This session on going outside traditional markets was facilitated by Paul Kingsly of Thunderbird
Red ocean opportunities are known, existing markets with multiple participants trying to differentiate themselves or compete on low price. Blue ocean opportunities are new ones which you create and which make the competition irrelevant. In red oceans; you sell to existing customers; in blue oceans; you sell to new customers. Examples of blue ocean firms are Southwest, Yellow Tail Wine, Ryanair, and Netflicks.
Another example is Cirque du Soleil. The founders asked, “Who is not a customer of circuses?” Ringling Brothers and other traditional circuses competed on price, animal shows, and concessions. Cirque du Soleil found an opportunity which was different from the existing circuses. The company created a fancy tent and musical themes, but eliminated the high cost elements: the star performers, animals, and concessions.
The book “Peripheral Vision” by Schumacher states that in red oceans, people look straight ahead. Peripheral vision in red oceans looks for dangers. People should be looking for opportunities on the periphery as well. That’s blue ocean thinking.
How do you look at the edge of your business?
• Balance active scanning vs. unidirectional searching
• Constantly be looking for new sources of intelligence
• Active probing; what exactly do you do when you probe? Look for reactions as you dig deeper
Each table then held a discussion. Ours ranged from issues to solutions.
Some organizations have set up groups to go beyond the standard red ocean thinking:
• GD has a group of engineers watching advanced communications trends. Also, has sandbox funds
• GE brought futurists in, has innovation pipeline, senior people in business unit are on innovation committee
• Monitor patents and small technology start-ups
• Devote part of organization to new ventures. Must bring strategy and CI folks together in one room
The group came up the following ideas to foster blue ocean thinking:
• 3M and Google both allow employees to spend part of time on “out-of-box” thinking and exploring new ideas
• Finding a stakeholder
• Growth assessments
• Go one level up in market space
• Think differently: Southwest Airlines is not an airline; it provides transportation. Cirque du Soleil is not a circus; it provides entertainment
• Get the right people involved, including right brain vs. left brain people
• War gaming
• Blur the line between customers and competitors
• Focus on customer needs
• Interview thought leaders
• Observe carefully at trade shows
Other CI issues mentioned were:
• Scenarios; define your worst nightmare. What characteristics does it have?
• Technologies for CI that can be used include JIVE, wikis, and sharepoint, but be careful about who has access
• Toughest issue is age of information
• Poll senior leaders on what they want
• How to disseminate information, particularly if pieces are in different buckets