Capturing New Markets: A book review by Bob Morris

Capturing New Markets: How Smart Companies Create Opportunities Others Don’t
Stephen Wunker
McGraw-Hill (2011)

How to locate, penetrate, and dominate in new markets or in new customer segments

Opinions are divided (sometimes sharply divided) about where and how to generate new revenue sources when competing in a global economy such as the current one, and especially when one’s resources are limited.  W. Chan Kim and Renee Mauborgne advocate what they characterize as a “blue ocean strategy,” one that will enable business leaders to “break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant.” In Mark Johnson’s Seizing the White Space: Business Model Innovation for Growth and Renewal, the “white space” referred to in the book’s title “is the range of potential activities not defined or addressed by the company’s current business model, that is, the opportunities outside its core and beyond its adjacencies that require a different business model to exploit.” Advocates of these and other strategies stress the same objective: creating opportunities that others don’t.

That is essentially what Stephen Wunker also has in mind when sharing his own thoughts about how to locate, penetrate, and dominate in new markets or in new customer segments. As indicated in the Preface, he really does explore in detail “how the strategies that companies pursue in established industries often do not apply when markets are nascent. Indeed, many of the best strategies for new markets – targeting nonconsumers, entering narrowly, avoiding sales channels, and other key moves – at first can seem counterintuitive. For established firms, success in new markets may also require acting in unfamiliar and entrepreneurial ways.”

Rather than marinating his reader in theories, hypotheses, “what ifs,” and subjunctive speculation, Wunker concentrates on real-world situations, involving real business leaders of real companies, and suggests what lessons can be learned from them. These exemplar organizations include Apple, Craig’s List, eBay, Facebook, GE, Google, Monster.com, and Phillips. Throughout his lively and eloquent narrative, Wunker addresses maj0r business issues that include these:

o  Why new markets matter
o  How to find them and evaluate them
o  How to assess “what doesn’t [as yet] exist”
o  How to attract the first customers (sometimes early adopters)
o  How to identify and evaluate various “paths” to market penetration
o  When to initiate penetration and how to sustain it
o  How to take full advantage of an emerging market’s potentialities
o  How to create or strengthen a corporate competency while locating and exploiting a new market
o  The nature and extent of government’s “catalytic role”

I especially appreciate Wunker’s makes skillful use of several reader-friendly devices such as a “The chapter covers…” section at the beginning of each chapter that serves as a head’s up; and then a “Summary” at the end of each chapter that will facilitate, indeed expedite frequent review key points later. Readers will also derive substantial benefit from various “Tables” and “Figures” that consolidate valuable information and are strategically located throughout the book. In Chapters 1-3 alone, they include “Economic transformation over five decades” (Page 6), “Most Valuable Companies in the United States and a Few of Their New Markets” (7), “Moving from Product Definition to Problem Definition” (27), “Monitoring New Factors for New Markets” (40), “Platforms beget platforms” (41), “Eight drivers of fast market growth” (61), and “Deconstructing the business model” (71).

This brief commentary can only begin to suggest the scope and depth of what Wunker shares. I know of no other single source that offers more and better advice on how to locate, penetrate, and dominate in new markets or in new customer segments. He concludes thusly: “New platforms, emerging consumers, and proliferating discontinuities are opening up countless new markets even as they threaten more established ones. The pace of change will not slow down. This is the time to act.” Of course, it remains for each reader and her or his associates to determine whether or not that initiative and consequent commitment are appropriate to the given organization. Stephen Wunker can assist with making that decision

HBR 10 Must-Reads on Change: A book review by Bob Morris

HBR 10 Must-Reads on Change
Various Contributors
Harvard Business Press (2011)

This volume is one of several in a new series of anthologies of articles that initially appeared in the Harvard Business Review, in this instance from 1960 until 2006. Remarkably, none seems dated; on the contrary, if anything, all seem more relevant now than ever before as their authors discuss what are (literally) essential dimensions of organizational and/or individual change.

More specifically, why transformation efforts fail (John P. Kotter), how to achieve change through persuasion (David A. Garvin and Michael A. Roberto), what can be learned from an interview of Samuel J. Palmisano about leading change when business is good, why radical change can be “the quiet way” (Barbara E. Meyerson), what “tipping point leadership is and does” (W. Chan Kim and Renée Mauborgne), what a survival guide for leaders should provide (Ronald A. Heifetz and Marty Linsky), the real reason people won’t change (Robert Kegan and Lisa Laskow Lahey), how to crack “the code of change” (Michael Berr and Nitin Nohria), the hard side of change management (Harold L. Sirkin, Perry Keenan, and Alan Jackson), and why change programs don’t produce change (Michael Beer, Russell A. Eisenstat, and Bert Spector).

Each article includes two invaluable reader-friendly devices, “Idea in Brief” and “Idea in Practice” sections, that facilitate, indeed expedite review of key points. Some articles also include brief commentaries on even more specific subjects such as “Dysfunctional Routines” (Pages 238-29), “Tempered Radicals as Everyday Leaders” (Page 64), “Adaptive Versus Technical Change: Whose Problem Is It?” (Paged 105), “Getting Groups to Change” (Pages 124-125), “Big Assumptions: How Our Perceptions Shape Our Reality” (Pages 132-133), “Calculating DICE [duration, integrity, commitment, and effort] Scores” (Pages 166-168) and “Tracking Corporate Change” (Pages 183-184).

These ten articles do not – because they obviously cannot – explain everything that one needs to know and understand about formulating and then executing effective change initiatives. However, I do not know of another single source at this price (currently $14.41 from Amazon) that provides more and better information, insights, and advice that will help leaders to achieve success in the business dimensions explained so well by the authors of the articles in this volume.

HBR’s 10 Must Reads on Strategy: A book review by Bob Morris

HBR’s 10 Must Reads on Strategy
Various contributors
Harvard Business Press (2011)

How to create “a unique and valuable position” by deciding what to do…and not do

This volume is one of several in a new series of anthologies of articles that initially appeared in the Harvard Business Review, in this instance from 1960 until 2006. Remarkably, none seems dated; on the contrary, if anything, all seem more relevant now than ever before as their authors discuss what are (literally) essential dimensions of formulating and then executing an effective strategy.

My own opinion is that strategies are “hammers” that drive tactics (“nails) and the key is to get a strategy in proper alignment with the ultimate objectives as well as with an organization’s various activities. That said, what we have in this volume is a variety of thoughtful perspectives on strategy provide by those who are among the world’s most highly-regarded authorities on the subject.

More specifically, the reader learns how to understand what strategy is and isn’t as well as what it does and (doesn’t) do, and, how to manage/leverage the five competitive forces that shape strategy (Michael E. Porter); also, how to build a company’s vision (James C. Collins and Jerry I. Porras), how to reinvent a business model (Mark W. Johnson, Clayton M. Christensen, and Henning Kagermann), how to formulate and then execute a “blue ocean strategy” (W. Chan Kim and Renée Mauborgne), how to take full advantage of the “secrets” of effective strategy execution (Gary L. Neilson, Karla L. Martin, and Elizabeth Powers), how to use the Balanced Scorecard as a strategic management system (Robert S. Kaplan and David P. Norton), how to transform corner-office strategy into frontline action (Orit Gadiesh and James L. Gilbert), how to turn great strategy into great performance (Michael C. Mankins and Richard Steele), and gain a much better understanding of how clear decision roles enhance organizational performance (Paul Rogers and Marcia Blenko).

Each article includes two invaluable reader-friendly devices, “Idea in Brief” and “Idea in Practice” sections, that facilitate, indeed expedite review of key points. Some articles also include what I characterize as “business nuggets” in which their authors focus on even more specific subjects such as “Finding New Positions: The Entrepreneurial Edge” (Porter, Page 10), “Big Hairy, Audacious Goals Aid Long-Term Vision” (Collins and Porras, 96), “A snapshot of blue ocean creation” (Kim and Mauborgne, 130-132), “Translation vision and strategy: four perspectives” and “Managing strategy: four processes” (Kaplan and Norton, 172 & 173), and “A Decision-Making Primer” (Rogers and Blenko, 236-237).

These ten articles do not – because they obviously cannot – explain everything that one needs to know and understand about the formulation and execution of an effective strategy. However, I do not know of another single source at this price (currently $14.23 from Amazon) that provides more and better information, insights, and advice that will help leaders to achieve success in the business dimensions explained so well by the authors of the articles in this volume.

Carolyn Hoyt’s interviews of four women gurus: Marianne Williamson, Charlene Li, Renée Mauborgne and Louise Hay

Here is an extension of an article that appeared in the February/March (2010) issue of PINK magazine. Carolyn Hoyt interviews four women gurus: I have selected one Q&A for each. To read the complete article, please click here. You can also sign up for a free subscription to PINK’s e-Newsletter.

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Women are upending the whole idea of a “business guru” by transcending business as usual. These four sages deliver wisdom and wit to millions – and impact every corner of women’s lives.
By Carolyn Hoyt

Our exclusive interviews with four of the most interesting, provocative and inspirational women gurus today – Marianne Williamson, Charlene Li, Renée Mauborgne and Louise Hay – were just too good to go partly unpublished. So in addition to their conversations with us that appear in the February.March issue of PINK here are the rest of their words of wisdom.

Marianne Williamson

Marianne Williamson’s legendary success includes a first book, A Return to Love, that spent 35 weeks as America’s No. 1 favorite read, and her most recent, The Age of Miracles: Embracing the New Midlife, which hit No. 2 on The New York Times best-seller list in its first week. Last fall she spoke to packed houses in Boston, Phoenix, London, Los Angeles and New York, to name just a few. With only a single employee, Williamson’s business is basically self-run and, reflecting the beliefs she preaches, pursues a spiritual path. She has been named by major publications as one of the 50 most influential baby boomers.

Hoyt: How is your own spirituality reflected in your work?

Williamson: In many ways. I have always taken my nonprofit work as seriously as my work within the profit-making sector. In 1989, I founded an organization in Los Angeles called Project Angel Food, which basically was meals on wheels for homebound people with AIDS. More recently, I am pushing an agenda of peace, with the founding of the Peace Alliance, which supports legislation to establish a United States Department of Peace. I have always wanted to play to an audience that is like me. I want to write books or give talks which, if I were in the audience or I were the reader, I would appreciate. And there have definitely been times in my life when I knew that what I wanted to talk about was not popular in the moment. For instance, in 1998, I wrote a book about healing the soul of America at a time when my primary readership, the spiritual and metaphysical community, didn’t want to hear about politics. Today, of course, that’s changed. With issues of social activism, sacred activism, a whole new conversation has emerged, where virtue is its own reward and the ultimate high is feeling, at the end of the day, like I contributed to my community or my society, whether or not it’s popular. I think that while this decision may have been, at times, to my detriment financially, it has contributed to my stature. I have a voice in society. And I have lived enough to know that, ultimately, abundance flows from your name as well as your product.

Charlene Li

Charlene Li’s breathtaking rise as an authority on emerging technologies has garnered her a long list of accolades, including “one of the most influential people in Silicon Valley.” In October, she was keynote speaker for an event that drew more than 300 attendees, and early this year she will headline a conference that draws more than 5000. But her biggest audiences are – where else? – online. She writes several popular and influential blogs found at altimetergroup.com, charleneli.com and svmoms.com. With two young children and a new office in her home (where she has yet to purchase bookshelves), Li has a lot to say about women professionals in the 21st century.

[Note: I highly recommend her recently published book, Open Leadership: How Social Technology Can Transform the Way You Lead.]

Hoyt: What’s next for women of your generation?

Li: I see women going anywhere they want to. And I do mean want to. Because a lot of people measure success merely by position, title and salary. I think women feel comfortable enough in their own skin to put that secondary to what they want. They don’t have to define success by the measure of society. People often say to me, “How come you don’t want to be CEO of a company?” And I tell them, “I don’t want to.” I know I can do it, but I don’t enjoy it. Why does that have to be the definition of success?

I also think that women no longer have to set up a boundary between work life and home life. One of the hallmarks of my thinking is that I bring a lot of my personal life into my work. That’s a huge advantage I have over men, who may feel they have to separate the two.

Renée Mauborgne

Renée Mauborgne

Along with her co-author, W. Chan Kim, Renée Mauborgne has been called “the No. 1 guru of the future” by L/Expansion, France ‘s leading business magazine. Their book, Blue Ocean Strategy (Harvard Business School Press, 2005), ranks as the fastest-selling title in its publisher’s history. So it comes as no surprise that Mauborgne’s speaking skills are in high demand. She gave the keynote address to an audience of 5,000 at the World Business Forum in New York’s Radio City Music Hall, an event that also included speakers Bill Clinton, Jack Welch and Malcolm Gladwell. And she is a fellow of the World Economic Forum in Davos, Switzerland, the annual gathering of CEOs, political leaders and thought leaders from across the world. Mauborgne is a professor at INSEAD in Fontainebleau, France, and is also co-founder and co-director of the Blue Ocean Strategy Institute.

Hoyt: What exactly is the “blue ocean”?

Mauborgne: As new global players enter the world stage from all corners of the globe, be it China, India, Brazil or Eastern Europe, companies in most industries are finding themselves stuck in what I call a “red ocean” of bloody competition. This environment is characterized by intense competition, market-share battles, declining price points and commodization of offerings. The question is, “What will it take to thrive in this new world economy?”

My answer is to create what I call “blue oceans” of uncontested market space. Here, the aim is not to compete, but to make the competition irrelevant and create a larger economic pie. It is worth noting that historically, the focus on beating rivals fundamentally traces back to military strategy. Under military strategy, because the land on the Earth is limited and given, the only way to expand territory or market share is at the expense of another. Hence, someone’s gain can only be achieved at another’s loss. To win, you must make another lose. What the world has shown us, however, is that while the land on Earth may be limited, the ‘blue ocean’ of new market space that can be created and captured is unlimited. Just think of how many multimillion- and multibillion-dollar businesses exist today that did not exist even 30 years ago: cell phones, biotechnology, snowboards, ring tones, social networking sites, search engines … tooth whitening!”

Louise Hay

Louise Hay

Louise Hay’s first book, Heal Your Body, started as a 12-page pamphlet but has since been translated into 25 languages. That kind of meteoric rise is the story of her entire career – which started in counseling in the early 1970s before growing into a veritable self-help empire, anchored by her publishing company, Hay House. Hay’s charitable offshoots – the Hay Foundation and the Louise L. Hay Charitable Fund – channel millions to people living with AIDS, battered women and other “challenged individuals” in society. Her monthly column, “Dear Louise,” appears in more than 50 worldwide publications. And she’s been dubbed the “Mother of the New Age,” the “Queen of Affirmation” and, in the Australian media, “the closest thing to a living saint.”

Hoyt: What are we forgetting as we focus more than ever on advancement?

Hay: Ourselves. How to fulfill ourselves. How to make ourselves happy. We get too caught up in the moneymaking part of life. My own biggest concerns are to stay healthy and happy. I think the business will take care of itself and, when I put that thought out into the world, it happens. My company is absolutely growing and growing and growing. We do seminars, sometimes, for 7,000 people. These are people, predominantly women, who are seeking, who want to know more, who want to improve the quality of their lives, who want to find themselves.”

I like to think about legacies. In this life, we all should leave a legacy. I didn’t enter this whole world until I was in my 50s, when my first book was published. Now I’m 81 and having an absolutely wonderful time in life. Recently a rose was named after me – an apricot hybrid. It is so beautiful, and long after I’m gone this rose will be around bringing beauty to the world. I like that idea very much.

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“It’s tempting to think that decisions that are not life-and-death are therefore unimportant, and that the little compromises we make don’t matter to our bottom line or our spiritual selves. How many of us are tempted, in business, to make a less-than-ethical decision? To appropriate someone else’s idea or fudge some numbers? We have to remember that maintaining our ethical and spiritual selves is absolutely linked with achieving the degree of success we’re working toward.” Marianne Williamson

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To read the complete article, please click here. You can also sign up for a free subscription to PINK’s e-Newsletter.

The Ten Faces of Innovation: A Book Review by Bob Morris

The Ten Faces of Innovation: IDEO’s Strategies for Defeating the Devil’s Advocate and Driving Creativity Throughout Your Organization
Thomas Kelley with Jonathan Littman
Doubleday (2005)

I recently re-read two books written by Tom Kelley with Jonathan Littman, this one and The Art of Innovation. In both, Kelley provides a wealth of information and counsel which can help any decision-maker to “drive creativity” through her or his organization but only if initiatives are (a) a collaboration which receives the support and encouragement of senior management (especially of the CEO) and (b) sufficient time is allowed for those initiatives to have a measurable impact. There is a distressing tendency throughout most organizations to rip out “seedlings” to see how well they are “growing.” Six Sigma programs offer a compelling example. Most are abandoned within a month or two. Why? Unrealistic expectations, cultural barriers (what Jim O’Toole characterizes as “the ideology of comfort and the tyranny of custom”), internal politics, and especially impatience are among the usual suspects. That said, I agree with countless others (notably Teresa Amabile, Clayton Christensen, Guy Claxton, Edward de Bono, Peter Drucker, W. Chan Kim and Renée Mauborgne, Michael Michalko, Michael Ray, and Roger von Oech) that innovation is now the single most decisive competitive advantage. How to establish and then sustain that advantage?

In an earlier work, The Art of Innovation, Kelley shares IDEO’s five-step methodology: Understand the market, the client, the technology, and the perceived constraints on the given problem; observe real people in real-life situations; literally visualize new-to-the-world concepts AND the customers who will use them; evaluate and refine the prototypes in a series of quick iterations; and finally, implement the new concept for commercialization. With regard to the last “step”, as Warren Bennis Patricia and Ward Biederman explain in Organizing Genius, Apple executives immediately recognized the commercial opportunities for PARC’s technology. Larry Tesler (who later left PARC for Apple) noted that Jobs and colleagues (especially Wozniak) “wanted to get it out to the world.” But first, obviously, the challenge was to create that “it” which they then did.

In this volume, as Kelley explains, his book is “about innovation with a human face. [Actually, at least ten...hence its title.] It’s about the individuals and teams that fuel innovation inside great organizations. Because all great movements are human-powered.” He goes on to suggest that all good working definitions of innovation pair ideas with action, “the spark with fire. Innovators don’t just have their heads in the clouds. They also have their feet on the ground.” Kelley cites and then examines several exemplary (“great”) organizations that include Google, W.L. Gore & Associates, the Gillette Company, and German retailer Tchibo. I especially appreciate the fact that Kelley focuses on the almost unlimited potential for creativity of individuals and the roles which they can play, “the hats they can put on, the personas they can adopt…[albeit] unsung heroes who work on the front lines of entrepreneurship in action, the countless people and teams who make innovation happen day in and day out.”

Because organizations need individuals who are savvy about the counterintuitive process of how to move ideas forward, Kelley recommends three “Organizing Personas”: The Hurdler, The Collaborator, and The Director.
Because organizations also need individuals and teams who apply insights from the learning roles and channel the empowerment from the organizing roles to make innovation happen, Kelley recommends four “Building personas”: The Experience Architect, The Set Designer, The Caregiver, and The Storyteller. Note both the sequence, interrelatedness and, indeed, the interdependence of these ten “personas.”

What Kelley achieves in this volume is to develop in much greater depth than do von Oech and de Bono what are essentially ten different perspectives. He does so, brilliantly, by focussing the bulk of his attention of those who, for example, seek and explore new opportunities to reveal breakthrough insights…and while doing so wear (at least metaphorically) one of de Bono’s hats (probably the green one). Kelley devotes a separate chapter to each of the ten “personas,” including real-world examples of various “unsung heroes who work on the front lines of entrepreneurship in action, the countless people and teams who make innovation happen day in and day out.”

Mark Johnson on the power of new Internet-driven business models

Seizing the White Space

In Seizing the White Space: Business Model Innovation for Growth and Renewal published by Harvard Business Press (2010), Mark Johnson discusses several new Internet-driven business models that have “brought many old-guard industries to their knees.” Here are three examples:

Encyclopedia Britannica, first challenged by Encarta by a combination of Wikipedia (contributed content) and Google (search engine to verify and improve quality of content).

The travel agency industry, disrupted by online competitors (e.g. Expedia and Travelocity), aggregators (e.g. Kayak and Travelzoo), and advice sites (e.g. Trip Advisor)

Most conspicuously, the newspaper industry, comprised of companies that saw the Internet as a threat rather than a source of opportunities for growth. “The devised no new customer value propositions. They conceived of no new revenue models (or other ways to change their profit formula). Instead, they merely took the look and feel of the newspaper and put it online, stretching thin the resources and processes of their existing model.” Newspaper companies have also been diminished by Google News, Drudge Report, and the Huffington Post (segmented and democratized news content and commentary) as well as by Craigslist and Recycler (classified ads) and Yelp and Chowhound (local food and entertainment expertise). Substantial numbers of readers and advertising dollars have been lost.

Here three of Johnson’s most important points:

1. A “white space” is “unchartered territory or an underserved market” in which new and different opportunities reveal themselves to those who recognize them.

2. Technology does not create profitable disruption; rather, profitable disruption is created by those who use technology most effectively.

3. Entering white spaces with new technologies requires a new business model, one that will facilitate, support, and sustain initiatives that are not defined or addressed by a company’s current business model.

In certain respects, Johnson offers development in greater depth and refinement with broader scope of W. Chan Kim and Renée Mauborgne’s “Blue Ocean Strategy,” introduced in an HBR article (October 2004) and then expanded in a book (2005).

The First Friday Book Synopsis – a Blue Ocean Strategy in a World of Competing Book Clubs

The phrase “book club” is thrown around a lot.  And I am learning it has a number of different meanings.

For example, there are two different “TED” book clubs.  One is for the people who attend the actual, original TED conference.  They each receive a stack of books periodically.  They are then left to their own devices, to read them as they wish.  This is version one of the TED book club.  The other TED book club is a local event, here in Dallas called the TEDxSMU Book Club Meet Up.  People who attend are asked to read (expected to read!) one book before the gathering.  For the gathering in April, the book will be This Will Change Everything by John Brockman.  This is a wonderful, good, challenging book club.  “Everyone read in advance, and let’s discuss the implications of the book” is the agenda.

I remember back in my full time ministry days, I started a book club.  It was a hand-picked, small group of “young/future leaders.”  I gave them each a copy of the book I selected.  They each had to read the book.  Then, each person had to “present” one chapter of the book to the group, and lead a discussion.  It was a very workable, terrific approach.  It went really well.
For the first book.
By the end of the run (about the sixth book), I got the distinct impression that the only person really reading the material was the person reading the chapter he/she was responsible for presenting.

If the TED folks actually all read the book, this will be quite an accomplishment.  They might – TED folks are highly motivated.

But here is a frequent problem for book clubs.  It is common for a CEO, or a top level leader, to convene a book club within a company or organization, give everyone a book, and ask/expect them all to read it and discuss it.  And I know, for a fact, that a high percentage of the participants in such “book clubs” actually barely skim the book before the meetings.  I’ve heard this told, in many ways, over and over again (including from many participants who admitted this to me).

The fact is that most people wish they read more books, intend to read more books, but don’t actually read many books.  I can’t find good/reliable figures on this, but one study once quoted this finding:  among the college educated men (it was a survey of men only), these men actually averaged reading only one book a year (excluding the reading of Tom Clancy or John Grisham type books).

This is what makes the First Friday Book Synopsis a blue ocean event.  It is the only book club I know of where the participants do not have to read the books/are not expected to read the books in order to participate.  Karl Krayer and I read the books for you.

Is it the same as reading the book for yourself?  No, it is not.  It is not as good, and it is better.

It is not as good, because the best way to get the most out of a good book is to read it slowly.  (There is actually a book entitled How to Read Slowly:  Reading for Comprehension by James W. Sire).  For the books that most matter to you, you really should read them slowly enough to get the most out of them, to savor them, to ponder the implications and plan ways to implement its truths and suggestions.

It is better, because you probably have not looked for a book’s thesis, major points, and transferable principles since your last college assignment.  So Karl and I will extract these from the books for you, and you get the benefits from the books without having to actually spend the time reading the books.

Yes, the First Friday Book Synopsis is a new kind of book club – the only one I know of where you do not need to read the book in order to participate.

In our busy world, I think this is a pretty good, valuable, offering.  It is a Blue Ocean book club.

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One of the books I presented at the First Friday Book Synopsis was Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim and Renée Mauborgne.  You can purchase my synopsis of Blue Ocean Strategy, with audio + handout, at our companion web site, 15minutebusinessbooks.com.

A Blue Ocean Strategy for 2010, a new year/a new decade

It’s crowded out there.  Everyone feels some form of competition breathing down their back.  In the imagery made popular by the authors of Blue Ocean Strategy, we work in too many “red oceans,” with too many people trying to reach the same customers/clients.

The solution – a blue ocean strategy.  Here are a few key quotes from the book:

Cirque du Soleil succeeded because it realized that to win in the future, companies must stop competing with each other.  The only way to beat the competition is to stop trying to beat the competition.

Blue oceans are defined by untapped market space, demand creation, and the opportunity for highly profitable growth.

In blue oceans, competition is irrelevant because the rules of the game are waiting to be set.

In increasing numbers of industries, supply exceeds demand.  The business environment in which most strategy and management approaches of the twentieth century evolved is increasingly disappearing.  As red oceans become increasingly bloody, management will need to be more concerned with blue oceans than the current cohort of managers is accustomed to.

Here’s the strategy – create new markets.  Competing for old ones is a  “yesterday” strategy.  Create your own markets in brand new territory – this is the blue ocean strategy.

• Red Ocean vs. Blue Ocean Strategy

Red Ocean Strategy	Blue Ocean Strategy
Compete in existing market space	Create uncontested market space
Beat the competition	Make the competition irrelevant
Exploit existing demand	Create and capture new demand
Make the value-cost trade-off	Break the value-cost trade-off
Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost	Align the whole system of a firm’s activities in pursuit of differentiation and low cost

Seldom have I felt people as ready to put the past year/the past decade behind them.  We long for a new start.  A new start – a blue ocean – for a new year and a new decade.  For the new year, I ask a simple question – what is your blue ocean strategy for 2010?

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You can purchase my synopsis of Blue Ocean Strategy, with audio + handout, at our companion web site, 15minutebusinessbooks.com.

(The Woes of MySpace) The Future is Utterly Predictable — it is a Future of Constant Innovation

Boy, those old staid companies sure do get in trouble because they fail to innovate.  Yes, the times are changing, and companies better learn how to stay fresh, keep improving, keep changing.  When they’ve been around forever, it is awfully easy to get set in their ways, and watch the competition sweep right on by them.

Take that old venerable company known as MySpace.  It has been around forever.  It was way back in August, 2003 when they launched.  Times were different then.  And what they set in place back in those long-gone days just doesn’t seem to work anymore.  So the CEO Owen Van Natta, in a letter to his employees in which he announced and explained the decision to lay off 30% of their workers (400 workers), included this sober assessment:  ”We need to become a more innovative company.” (read about the layoffs here, and the entire letter from the CEO here).  (Here’s a little more of his letter:  ”The future success of MySpace is dependent upon us operating as a nimble and entrepreneurial company with the adaptive mentality of a start-up…  I believe this is the first difficult step toward a major turnaround – a step that will not only shore us up in the short term, but position us for long term success. We need to become a more innovative company.  Becoming more innovative is an ongoing responsibility for all of us, not a one-time effort”).

It does sound a little ludicrous, doesn’t it?  I mean, I can understand that a company as old and established as GM might get a little behind in the innovation contest.   But MySpace?  This company is only six years old.  It’s been less than six years ago that you could not have built your own MySpace page.  And yet, here it is in stark, sobering words:  ”We need to become a more innovative company.”  Competitors like Facebook, and now Twitter, have just swept right on by MySpace because they are more innovative.  Who would have thought?

We should have known it was coming.  We’ve been warned.  The business books of the last 12 years have all said it, loud and clear.  The future is coming, and it’s going to be different from the past.  Constantly different.  Perpetually innovating.  The world is changing faster and faster and faster…  Here’s just a sampling of quotes:

“If it seems like your world has been topsy-turvy over the past few years…  Consider what’s coming…  Technology is not kind.  It does not wait.  It does not say please.  It slams into existing systems, and often destroys them – while creating a new system.”  (Juan Enriquez, As the Future Catches You).

“It’s finally happened.  I’ve seen a company where I can imagine working!”  Innovation is it, for the foreseeable future…”  {Tom Peters, from the foreword}.  (Tom Kelley, The Art of Innovation:  Lessons in Creativity from IDEO, America’s Leading Design Firm).

“You want to wake up your organization to the need for a strategic shift and a break from the status quo.”  (W. Chan Kim and Renée Mauborgne,  Blue Ocean Strategy:  How to Create Uncontested Market Space and make the Competition Irrelevant).

“Even the world’s “most admired” companies aren’t as adaptable as they need to be, as innovative as they need to be, or as much fun to work in as they should be…  To put it bluntly, management innovation pays…  Remember the old saw about the tendency of generals to refight the last war rather than the one at hand?”  (Gary Hamel, The Future of Management).

“The premise of this book is a simple one:  that breakthrough innovations come by recombining the people, ideas, and objects of past technologies.  The implication, recalling William Gibson, is that the future is already here – it’s just unevenly distributed.”  (Andrew Hargadon, How Breakthroughs Happen:  The Surprising Truth About How Companies Innovate).

“When it comes to thriving in a hypercompetitive marketplace, “playing it safe” is no longer playing it smart…  the more you do something, the more important it is to challenge the assumptions and habits that built your success so as to generate a wave of innovations to build the future…  Remember, the most effective leaders are the most insatiable learners. (William C. Taylor and Polly LaBarre,  Mavericks at Work:  Why the Most Original Minds in Business Win).

“To change is to take a risk – to give up a current state in an attempt to reach a potentially more desirable one.  We tend to resist change…  In this new (postmodern or post-Web corporate world) hypercompetitive environment, market transitions are a lot faster, and the cycle of innovation has gotten increasingly shorter…  new products and services started appearing more and more frequently, resulting in even more competition.  (including:  real-time information).  Reengineering found itself outdated.”  (Benham N. Tabrizi, Rapid Transformation:  A 90-Day Plan For Fast And Effective Change).

“I held only positions that did not exist before I had them…  Conceptualizers see the future.”  (Robert Greenleaf, Servant Leadership:  A Journey into the Nature of Legitimate Power and Greatness).

Everyone needs to think differently about the future, a future that is riddled with change, challenge, and risk.  It is a new kind of future, not the steady plodding of progress from one moment to the next, punctuated by brief bursts of innovation that characterizes much of history.  Now we face a post-9/11 future.  The future of our lives, of our work, of our businesses – and most of all, the future of our world – depends on us gaining a new understanding of the dizzying changes that lie ahead.  I call this future-readiness…  The coming Innovation Economy will herald an age of rapid, dramatic change, one in which ideas that create value, offer solutions, and fulfill needs will thrive, sweeping into the recesses of memory the comparatively primitive ideas, products, services, and processes that came before.  Innovation will be the prime source of productivity, prosperity, competition, and potentially even peace.  Innovation will be recognized as an empowering force that will drive individual prosperity and global competition.  (James Canton, Ph.D., CEO and Chairman, Institute for Global Futures, The Extreme Future:  The Top Ten Trends That Will Reshape the World for the Next 5, 10, and 20 Years).

“Never get comfortable with where you are.  Anticipate the inevitability of having to modify or change how you do business to meet your customers’ needs…  Organizations that refuse to change their methods to meet demands are likely the same stubborn organizations that are slowly going out of business.  Change is never over, said Jack Welch.”  (Ron Hunter Jr. & Michael E. Waddell, Toy Box Leadership:  Leadership Lessons from the Toys You Loved as a Child).

So, let’s all let the MySpace story be an object lesson for us all.  If we are not constantly innovating, the competition will simply pass us by.  Remember the warning from Gary Hamel:”  Every business is successful — until it’s not.”

(To purchase my synopses of many of the books quoted, with handout + audio, go to our 15 Minute Business Book site).