Blue Ocean Thinking
Updated: May 8, 2019
The innovation conversation is very topical, and one of the distinctions that I found very useful in my exploration was that of Red Ocean and Blue Ocean thinking. Kim & Mauborgne in their HBR article suggest that many companies go down the Red Ocean path, thinking within their existing business framework to provide more or better services.
Blue Ocean thinking means moving outside your current framework and exploring from what is possible. What are our customers’ key issues or challenges? What solutions or opportunities will serve, or open up our industry sector?
The creation of Cirque de Soleil is a great example of Blue Ocean thinking. When It was formed in 1984 at a time where Circus attendances had been declining. Use of animals had significantly diminished, alternative entertainment (sporting events, TV and video games) was casting a growing shadow and attracting star acts was increasingly difficult and expensive.
Cirque de Soleil took the best aspects of the Circus model—the mobile tent and breathtaking
performances, but created more of a performing arts milieu, with exciting themes, stunning
costumes and extra-ordinary acrobatics. By doing so they not only tapped into the existing circus audience, but also a new audience of theatre goers and corporate clients who were prepared to pay more, and achieved more success and revenue in their first 20 years than Circuses had in the previous century.
In your industry, is there a ‘Cirque de Soleil’ opportunity? Can you take the next step in terms of service provision, convenience, or portability to create a new market opportunity? What is the state of your industry: attractive or unattractive? Many Blue Ocean creations (eg; T model Ford, Japanese fuel efficient autos) were developed at a time when their industry was unattractive, which provides
a strong motivational and market context.
Atlassian, a creative Australian Software Company, allocated one day a month for their developers to work on ideas unrelated to their current work, if they showed their results to the business. This generated a whole array of fixes and a plethora of worthwhile initiatives, which have contributed to the great success of the company. Take a lead from Atlassian, and engage your staff in exploring innovation within your industry or market segment.
Could change be driven by technology pioneering or value pioneering?
The internet and technology can provide the opportunity for Blue Ocean thinking——different
ways of connecting with consumers and different modes of distribution and delivery.
Companies are now developing ‘innovation teams’, bringing specialists in, or outsourcing skills to consultants to help move their company down the innovation path.
It is an exciting new wave. Are you up for the challenge?
Ref: Kim & Mauborgne, Blue Ocean Strategy: Harvard Business Review on Strategy 2011