six-path framework is how you, the person trying to redefine a business or industry, find those key factors that are vital to the success of your business: it's the music you hear in your head, that you know you're capable of.

In the search for key factors, it's not uncommon to quickly jot down a list of factors: don't do this. Remember the old software engineering term GIGO: Garbage In, Garbage Out. The process of identifying and isolating key factors should be long and painstaking: there's nothing easy about it. You should really be uncomfortable with the key factors you eliminate and reduce. Making things worse, the longer you've been in the industry the more difficult the process will be, because you'll be steeped in the standard boundaries by which companies are already competing.

But if you use the six-path framework to find those key factors, then apply the four actions framework against them, you'll find that music you knew was there will come alive in real life. You'll invent a Wii, create the Prius, or launch the next Google. But never underestimate the amount of raw effort that went into each of these individual efforts, or that must go into yours if it has a chance of succeeding.

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: 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."