Blue Ocean Strategy. Blue Water Appeal Water Aid Water Supply Business Management Strategy.

A year ago I came across an article written by Kim + Mauborgne, two guys who had written back in 1997 a book titled  “Value Innovation: The strategic logic of High Growth” I have to confess on reading the title of the book I did smile and thought to myself.

“Have these guys ever run a real business like a small shop or an online store?” However as I read the article I became intrigued on realising that they split the business world into two broad categories:

A Red Ocean and a Blue Ocean.

Now the Red Ocean is the business world today everyone competing with everyone else for the same limited resources just picture a red sea of volcanic lava all frothing and spitting and just like countless others we all jump into this fiery bath hoping to become a millionaires, entrepreneurs and to live a laptop lifestyle, lounging near a pool or a beach sipping tequila or fresh sparkling lemon infused tonic water, but instead we all get burnt.

The Blue Ocean is in fact a strategy where you are swimming in your own pool of deep blue water, sea water fresh water, salty or marine water, you choose.

However here, there is no competition no sinking, just freely floating or if you choose you can sit by the pool or beach sipping on some tasty blue water or if you must tequila.

The Blue Ocean Strategy is infact a creative strategy that will, if used correctly will help you to devise a new service, product or plan, where there is little to no other competition. If used successfully an average organisation that employs the Blue Ocean Strategy will be statistically competition free for about 15 years.

So how does it work?

First you have to memorise the word… RICE

RICE is the mnemonic for each of the industry factors you will have to recognise in order to find a new product or approach.

When our Team at Humanity Gives sat, theorised and used the Blue Ocean Strategy. We looked at other charities and recognised how to employ the four factors. Rice stands for Reduce, Increase, Create and Eliminate. We brainstormed a multitude of charities (you could do the same with your particular business category) and looked at common factors throughout  then decided on what Factors needed to be Reduced, for Humanity Gives, we decided that we wanted to reduce the amount of funds other charities used for logistics, administration marketing and managerial costs.

We realised that we have to Increase our marketability and our presence factors, we set up a website and highly recommend INTRANGO WEBS. We then created some new strategies such as, planning an event per month, and to the anger of some of our Trustees we “Eliminated” our original name and settled for Humanity Gives.

Once this exercise is completed we need to look at the most common denominator in the business world and that is RISK.

The Blue Ocean strategy looks at Six core risks and this time  I need you to memorise the following mnemonic :

Somebody Please Say Business Model OK.(Repeat this 10X)

Each letter from the beginning of the word stands for a risk:

The “S” from Somebody stands for Search Risk.The “P” from Planning stands for Planning Risk.

The “S” from Say stands for Scope Risk,followed by Business Risk, Managerial Risk and Organisational Risk.

As an organisation or an individual this last aspect of the Blue Ocean Strategy on minimising risk will benefit with product development or development of a new concept or service.

How do we minimize Search Risk?

The simplest way is to change the market boundaries. I always think of Steve Jobs who amalgamated the music Walkman an iPod with a phone a ludicrous idea at the time but looking back what genius.

Tackling Planning Risk again watching the Steve Jobs movie there is a scene where the managers who effectively control Apple basically sack him as his projects are costing too much.

They are subservient to the Shareholders and are only focusing on the numbers and not the big picture.(focus on the big picture and not the numbers!) Tackling the Scope Risk you need to reach or look beyond the existing demand, to simplify this, think of making a want into a need, for example men with beards, many of them want to grow a beard, nobody really needs a beard unless it’s for religious reasons, but then a bright spark has come up with beard oils and beard grooming kits, these have now become a need for men with beards (assuming that hygiene is a priority for them)

If you consider the fourth risk, Business Model Risk. I cannot stress the importance of a good strong business model and I would recommend seeking the help of a professional who will analyse it for you and remedy any blatant mistakes. Managerial Risk, most text books that deal with Managerial Risk automatically assume that there is something fundamentally wrong with the employees! Their motivation or their qualifications for the role but in reality I find management are at times as much at fault as the teams and as a strategist you have to decide whether the management team for a specific project are the right fit and finally (deep breath I know there are no full-stops!!)

Organisation Risks

I guess is the easiest risk to deal with as you need to employ the Blue Ocean Strategy in order to minimize this risk, simply go back to the beginning and use the factors (Rice) and Repeat your Risk Management Audit using the   Mnemonic “Somebody Please Say Business Model OK”.