Professors W Chan Kim and Renee Mauborgne are well known as management gurus behind Blue Ocean Strategy; now, their attention has turned to leadership development. This book presents a systematic process for discovering and implementing high-impact yet cost-efficient leadership practices.
As opposed to most managers who focus on beating competitors, blue ocean strategists seek value innovation that creates uncontested market space and renders competition irrelevant.
1. Unleash the Power of Distributed Leadership
Leadership is key to unlocking an organization’s hidden talent and energy, but poor leadership is one of the primary factors contributing to employee disengagement at work, according to US polling agency Gallup. So Kim and Mauborgne developed a systematic process for discovering at every level in an organization which leadership acts and activities inspire employees to perform at their best; creating an innovative system which is far easier to implement and track than traditional values-based or mind-set approaches.
Blue Ocean Strategy for Leaders applies the principles and analytic underpinnings of Blue Ocean Strategic Move Framework to leadership. It’s intended to help organizations break free from constraints that limit leaders, unlock their potential, create new demand in the market place, and maintain high performance levels.
First, this framework helps managers identify what leadership acts are needed to increase employee motivation and business results. Second, they can develop leadership profiles for each of their teams. Finally, using new strategic logic, this allows managers to optimize both impact and cost through activities they either eliminate, reduce, raise or create while staying focused on what matters most.
Fourthly, it enables them to establish an effective measurement framework to evaluate and track these leadership innovations. Finally, it encourages them to align their profiles and actions with organizational goals and objectives.
Blue Ocean Strategy differs from traditional competition-based strategies in that it recognizes that an industry’s structural conditions must remain constant and companies must compete within them, rather than trying to outwit rivals by finding untapped new demand. Managers must recognize this by understanding why existing customers don’t buy their products or services and creating an entirely new market space that attracts noncustomers – something competition-based strategies do not do as successfully.
blue ocean strategists must also be willing to take risks and pursue an uncontested market, which allows for higher profit margins. Apple did just this with their iPhone.
2. Create a Culture of Innovation
Unlock untapped talent and energy within your organization with this practical introduction to Blue Ocean Strategy concepts. Kim and Mauborgne introduced these tools in their 2005 bestseller Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant, offering new perspectives.
An essential element of blue ocean success lies in pursuing value innovation with unremitting passion. While red ocean strategists look for competitive advantages over their competitors, blue ocean innovators look to redefine the boundaries of their industry through action and belief-driven management practices; thus focusing on creating innovative value that unlocks new demand.
To meet their goal, businesses strive to offer products and services that fulfill customer needs at prices they can afford, thus lowering barriers to entry and ensuring sustainable growth. They also employ an expansive strategic mindset which acknowledges that their company does not play finitely but indefinitely.
Leadership is at the core of creating an innovative environment. From frontline workers, middle managers, or senior executives – leaders at every level drive employee performance and engagement; as such they must possess skills necessary for high impact leadership roles that transform teams.
At the core of their approach is helping managers identify and enhance their leadership profiles using two processes, called the Eliminate, Reduce, Raise, Create Grid. The Leadership Canvas provides managers with an analytical tool for examining their current leadership profile to identify acts or activities which hold back people from contributing fully, while inspiring people. Meanwhile, employees are challenged to think about which activities leaders need to limit or increase to enhance their current profile.
Both tools are intended to assist leaders and their teams in identifying leadership practices that will enhance a company’s competitive advantages in its new red or blue ocean, then prioritizing implementation in its ongoing leadership development program – this ensures alignment between leadership practices and strategic goals of an organization.
3. Embrace Change
Leaders need to embrace change and provide support necessary for its implementation in order for any new strategy to flourish, whether this means providing compelling vision and logic that helps employees grasp its value, overcoming resistance from skeptics or competitors, developing capabilities or skill sets required for its successful implementation, or addressing obstacles within systems which inhibit information flow or limit feedback loops – such as established processes optimized for existing business models that need modifying; upgrading IT systems or infrastructure as appropriate.
To maximize a company’s full potential, leaders must bridge the gap between employees’ talent and energy and what they realize in terms of performance. Unfortunately, ineffective leadership often causes this gap; yet few managers know how to address it effectively. Traditional approaches have focused on values, qualities, and behavioral styles with the assumption that these directly translate to high performance.
Blue Ocean Leadership provides an alternative approach to this challenge, by emphasizing what leaders must do in order to increase motivation and business results rather than who they must be, thus providing transformational change that helps close the gap between their people’s potential and realized performance.
Applying the principles and tools of blue ocean strategy to leadership, specifically the Leadership Canvas and Eliminate, Reduce, Raise, Create grid, will uncover which leadership acts can boost people’s motivation and business results while conserving limited resources of time. With limited resources at their disposal, step-change approaches to leadership tend to fail miserably while blue ocean leadership allows leaders to maximize both impact and cost by strategically selecting which activities to eliminate, reduce, raise or create.
Additionally, this book explores ways to align management systems and other organizational structures with a blue ocean strategy, how to develop leadership across an organization for such strategies, how to sustain such strategies over time, as well as avoid red ocean traps that keep organizations tied down into existing market space even as they attempt to create uncontested market space. Furthermore, this book contains many practical ideas applicable across industries.
4. Develop Your People
Ten years ago, two INSEAD professors revolutionized market discovery with their concept of blue ocean strategy – an innovative framework that helps identify uncontested, lucrative markets ripe for expansion. Now, using their tools and concepts applied directly to employee talent management, these pioneering educators are using blue ocean strategy concepts and tools to close what might be considered one of the greatest leadership challenges: closing talent gulfs.
Kim and Mauborgne’s approach is action-based, similar to strategy. Instead of emphasizing who leaders need to be, they question them on which acts and activities will provide a boost to motivation and business results driven by their employees. This differs significantly from traditional leadership development approaches that focus on values, qualities, or behavioral styles with the expectation that these equate directly to high performance.
The authors help managers to recognize their ideal leadership stance; whether that involves matching or surpassing competitors, creating uncontested market space or making rivalries obsolete. A new chapter of their book describes how value innovation provides a framework to reconstruct buyer value elements to establish new strategic positions and open up demand.
Leaders can utilize this perspective to pursue high impact, low cost acts and activities as leaders. Achieve this entails providing high levels of motivation and engagement within their workforce for market-leading performance; while low costs focus on eliminating activities which don’t add any competitive advantage while freeing up time as the leader’s most precious resource.
As part of this process, the authors ask leaders to identify which leadership practices limit them and how they could change in order to unlock people’s full potential. A tool called the leadership grid aids this change: leaders compare current activities from their “as-is” profiles with ones that inspire them and will allow them to thrive in today’s market environment.
Kim and Mauborgne provide a step-by-step process to help managers realize the full potential of blue ocean leadership by clearly communicating their leadership vision and cultivating an organizational culture that aligns with it. In their book, Blue Ocean Leadership: Unlocking Potential in Every Level of Organizations, Kim outlines this step-by-step plan so as to expose this vision throughout an organization and develop necessary capabilities.
