Leveraging Blue Ocean Strategy

Don't go head-to-head with your competitors. Instead, carve out untapped market space.

You might have heard of “blue ocean strategy.” It’s a very business school-type term in some ways, but basically, it means this: rather than going head-to-head with your competitors on everything, carve out “blue oceans” of untapped market space. It’s all documented in this 2005 book and via this website.

Some popular examples include Southwest Airlines — which basically made affordable travel more reputable — and Home Depot — which moved the idea of a lumberyard to a shopping center with DIY capabilities (i.e. housewives now want to go to a lumber yard, which is a new market space). Apple is another major example: the iPhone, iPad, and iPod essentially carved out new market space for the overall brand.

So, when you conventionally talk about blue ocean strategy, you’re talking about (a) customer acquisition and (b) markets or marketing, so ultimately you’re discussing (c) the bottom line. But could you take the same concepts and, instead of applying them to the revenue stream and P&L, actually apply them to ideas around leadership and employee engagement?

You can. And here’s how:

The underlying insight is that leadership, in essence, can be thought of as a service that people in an organization buy or don’t buy. Every leader in that sense has customers: the bosses to whom the leader must deliver performance, and the followers who need the leader’s guidance and support to achieve. When people value your leadership practices, they in effect buy your leadership. They’re inspired to excel and act with commitment. But when employees don’t buy your leadership, they disengage, becoming noncustomers of your leadership. Once we started thinking about leadership in this way, we began to see that the concepts and frameworks we were developing to create new demand by converting noncustomers into customers could be adapted to help leaders convert disengaged employees into engaged ones.

The core tenets of how you do this are fairly basic on the surface — you connect work back to acts and activities, you tie work to the market realities, and you attempt to distribute leadership at the various levels, for example. The biggest ideas behind applying blue ocean to leadership involve looking at your leadership more realistically: what actions are they doing most of the time, and are those actions providing value to other constituencies (i.e. customers, direct reports, bosses)?

Most of the studies around the blue ocean theory have found depressing, but not surprising, news: Essentially, 20% to 40% of a manager’s time is used on activities that really benefit no one else (not even their boss!). So essentially, managers are doing work nearly half the time that serves no one in particular.

Applying Blue Ocean Leadership

A lot of fixing this requires things that are hard in mid-size to large-size companies: notably, you need strong, effective communication channels, and you need everyone to calm down, stop worrying about the day-to-day, and instead look at the big picture for a day or two. In fact, in blue ocean leadership applications, the mantra for senior managers is “Shift from the day-to-day to the big picture.”

Hmm. You see a lot of the same problems in this space that you see with job descriptions: Job descriptions are often recycled, even though the person that most recently had the job may have brought some new value-adds to it (or, on the flip side, exposed that certain traits needed to be there for sure). If you just keep recycling the job description, then two to three hires hence, it’s a muddled mess.

Similarly, if you just keep recycling the same idea of what a leader should be doing in your org — without stopping and thinking “Hey, have needs changed at all in the past year or two?” — then it becomes a mess as well. I’m not advocating doing this every week (you could, although realistically, very few people would have time for that). But doing it once every 18 months seems reasonable, and seems like a good idea in terms of your overall direction.

Blue ocean leadership achieves a transformation with less time and effort because leaders are not trying to alter who they are and break the habits of a lifetime. They are simply changing the tasks they carry out. Better yet, one of the strengths of blue ocean leadership is its scalability. You don’t have to wait for your company’s top leadership to launch this process. Whatever management level you belong to, you can awaken the sleeping potential of your people by taking them through the four steps.

That last part is dicey at hierarchy-centric places: Change from the middle isn’t always valued in such an environment.

AnswerHub’s Strategy

We think about topics like this from time to time at AnswerHub because one of our core tenets is smarter team communication. We believe that can make you a more effective business. Rather than pursuing the same old answers in the effectiveness-of-your-leadership space, we like to think about it in terms of things like reducing the cost of knowledge loss and We can help you with this, if you’d like.

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