Blue Ocean Strategy in the Real World:

Although Pocket MBA didn't realize it at the time, the advent of this space was kind of Blue Ocean-y. Sure there are a bazillion financial glossary-style resources, but one geared exclusively toward lawyers? One that created a place where lawyers could go and not feel uncomfortable saying, "I don't know what my business clients are talking about. Burn rate? OK, a birthday candle goes out in about 10 minutes or so." This newsletter stepped into a market void and filled it, and seven years later, we have a substantial Pocket MBA community. Not bad. Of course, we're kind of small potatoes, and the newsletter is free. But in a world where profits are harder and harder to come by, more and more companies are urgently trying to distinguish and transform themselves by giving up on fighting for a percentage point of market share and shifting to an effort to find a space that can be dominated because nobody else inhabits it. So when your clients talk about getting out of the red ocean (crowded space) and into the blue ocean (uncontested space) and how they will do it (their "Blue Ocean Strategy"), that's what they mean.

Blue Ocean Strategy is a framework for innovation and business dominance developed and outlined in the best-selling book Blue Ocean Strategy: How to Create Uncontested Market Space, by W. Chan Kim and Renée Mauborgne (Harvard Business School Press 2005). While the concept of finding an untapped market to dominate is as old as business itself, the two INSEAD (Institut Européen d'Administration des Affaires) professors have created a worldwide sensation by boiling it down to a corporate way of life. And, in a recent interview with Forbes India, Professor Mauborgne stated emphatically that in the wake of the financial meltdown of the last two years, "it is more imperative than ever for companies to shift their attention and efforts... [from] dividing existing demand to creating new demand in order to embark upon the path of profitable growth and lead themselves and the world out of the crisis." So this remains cutting edge business theory for your clients. Pocket MBA encourages you to pick up a copy of the book, or you can learn a lot just by visiting the Blue Ocean website. The book and strategy are a result of studying "150 strategic moves spanning more than a hundred years and thirty industries."

In brief, what is a Blue Ocean Strategy for success? How does a company go from making widgets fighting a dozen other widget makers tooth and nail for market share to being an Apple, Cirque du Soleil or Gillette, which as the authors of the book would say, have fans, as opposed to customers? How does a company know if it is already operating in a blue ocean as opposed to a red ocean filled with the blood of it and its competitors? The first thing to remember is that the "aim of BOS is not to out-perform the competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant."

For a company to determine where they stand currently, the authors pose a list of questions. Answering "yes" to all or most means you are a red ocean company. The questions range from "Is your company focused more on cost cutting, quality control, and brand management at the expense of growth, innovation, and brand creation?" to "Do you blame your slow growth on your market?" to "Are mergers and acquisitions the principal means your company sees to grow?" Finally, they instruct companies to list their "key competitive factors" along with those of their competitors. If they are the same..., well, you get the idea.

A blue ocean strategy is simply one that gets you out of that paradigm where the answers to all the questions are "yes." Often easier said than done, and some companies do it by accident. In fact, that is historically how it has happened. What BOS does is to systematize what is otherwise done unconsciously. Everyone wants to bust out and lead the pack, but if you don't see an obvious opportunity, you fall back into the same routine of scraping for market share. Sometimes it's as simple as looking at the market for a company's product in a different light: "By questioning conventional definitions of who can and should be the target buyer, companies can often see fundamentally new ways to unlock value."

Thus Cirque du Soleil, a feature on the BOS website, took the concept of circus ("you get the kids; I'll get the car...oh, look a sad clown...zzzzzzzzzz") and recreated it by targeting a new audience (adults and corporate) with updated- and technologically-advanced versions of the same stuff you'll see at Ringling Brothers. You cannot go to a show by Cirque du Soleil and not leave thinking you've seen something completely different. And yet, if you look at the fundamentals — tumbling, tightropes, trapeze, clowns — it's still a circus. But you can be sure that PMBA will be at the next Cirque du Soleil show in NYC, even though it wouldn't think about going to the traditional circus. (Worst birthday present PMBA ever received? Tickets to the regular circus for birthday number 24.)

Pocket MBA can't convey much more without violating BOS' intellectual property. But there is apparently no industry that isn't ripe for a BOS. The BOS website highlights the transformation of the New York City Police Department as having executed a BOS as it transformed New York from a notorious crime center to a place where you have to be pretty unlucky to get mugged. So while we focus on BOS for companies, who knows, it may be possible for a law firm to create a blue ocean. PMBA hasn't thought that out yet; then again, PMBA doesn't have a firm. But you do. Maybe it's time to take a dip in a different ocean.

Reprinted from a PLI newsletter: About Practice Law Institute (PLI)

PLI is a non-profit continuing legal education organization dedicated to providing the legal community with the most up-to-date information available. Founded in 1933, PLI's continuing mission is to enhance the professionalism of attorneys and other qualified persons by providing, in a cost effective manner, the highest quality and most innovative programs, online CLE, publications and other services to enable them to practice law competently and ethically, and to fulfill pro bono responsibilities. We offer more than 250 programs annually in locations across the U.S., including live webcasts, specialized in-house training programs, interactive multimedia, web programs, course handbooks and annually supplemented treatises. In addition, PLI annually awards over 3,000 full and partial scholarships to our programs. Learn more about PLI at www.pli.edu.

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[Blue Ocean Strategy trainer]

By applying six basic principles of strategizeblue to generate systematically minimize risks and maximize opportunities so that your company's competition becomes irrelevant.