Managing your Innovation Pipeline
Blue Oceans Ideas, Red Oceans of Confusion, and Purple Pain Points
They see its potential as a systematic way to drive commercially viable innovation around customers, their business model and engagement. And they see it as a method to create positive, transformational change within their organisation and markets.
So they train staff in the concepts, principles and tools but then have difficulty in identifying exactly where to start; where to pilot Blue Ocean Strategy within their organisation. So how do you manage your Blue ocean Strategy pipeline?
Defining the Challenge
There are three types of strategic opportunity (or problem) that are typically suited to the application of Blue Ocean Strategy. These are:
- Blue Ocean Ideas – One or more fresh ideas that have the makings to radically lift customer value and profit, but require validation
- Red Ocean Challenges – A commoditised highly competitive situation where the organisation is engaged in lots of “me too” activities, and there are either too few new ideas, or too many competing ideas
- Intractable Issues – Seemingly intractable problems that have persisted despite all attempts to date, or have stubbornly resisted anything but incremental improvement
To make sense of your portfolio of opportunities, assign teams to define the challenge associated with each opportunity. The challenge needs to be big enough and heroic enough to have an impact, but clear enough to provide focus. Organisational hurdles need to be identified so that strategies can be formulated to deal with them, but at this stage they should not hinder the definition of your challenge.
Gates and Hurdles
Once you have divided your strategic opportunities into these three streams you can commence the process of assessment, prioritisation and execution using Blue Ocean principles and tools. A typical three gated process will have each gate controlled by a fundamental Blue Ocean Strategy principle.
From the start each strategic opportunity, whether it eventually survives the assessment process or not, needs to have the right sponsor to ensure it is given due consideration and a fair chance of success. At this stage the focus is on the big picture, not the numbers. Specific Blue Ocean Strategy tools can be applied quickly and cheaply to each opportunity, to test its core propositions. This is both Fair Process and Tipping Point Leadership at work; assess ideas fairly and be prepared to be flexible or fail quickly and move on.
If an opportunity has survived the first gate a more detailed impact assessment can be prepared which not only sets heroic goals and expectations (explanation, engagement, expectation clarity) but also begins to address all the potential organizational hurdles (resource, cognitive, motivational and political) and starts to build execution into strategy.
If the business case passes assessment, it enters the pilot phase which means it typically becomes either (1) a product/service incubator project, (2) a strategy fair for the development and assessment of various product/service portfolio pathways, or (3) a tipping point project. Here the gate is built around the strategic sequence – utility, price, cost, adoption.
If the final assessment gate is passed, the project enters execution phase, where the focus shifts to project management, feedback loops and fair process based on tipping point leadership techniques.
Blue Ocean Strategy tools and principles are designed to specifically address all the risks inherent in strategy formulation, validation and execution. So a review of these risks, against the Blue Ocean Strategy tools, will also identify any weaknesses in the process used in applying them – search, scale, organisational, planning, business model and management risks.
The steps to self-sustainability and embedding Blue Ocean Strategy into the culture of the organisation are:
- Launch: Engaging initial sponsors and stakeholders, explaining the Blue Ocean Strategy project path and setting clear expectations
- Piloting: Putting the Blue Ocean Strategy process in place in an area where strong commitment is already agreed, and where a mindset for encouraging innovation and learning exists or can be cultivated
- Upscaling: Diffusing the skills and lessons learned in the pilot across a wider audience in the organisation
- Sustaining: Leading to the instigation of a self-sustaining, maintenance program of continuous professional development, learning and diffusion.
Leverage and Integration
Use Blue Ocean Strategy to reinforce already embedded methods. To create greater momentum even for existing management programs, integrate Blue Ocean Strategy with complementary management methodologies that the organisation is already wedded to.
For example, Blue Ocean Strategy embodies the systematic process and continuous improvement, waste elimination and reduction principles of KAIZEN . But Blue Ocean Strategy also provides an additional lens for the identification of wastes and systematisation. Using Blue Ocean Strategy tools such as the buyer experience cycle, the buyer utility map, the six paths framework, the consideration of non-customers (reaching beyond existing demand) and reconstructing industry boundaries – teams can systematically explore elimination and reduction including consideration of the positive and negative implications for customer value.
Blue Ocean Strategy Australia’s Affiliate Network of experienced consultants has a range of interventions designed to assist organisations to apply Blue Ocean Strategy in a commercially viable, systematic and robust manner from formulation, through validation to execution. Click here for a list of our Affiliates.