What’s worse than having to ruthlessly fight for your next deal? Okay, global famine, dictatorships, and Jimmy Fallon are, but perhaps we can agree having to constantly compete (and concede) to win business is awful, exhausting. INSEAD professors of strategy W. Chan Kim & Renée Mauborgne coined the term “blue ocean strategy” – and 13 years ago published an international bestseller by the same name – in the spirit of rescuing businesses from the “red ocean,” those bloody waters where seemingly everyone in an industry knife fights over the same meat day in and day out, making ugly concessions to secure so-called wins. Late last year, the authors released the sequel, Blue Ocean Shift which helps the reader take crucial next steps toward growing in these competition-free waters. As with their first book, this one is a must read for committed, dedicated business people who know that through clever thinking and fresh eyes, any organization will benefit by implementing the three components of the shift: expand horizons, build competence, and drive process with healthy, humane approaches (read: no carrots, no sticks).
The authors tell us to map today to see tomorrow, challenging traditional measures when assessing “the strength of an organization’s portfolio of offerings: market share and industry attractiveness.” Think of Kodak and BlackBerry. The former dominated its space as digital film started to take off and the latter was our erstwhile not-so-dumb phone of choice. Both enjoyed healthy market share earlier this century while Apple’s (for phones, anyway) was nonexistent. But because their respective industries were so appealing, the iPhone came along to squash them both like bugs. “Market share is important,” Chan & Mauborgne confirm, noting “most organizations want more of it.” But due to its lagging indicator nature, market capture does not a panacea make. Taxi medallion owners and hoteliers can grouse all they like about the unfairness of models employed by ride-and-space sharing upstarts, but anyone paying attention knows that innovation is happening all around us, all the time. On this front, the book’s sections highlighting citizenM, the micro-hotel chain that is rocking that industry, are particularly memorable. Using the authors’ ERRC grid, citizenM has managed to Eliminate superfluous lobby staff, Raise the comfort standard, Reduce wasted space, and Create a communal experience. While Marriott, Hilton, and the like lobby against Airbnb, this scrappy company readies to steal those giants’ milk money.
Which brings us to Square, co-founded by Twitter CEO Jack Dorsey as the answer to transactional headaches. Dorsey knows most of us carry little cash, so giving personal services providers the option to swipe our Visa, MasterCard, and American Express cards presented a meaningful solution to a first-world problem. Despite the fact that all three credit cards are among the world’s 100 most recognized brands (not to mention having endless financial means), none had graduated from the blood sport of “striving to win a greater share of the wallets of the same group of customers: established merchants and their customers.” Given a supposedly saturated market and regulations ever more stringent, the waters are as red as in any other industry. But the way Dorsey and his team saw it, there was a market to create from what the authors term an ocean of noncustomers. Who’d have thunk it, paying the pizza guy and piano teacher and babysitter with a Visa? So a sector controlled by cash and checks has been upset by a so-simple-it’s-brilliant Square reader (and hey kids, they’re gonna accept bitcoin!). The authors wonder whether or not we know who our current third-tier noncustomers are and what we’re doing to attract them. Consider reading their book, which is surprisingly easy to absorb despite its textbook-like nature, as a good place to start in addressing that challenge.