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How to identify and manage a strategy that yields new value.
Jimmy Johnson, former NFL player, coach and broadcaster, claims leaders must make an organisation extraordinary and remarkable. He writes in his book, Turning the Thing Around, “The difference between ordinary and extraordinary is just that little extra” (Johnson, 1994).
In his book, Purple Cow, Seth Godin claims that you can transform your business by being remarkable. Using the metaphor of cows, Godin says, “You’re either a purple cow or you’re not. You are either remarkable or invisible. Make your choice” (Godin, 2003).
When you have a mind for strategy you can develop a strategic plan that pinpoints new value through identifying and constructing competitive differentiators that will make you or the organisation stand out among its competitors.
The architecture of this plan is based on an estimate of what is possible in an ideal future and comparing this with present conditions. The gap between the two represents the purpose and passion needed to bring an ideal future into reality.
The plan includes a description of mission, vision and values. These define how to pursue success and significance and in so doing make a positive difference to yourself, your immediate stakeholders and the larger community.
The Mission defines the reason for being. Tits important to link the mission to greater issues. In this way, it becomes significant and remarkable in the eyes of the stakeholder community.
Consider Coca Cola. In 1886, Coca Cola was an unremarkable business, selling “medicinal” drinks for headaches or exhaustion through pharmacies. To become extraordinary and remarkable, they had to widen their business interest to selling what has become the world’s most popular cool drinks. Today, Coca Cola do not even refer to ‘cool drinks’. Their mission is to “Refresh the world; inspire moments of optimism and happiness and create value, making a difference wherever they engage” (Cola, 2015).
Then consider the motorcycle market. Harley Davidson and BMW are ordinary and unremarkable as a means of transport for commuters. However, if their mission were to provide access to a life of adventure, they become extraordinary and remarkable. Harley Davidson’s current mission is “Fulfilling dreams of personal freedom” (Davidson, 2015).
The next item is to invent or reinvent the vision and not be limited by past or present circumstances. The vision must be able to peer around peer around the metaphoric corners of the future. It needs to be big, bold and ballsy. At this point you must have no idea how to achieve it, if this vision does not scare you, it is not big enough.
Consider the metaphor of Blue Oceans, which I gleaned from Professor Chan Kim’s book, Blue Ocean Strategy. He writes about developing a strategy that results in uncontested market space. In this space, the opposition becomes irrelevant (Kim, 2005).
I do not believe it is possible to find Kim’s uncontested utopia or to have a scenario where opposition becomes irrelevant. However, I do agree that we should navigate towards ‘Blue Ocean’ space as a directional imperative.
Kim explains that we mostly operate in highly contested Red Oceans, whereas Blue Oceans have little competitor activity. My summary of being in a Red Ocean is a space where one’s energies are fuelled by fear and anxiety. Stakeholders pressurise us into behaving reactively with unrealistic expectations, creating a constantly distressed environment. In this Red Ocean, you have an eroding competitive advantage; the market space becomes more crowded and price wars dominate. The result of being in this Red Ocean is eroding profits and very little growth. Red Ocean strategy emphasises managing, lowering your costs and survival by beating the opposition.
In contrast, Blue Oceans imply a utopian space, where passion and purpose rule as energy sources. Stakeholder expectations are managed proactively and outlier requirements can be managed with empathy.
My understanding of embarking on a Blue Ocean strategy is that it starts with a mindset change within the organisation. The quest is to convert existing Red Oceans into Blue Oceans through constructing unmatchable competitive differentiators that cumulatively serve as a value proposition.
However, we must be mindful as we approach a Blue Ocean utopia – it may be disturbed and contaminated by our approach (borrowing from quantum physics theories) and disturbed by others who follow us, seeking the same bliss. I am not put off by this. Instead, I accept it and still feel encouraged by it.
Blue Oceans create opportunities for strategic pricing, accompanied by business and individual growth. Blue Ocean strategies emphasize leading and thriving. The organisation migrates from a mainly competitor focus to a multiple bottom-line driving force. This is accompanied by ushering in new technology and embracing innovation and improvisation.