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by
W. Chan Kim
Read between
August 6 - August 26, 2018
By violating fair process in making and rolling out strategies, managers can turn their best employees into their worst, earning their distrust of and resistance to the very strategy they depend on them to execute.
When individuals feel recognized for their intellectual worth, they are willing to share their knowledge; in fact, they feel inspired to impress and confirm the expectation of their intellectual value, suggesting active ideas and knowledge sharing.
If individuals are not treated as though their knowledge is valued, they will feel intellectual indignation and will not share their ideas and expertise; rather, they will hoard their best thinking and creative ideas, preventing new insights from seeing the light of day.
It’s as if they were saying, “You don’t value my ideas. So I don’t value your ideas, nor do I trust in or care about the strategic decisions you’ve reached.”
Lacking trust in the strategy-making process, people lack trust in the resulting strategies. Such is the emotional power that fair process can provoke. When people are angered by the violation of fair process, not only do they want fair process restored, they also seek to punish those who violated it.
FIGURE 9-1 Achieving strategy alignment
FIGURE 10-1 Imitation barriers to blue ocean strategy
As imitators try to grab a share of the blue ocean an organization created, it typically launches offenses to defend its hard-earned customer base. But imitators often persist. Obsessed with hanging on to market share, the organization tends to fall into the trap of competing, racing to beat the new competition. Over time, the competition, and not the buyer, all too often comes to occupy the center of its strategic thought and actions.
Monitoring value curves signals when to value-innovate and when not to. It alerts an organization to reach out for another blue ocean when its value curve begins to converge with those of the competition.
A blue ocean strategist gains insights about reconstructing market boundaries not by looking at existing customers, but by exploring noncustomers.
Noncustomers, not customers, hold the greatest insight into an industry’s pain points and points of intimidation that limit the size and boundary of the industry.
Ask: How does your product or service offer a leap in productivity, simplicity, ease of use, convenience, fun, and/or environmental friendliness? Without that, bleeding-edge technology notwithstanding, you won’t open up a blue ocean of commercial opportunity.
The essential point here is that blue ocean strategy is not about finding a better or lower-cost solution to the existing problem of an industry, both of which trigger disruption and displacement of existing products and services. Instead, blue ocean strategy is about redefining the problem itself, which tends to create new demand or an offering that often complements rather than displaces existing products and services.
In 1909 it dropped to $609, and by 1924 it was down to $290.4 In comparison, the price of a horse-driven carriage, the car’s closest alternative at the time, was around $400.
Because the total profit level of the industry is also determined exogenously by structural factors, firms principally seek to capture and redistribute wealth instead of creating wealth.
Cirque du Soleil, for example, is not about offering a better circus by recombining existing knowledge or technologies about acts and performances. Rather, it is about reconstructing existing buyer value elements to create a new form of entertainment that offers the fun and thrill of the circus with the intellectual sophistication of the theater.
