november 2016 | Intro
Chart a New Course to a Blue Ocean
If you were to ask the younger employees in your company or organisation about the things that would make them feel most wanted, the opportunity to stay and develop together with the company would probably be top of their list. Many of us are convinced that committed employees are key for companies and organisations to succeed in the long term.
A few years ago we wrote about The Blue Ocean Strategy, an international bestseller in about 30 countries that presents 15 years of research on over 150 companies. The authors, W. Cham Kim and Renée Mauborgne, urge companies to break free from the cut-throat competition, the red ocean, by producing their own market space, a blue ocean, where competition is irrelevant.
In the red waters, the industry boundaries are defined and accepted and the game rules are known by all. Here, companies try to be better than their rivals in order to grab a greater share of the market. The more actors there are, the more limited the opportunities for profit and growth. Cut-throat competition turns the red ocean blood-red. New knowledge is not used. Intellectual capital, which we have talked about in Sweden over the past 20 years, is probably not assigned any value in an annual report and in all likelihood is not even listed as a topic.
A blue ocean is an untapped market where you create a new demand and opportunities for highly profitable growth. Some blue oceans have been built outside existing industry boundaries, but most have been created based on red oceans by extending industry boundaries. In blue oceans, competition has no meaning, as the game rules have yet to be set.
The book shows strategies and methods for finding blue oceans. It explains how to identify and look beyond your business operations at what actually creates new customer value, not just how to increase customer value. The book teaches the methods using concrete, international examples. It describes analysis tools that show how companies can act systematically to produce their own blue oceans.
Like the discussion about Fixed versus Growth Mindset, it is about daring to see development paths as opportunities, rather than obstacles – understanding that new knowledge must be constantly obtained or our company/organisation will stagnate, stop developing and sink to the bottom of the dead red ocean.