Blue Ocean Strategy: Book Review/J. Colannino

This book was initially written in 2005 and enjoyed success.  This is my first opportunity to read it.  Based on what I have observed, I think I will place a 5-year moratorium on reading any new book on management or business practice; it is much easier to separate the B.S. from the peanut butter that way.  Management has been around as long as societies have been around as a cursory reading of Genesis will attest.  Let us call management the world's second oldest profession, the first being, of course, agriculture.  (I hope you knew that.)  Since human nature does not appear to have changed, I think that management books should be read with particular suspicion, and in the case of this book, deservedly so.

The central them of the book is that one should create new markets (blue ocean) rather than slugging it out in existing markets (the red ocean).  But most of the book is tautology.  For example, Kim and Mauborgne argue that one should use a "strategy canvas" to assess the competitive landscape.  The strategy canvas is a central tool in Blue Ocean.  It comprises a categorical abscissa on which are listed subjective customer benefits and an ordinate that measures the degree of achievement for each category.  The authors can call this an analytic; I believe that it is too non-quantitative to be exceptionally useful.  But my main objection is that the categories themselves are nebulous, useless, or worse -- leading to an errant conclusion.   For example, let us revisit the circus. 

What categories should we place on the horizontal axis?  Well, before Cirque du Soleil existed, we may have placed items like ticket price, entertainment value, number of acts, quality of acts, act variety (animal, flying trapese, clown...), etc. on our strategy canvas.  Now scoring each of those, Ringling Bros. was the best game in town.  The only problem was that customers didn't care about most of the items.  The 3 different rings were distracting, the animals were smelly (or viewed as evidence of cruelty), the high priced performers were unknown to the average customer, etc.  The only reason most adults went to the circus was to take their children.  With that kind of strategy canvas, I would have been tempted to offer free school bus rides to kids as a major innovation.  Cirque du Soleil transformed the circus to an event for adults with no animals, a vague but central storyline, a theater-like experience, ethereal music, and beauty and artistry that celebrated human beings in motion.  When Kim and Mauborgne placed those items on the strategy canvas, then Cirque du Soleil became the clear winner.  But the analysis was done post hoc.  No one knew that such items should even be scored until the Cirque du Soleil strategy became successful.  Using an outcome to inform the question is question begging at its purest.

Another objection I have is that the categories are open to manipulation.  Anyone who thinks that they will be able to use a strategy canvas to convince a refractory management to change their ways will just find themselves in an argument over what belongs on the category axis.  In the end, the strongest proponents -- the very ones steering the ship into the nighttime ice -- will be the ones deciding what categories should be scored.  And surprise, the status quo will win and be more justified than ever in staying the course.

What I have learned over the years is that customer value is subjective and that innovation comes from visionaries (not the customer).  What one needs for success is for visionaries that know their markets and customers and are cogent and capable to persuade management to do the right thing.  And no book is going to create a persuasive visionary.  Visionaries are born, not made.  To paraphrase Robert Mitchum, one might as well go to school to learn how to be tall.  To find persuasive visionaries requires excellence in talent selection, because they need to come from the outside.  That fault lies with the refractory organization, not its internal visionaries.  Steve Jobs would have been fired from Apple long ago if he weren't their CEO.  In fact, he was fired even though he was their CEO.  But Apple wasn't worth anything without him.  Visionaries see the world a different way so it takes a superlative management team (or a desperate one) to embrace them.

Notwithstanding, the book finishes better than it starts with recommendations for how to navigate organizations to blue ocean in spite of themselves. To that end, Kim and Mauborgne have the following suggestions.  Overcome the cognitive hurdle by exposing upper management to the pain of the customer through direct engagement.  Mobilize a critical mass of resources by horsetrading with other leaders.  Find the critical mass of managers ("kingpins") who will ally with you, and enlist their support early.  Once you have enlisted support of key management, make measures visible to all ("fishbowl" management; I would call this aligning incentives.) As for executing the strategy, persuade downstream personnel using a "fair process" that openly engages employees, shows them why the new strategy is in their best interest, answers their questions, and resolves their fears.

These are contained in Chapters 7 and 8; and besides reading the Chapter 1 for context, these are the only chapters worth reading and the only reason I (barely) recommend the book.