The Blue Ocean Strategy is highly related to process innovation. The idea of this strategy is to build new businesses where none existed before. So-called Blue Ocean industries are more profitable than traditional business fields with head-to-head competitors. In the Blue Ocean strategy, you must offer your customers a value innovation (i.e. tangible product or service advancements) accompanied by demonstrable savings. To be able to do that, you have to look at your process innovation from a new perspective. Let’s revisit the six steps of the Blue Ocean strategy from a process point-of-view.
Reconstruct market boundaries – in a Blue Ocean strategy you must re-evaluate the premises that form your industry’s assumptions and shape your company’s business model. Easiest way to do that is to think: where does the process start for your customers and where does it really end. That does not only lead to expanded value chain, but also into completely new markets. Think about for example Ryanair, which is not only flying people, but also providing the whole holiday experience with accommodation and car rentals included. Holiday does not start and end for people when they fly (that is how traditional airlines used to think)…
Focus on the big picture – Keep your eye on the overall view and don’t get lost in the statistics. Many business strategists get lost in the data jungle, so they often miss where they – and their competition – are headed. You have to think what your customers really need from you and how your organization can provide them successful outcomes. Ask yourself every week: what do we have in our business processes that customers are not benefiting from.
Reach beyond existing demand – Businesses naturally focus on current customers, a process that invariably leads to greater market segmentation analysis. But, real growth lies beyond existing demand. To get to the open water, focus on potential future customers. Apple did not satisfy with just creating new versions of iPhone, they reinvented how people work with portable devices by introducing iPad. That for sure created them new reaches beyond traditional smartphone markets.
Get the strategic sequence right – Execute your strategy sequentially to achieve your value innovation. To be compelling, the technology must provide convenience, safety and entertainment. It has to make your customer’s life easier, simpler and more successful. Plan the experience you want buyers to have at all stages. Assess your service’s or product’s usefulness, ease, handiness, safety, entertainment value and environmental friendliness in light of how each factor affects the customer upon buying it, bringing it home, using it, adding to it, keeping it working and eventually, disposing of it. Remember that the customer experience is the process.
Overcome key organizational hurdles – Successful execution demands that your organization must resolve internal departmental differences. If you are still working in silos, try to create process bridges over them so that in the eyes of the customer you offer products and services as a one, solid company. Do not let your internal politics, bureaucracy, silos or other things get in the middle of you providing perfect customer experience every time.
Build execution into strategy – Reduce your management risk by incorporating Blue Ocean implementation into your organization’s ongoing processes. Make providing great customer experiences your main business. Teach people to think out of the box all the time and make sure that they are empowered to improve the processes. Make problem solving a team effort that everyone wants to participate in. If you do not build execution of great customer experiences part of your organization’s strategy, people will never do it. You can ask that for example from Zappo’s who are not just selling shoes, but are providing over the top customer experiences.
To succeed in Blue Ocean strategy, a value innovation must demonstrate actual savings and an appreciable benefit that a customer can use immediately. Your organization has to be able to fulfill the needs of your customers consistently all the time. The idea of Blue Ocean strategy is to build new businesses where none existed before and best way for you to do that is to start thinking about your processes from customer perspective.
Here are some reflective questions that you may ask:
- Are your organization’s market boundaries clear to you?
- Do you understand where your customer’s market boundaries are?
- Are you playing with numbers or seeing the big picture?
- Do you understand where demand for services and products in your target customer groups come from?
- Are you able to work together as a team towards a common goal or does internal hurdles slow you down?
- Is providing exceptional customer experiences built into your organization’s strategy?