Blue Ocean Shift Tools

In my previous post on Blue Ocean Shift: Beyond Competing, I shared the differences between blue and red oceans and the four principles of blue ocean strategy.  In this post, I outline blue ocean elements and tools.

The earlier post mentioned humanness.  Humanness has three elements:

  • Atomization:  Allowing people to know something is achievable by making larger, daunting tasks attainable by breaking them into smaller pieces.
  • First-hand discovery:  Every team member thinks in new ways and experiences. 
  • Fair process:  This is achieved through engagement, explanation, and clear expectations.  Engagement gets stakeholders in the decision-making process.  Explanation means sharing a deep dive on why the group is passing on some ideas.  Clear expectations mean what it sounds like; everyone understands what’s expected and the objective measure of success.

Five tools implement a blue ocean shift:

  • Pioneer-migrator-settler map:  This tool assesses how an organization’s offering fits in the overall market.  It breaks customers into three groups: pioneers—customers who love your product, settlers—customers who view your product about the same as your competitors, migrators—customers in the middle.  Draw a rectangle with three sections.  On the bottom, list your settlers.  In the middle, list migrators.  At the top, list the pioneers.  Next, draw circles that represent the revenue each offering generates.  Bigger circle = more revenue.  Where is the bulk of your business?  How can you make pioneers larger and flip migrators to pioneers?
  • Strategy canvas:  The strategy canvas rates your offering against your top competitor.  To create a strategy canvas, put the top ten to 12 competitive factors on the x-axis.  On the y axis, make a scale of one (bad) to five (best).  Take one of your offerings and rate each for each factor.  Draw a line through your and your competitor’s data points.  How do you stack up?  Do the curves roughly match?  If so, it’s a red ocean.  If you’re consistently below, they have the better offering.
  • Buyer utility map:  This is a six-by-six table.  Label the columns purchase, delivery, use, supplements, maintenance, and disposal.  These columns represent the buyer’s life cycle.  Label the rows customer productivity, simplicity, convenience, risk reduction, fun/image, and environmental friendliness.  Answer questions like:  What’s the convenience of purchasing your product?  Where are there opportunities for innovation?  What are areas that are pain points?  How environmentally friendly is it for a customer to dispose of your product?
  • Six paths framework:  This tool generates ideas.  The first path questions why a buyer chooses one option over another.  For example, why do some investors use a self-service website instead of using a financial planner?  The second path looks at your specific industry.  For example, why does a buyer choose one offering over another?  Is it cost, convenience, or something else?  Path three evaluates the chain of buyers.  Who is involved with the buying decision?  Is it the ultimate end user?  Who are the ignored people in the buying process that you could target?  Path five asks how this purchase fits in the big picture.  Is this a stand-alone purchase or part of something bigger?  Path five encourages comparing emotion and functionality as it relates to the buying process and production.  Path six looks at things outside your control that could impact your organization (think weather for a farmer).
  • The six paths framework identifies opportunities.  The authors give us a final tool with the four actions framework to break them down into activities.
  • The four actions framework looks for opportunities.  What is something taken for granted to eliminate?  The book shares a hotel chain called CitizenM, where they got rid of the front desk and replaced it with a self-serve kiosk.  What is something to reduce?  Back to the hotel example, they reduced the room size realizing most travelers don’t hang out in their room.  Where can industry standards be raised?  At CitizenM, this meant soundproof walls and high-quality beds.  Where are there opportunities to create?  At CitizenM, ambassadors replace front-desk workers and are available throughout the hotel to help guests, and because all rooms are the same, they used prefabricated rooms.

The last step shared by the authors is a blue ocean fair.  Invite top leaders to the fair.  At the fair, start with a recap of your current red ocean.  Share why a shift makes sense.  Next, come presentations on new blue oceans.  Each blue ocean idea should have a tagline.  Each presentation should include a strategy canvas and the four actions framework.

When presentations finish, it’s time for the fair.  A station represents each blue ocean idea.  Stations have posters or product prototypes.  Blue ocean working group members can be at their respective stations.  The fair concludes with top leaders voting on the ultimate idea.

Blue ocean away!

Estimated reading time: 4 minutes

Blue Ocean Shift: Beyond Competing

I’ve just finished Blue Ocean Shift: Beyond Competing.  It has a lot of info.  So I’m breaking it into a couple of posts.  Here’s a recap of the first half of the book:

  • Red oceans are hyper-crowded and competitive, and blue is entirely new markets or models.
  • The two primary red ocean strategies are value-driven by giving exceptional service or low cost.  The blue ocean strategy focuses on unserved markets.
  • Beyond looking at unserved markets, a blue ocean approach uses “humanness” to engage employees to make the change and tools to turn a blue ocean idea into an offering.  Humanness is recognizing people’s fears and needs for a purpose. 
  • Blue ocean uses non-disruptive creation where a market isn’t destroyed or replaced but is a net new market
  • To illustrate the four pillars of a blue ocean strategy, the authors share the story of Comic Relief.  First, Comic Relief took an entirely new approach to fundraise and avoided previous typical fundraising approaches like galas.  Second, blue ocean approaches don’t try to beat competitors; instead, they have new competition through creating a new market.  In the Comic Relief example, they used “Red Nose Days,” where money was raised through small donations, not significant events.  Third, a blue ocean approach looks for a new market.  Comic Relief meant focusing on everyday people buying red noses instead of wealthy donors at galas.  Fourth, they empathized with people’s concerns and shared their role in making it all happen.

I’ll cover the key elements and tools to make a Blue Ocean shift in the next post.

Estimated reading time: 2 minutes

Extreme Ownership, How US Navy Seals Lead and Win

In Extreme Ownership, Jacko Willink and Leif Babin, Navy SEAL task unit leaders, relate military principles and tactics to business leadership.  In the past, I shared a summary of their recent book, The Dichotomy of Leadership.  Here’s a few minute overview of their original book Extreme Ownership along with some of my thoughts:

  • At the end of the day, all leaders are responsible for success or failure.  As Jim Collins shared, good leaders look out a window when there’s a success (i.e., you give praise) and when there’s a problem, you take 100% of the fault.
  • State the why when sharing goals or missions. Willink’s superiors said he’d be responsible for taking Iraqi soldiers on every mission; his initial thought was “no.” Then he understood the why.  If Iraqis couldn’t protect their own country, the US could be a permanent presence in the area.  For more on “why,” check out Start with Why by Simon Sinek.
  • When asked to do something by your leader and unsure why it makes sense, ask questions to understand.  Without understanding, it will be hard to be 110% behind the mission or goal.
  • When thinking of who’s on the “team,” look for the big picture.  In the book, one of the authors extracted his team from a mission in Ramadi, Iraq.  He led his team on a risky mission to get out of the city during the day.  In the end, they made it, but his commanding officer asked why he didn’t enlist a nearby SEAL team to provide coverage.  He admitted he was wrong and was thinking too narrowly about who was on his team.
  • Prioritize and execute.  In the book, there was a mission where it was a shit show, and many things went wrong at the same time.  As leaders, when this happens, it’s our job to be calm, prioritize, and execute.  In the book, they share the SEAL mantra of “relax, look around, make a call.”
  • When planning, to be successful, identify and mitigate risks. A complete communicated contingency plan increases the odds of success because everyone knows what will happen if things don’t go as planned.
  • Decentralize management.  Any person can manage six to 10 people.  If you or your leaders have bigger teams, break them down to this size.  Let them make decisions.  As a leader and friend of mine said many times, lead from behind and manage from the sides (i.e., let your leaders do their jobs and if they’re doing it well, stay out of the way.  If not, guide them).
  • Whether upstream or downstream, we can’t fault someone for not knowing something we didn’t tell them or answer vital questions they didn’t ask.  When in doubt, overcommunicate. 

Perfectly Confident: How to Calibrate Decisions Wisely

To help make better decisions, I just finished Perfectly Confident: How to Calibrate Decisions Wisely.  The author notes:

  • Overconfidence makes for bad decisions.  We rarely have all the information required to make a call, so we rely on our gut.  Using intuition leads to mistakes.  Instead of using confidence for decisions, use it to get the wheels in motion on an action or outcome.  For example, if I think I’m a good writer and want to launch a book, use that confidence to write the first chapter and move on from there.
  • Underconfidence creates self-limiting beliefs.  We forget others struggle.  We misjudge the time and attention others use to accomplish a goal.  For example, if learning a new language in a class setting, I may think I’m not as good as another student even though she’s just returned from a year language immersion program in another country.  Another source of being underconfident is doing something infrequently.  Try backing a boat into a landing every ten years versus someone who does it every day.  Frequency builds skill and confidence.
  • We all have feelings of vulnerability or not being “as good as.” In Perfectly Confident, the author shares that John Steinbeck said, “I’m not a writer. I’ve been fooling myself and other people.” As a not prolific writer myself, wow.
  • So, how do we make better decisions?  Make forecasts that outline the range of outcomes with assumptions, not the exact answer.  Forecasts make better decisions.  For example, if you’re estimating a project completion date, and it should take two months. Make a better decision by asking, “What’s the probability it’s finished six weeks, two months, or three months and why?” Thinking this way makes us consider multiple possibilities and assumptions instead of a single set of beliefs for the two-month target.
  • Think “which” not “whether.” In Perfectly Confident, the author shares a study where participants chose to buy a movie or not.  Next, they asked a separate group of participants who would rather have a film or the cash to buy the film.  75% presented with the choice of “whether” to buy the film.  A little over half chose the movie when presented with which.
  • Tied to the above, not in the book, I look for “and” solutions instead of “or” solutions.  For example, if I’d like to exercise and want to spend time with my son, an option is to go for a run with my son.
  • Be aware of bias.  Curb bias by involving others in decisions.  Keep in mind a crowd is typically better at deciding than a single expert.  When asking for opinions, get insight from people who don’t hold your exact argument; otherwise, you are doubling down on your preference.
  • Be confident yet know when you don’t know.  Research shows that being sure increases credibility, but if results don’t back that confidence and credibility, others will quickly fall away.  Also, being vulnerable and saying we’re not 100% certain of our decision creates authenticity and trust—balance confidence and vulnerability.
  • As a leader, be clear on standards and open-minded to new information.  Clear performance standards reduce bias.  When we’re open to others’ insights, we make better decisions.

When: The Scientific Secrets of Perfect Timing

Daniel Pink is one of my favorite behavioral scientists.  I just finished When: The Scientific Secrets of Perfect Timing.  In it, he shares:

  • We all have different times when we are most effective.  This is our chronotype. 
  • Most have a chronotype that peaks in the morning, have an afternoon trough, and an evening bounce. 
  • Beyond the above chronotype, there are two others:  night owl and lark.  Night owls hit their stride in the evening and are typically more creative and impulsive.  Larks believe in Ben Franklin’s early to bed, early to rise with their best hours in the early AM.  Larks tend to be stable and introverted.
  • So, how should one schedule the day?  Base it on your chronotype and plan accordingly.  For example, if you’re not a lark or an owl (which is 60-80% of the population), the morning peak is the best time to tackle focused tasks.  Do idea generation in the early evening.
  • If you’re an owl, flip the above.  Spend night time thinking critically and save the morning for creative tasks.
  • For meetings or negotiations, mornings are typically better than other parts of the day.
  • Are you having a medical procedure?  Do it in the morning.  Mistakes are most common after 3:00 PM.  At 9:00 AM, there’s a 1% chance of an error.  By 4:00, that quadruples.
  • Breaks are good.  Every hour, taking a five-minute break reduces fatigue and improves motivation.
  • Here’s the recipe for a nap which seems counter-intuitive.  Have a cup of coffee, then set a timer for 20 minutes.  If you’re like most, you’ll fall asleep in about seven minutes, get a dozen or so minutes of sleep, and have the ideal nap.
  • With projects, use a premortem.  Try to identify all the ways things could go wrong and identify ways to avoid them.  Understand the power of the midpoint.  Use the middle of a project, like a sports team down by one point after the first half, as an inspiration to bring the effort needed to get the project to completion.
  • While less a business idea than an interesting observation, in When the author shares the concept of “9-enders.” Whether it’s running a marathon or committing suicide, there’s a disproportionate number of 29, 39, 49, etc., who are inclined to do dramatic actions when finishing a decade.
  • While some life planners say happiness comes from being present, absolute satisfaction is when your current self lines up with your future and past you.