Don't Compete. Create.

t how do you

really dominate in the marketplace most people are taught that you get into business and that you fight for

competitive and you try to battle for some portion the market share but I'm here to tell you that's totally

unsustainable if I had tried to just compete for market share in the personal development that's a pretty small market

but what I really wanted to do is I wanted to affect a much larger audience and I looked for ways to deliver that in

ways that never been delivered before so I believe if you wanted to damage in business if you do what everybody else

does and you do it better than everybody else you get a tiny competitive

advantage but if you do something no one else is doing in your space you get a geometric advantage and I can tell you

whenever I'm talking to people in my business mastery seminars one of the first questions I ask them is what business are you in and people usually

give me an answer like well I'm you know I have a restaurant and a catering service or you know we have a CRM system

that's superior than anyone else in the world and whenever they say these things they usually do I'm a lawyer or I do you

know I wholesale cars and usually they describe the process of what they do not the benefit of what they do which is the

first place everybody's got to start if you can't communicate what you're doing what your company is in a way that

creates curiosity and it's compelling if it's not compelling for you first of all it's not gonna be compelling for anybody

else and what will make your business more compelling is if you also maybe ask yourself another question which is what

business do you need to be in you know instead of saying I'm in the restaurant business maybe I'm in the business of

creating environments where magnificent food and sensual desires are met for

every client I don't know I'm making it up the point of the matter is you need to be able to create something that's truly compelling but you also want to

say we're can I compete where no one else is competing you know my dear friend Marc Benioff practiced what this

interview is all about which is the blue ocean strategy you know Marc came to my seminar of gosh 15 years ago and he been

three unleash the power within seminars in a row and he said you've pushed me over the edge you know I'm gonna leave

my current job and I'm gonna start this company called salesforce.com and I want you know you helped me to start it and

it's good we're gonna change the business world work into a hundred million dollars in business well today I tease Marc about it fifteen years later

he's gonna do about seven billion I believe this year on his way to 10 billion very quickly thereafter it's

been quite a growth patch but part of that is he opened up an area where no one else was competing there was not a

giant focus on this idea of really living in the cloud putting your business in the cloud has seemed so

insecure it seems something businesses wouldn't even imagine back in those days but Marc found that space and became the

king of that space and as a result he dominates at this stage so you're gonna get a chance to hear an interview with

the woman who created the blue ocean strategy as a concept and it's certainly been around but she she put the concept

on it I think the concept understood fully can move any business person towards greater success her her name is

Renee MA born her colleagues not withered also wrote the book with her loose WH and Kim but I think what you're

gonna find out as blue oceans are really where demand is created rather than fought for if you're a red ocean that's

one where there's a lot of competition and you're fighting for a little bit so think of you know Netflix they blew up

blockbuster because they went after a different environment I mean blockbuster had the chance to buy Netflix for 50

million dollars early in its career they were doing three billion at Blockbuster at the time and they thought our we can

do this ourselves they didn't understand these people within a few years have rented their first billionth video and

they still didn't pay attention to them they didn't understand these people are opening up a blue ocean at versus working in the old red ocean Amazon did

it with brick-and-mortar shopping ubers done it with taxi cabs so I think you're gonna really really enjoy this and our

hostess for this session as anti org she's gonna do the interview and she's gonna really give you an understanding of some of the most the most powerful

insights in this best-selling book blue ocean the strategies you can use right away and listen be sure for the end

because I think you're gonna find there's some really practical ways for you to start looking at this and creating what I call a strategy canvas

something that can really allow you see where you are in the marketplace how you compete again whether you're you know army of 10,000 employees or whether your

business that's got two people you still need to be able to grow your business by again innovating and innovating the

marketplace in which you enter so enjoy the podcast and I look forward to hearing from some of you soon

many of us have been taught to believe that in business success and prosperity come by edging the competition out

fighting for the competitive advantage battling it out for market share and constantly trying to find new ways to

differentiate and distinguish ourselves but is this really the way to create sustainable profitable growth in the

International best-selling book Blue Ocean Strategy Renee my born and her colleague w chan Kim like in cutthroat

competition to a red ocean of rivals fighting over an ever-shrinking profit pool by examining 150 strategic business

moves spanning over a hundred years across 30 industries the authors discovered that real lasting success

does not come from fighting the competition but from creating blue oceans that is untapped new market

spaces that are primed for growth these strategic moves which the authors refer to as value innovation yield substantial

leaps and value that have the power to make the competition irrelevant here to speak more about the blue ocean strategy

and how you can use it to chart a new path towards success is renamed ma born professor at NC N and co-director of the

NC ed blue ocean strategy Institute and author of best-selling book blue ocean

strategy which has sold over 3.5 million copies across five continents and was

recently updated and expanded in 2015 Rene thanks so much for joining us thanks Anna I want to start just by

asking basic concept what is a blue ocean strategy how is it different from

traditional competitive strategy that's a great opening question blue ocean

strategy is all about how can any company or organization break out of

that red ocean of bloody competition or existing industries to create

uncontested market space and as you articulate mate the competition Arella and the way that it does that is by

simultaneously pursuing both differentiation and low-cost the beauty

of that is it creates a huge win for the market when you're differentiating low costs you have fans not customers but it

creates strong profitable growth for their company so it's about creating that win-win and I think the way that it

principally differs and you said it very well in your introduction as well as that traditionally strategy has always

been thinking about the competition right competition based strategies so when companies think about what they

want to do they focus on benchmarking the competition and striving to be better than them but the more they look

to the competition the competition ends up setting their strategic agenda and the ironic impact of that is is that the

more you look to the competition the more you end up looking like the competition in effect achieving the

exact opposite of your intention which is you commoditize yourself and your industry when that happens you have the

exact opposite result of blue ocean strategy which is your differentiation goes down you look like the competition

but because you're matching every move your cost structure goes up and so that was what we see what we call red ocean

strategy or competitive strategy doing blue ocean is of course the opposite not looking to competition but looking to

make it irrelevant so that would be the key differentiators between the two right so just to help illustrate can you

give us some examples of red and blue ocean companies and specifically in 2016

are there any companies out there now that are either in the news or we're just hearing about that you're seeing

carve out new markets you know art book and by the way the database of course

has grown well beyond 150 moves about companies and organizations creating

blue oceans of new market space and you know some very classic ones I think anyone can relate to is just what Cirque

de Soleil did in the circus industry creating a whole new market space and lifting the price point of that industry

up or what curves had done in the fitness industry again another red ocean industry and carved out a new market

space of fitness for women in that industry today if you go to the blue

ocean strategy blog we're doing some really exciting things is that pollution strategy has such has had such an uptake

in the world there are many companies that have been applying those ideas systematically to their industries and

we are interviewing people that have applied the ideas and what kind of turnarounds they have so in an upcoming

blog we'll have we're going to be talking to I think it's Aurora Medical

let me just see it's Aurora Medical Center in Wisconsin and they've actually been applying it to health care and

they've been receiving 350 percent increase in their margins after doing

this and creating all new customers so our website has a whole slew of examples

but even recently if you look at what Drybar is doing in the beauty industry I

think that's a great example of a company carving out new market space in the hair salon industry so they're there

all over they're abound and our website blue ocean strategy comm has even more

examples people can learn from great so that's a great example of how it spans

across multiple industries what about different sizes so is is it applicable to both small and medium-sized companies

not just large ones you know it absolutely is if you look at our book

right and you look our database Cirque du Soleil started with a bunch of circus performance curve started with a husband

and wife small team a company called JC taco which is to say the largest outdoor

advertiser in the world you'll see their banner in all major airports and city centers they started this small family

business but the difference is when you pursue differentiation low costs and you stop benchmarking the competition you

set yourself up for strong growth because you don't have customers your fans and you have a huge profit engine

which gives you the resources to hire the talent and to invest in growth in your industry many small medium-sized

businesses are so focused with their limited resources on surviving because they're playing that competitive game

where they can't stand apart and they can't drop their cost fast enough they don't have any excess slack to create

growth Blue Ocean Strategy creates slack to grow in a really powerful

compelling way the only difference is you don't say small on medium very long you start to grow very fast which i

think is exciting so my answer to you is a resounding 100% yes and in fact we

would argue that the only way for small and businesses to transit from small and medium-sized to the larger enterprises

the next apples the next Facebook's of the world the next JC to Kohler curves

is to think about how they can be differentiated in low cost just simply benchmarking the competition being a

little better and a little less I don't see that as a way they're gonna win against low cost imports that are

flooding our markets nor against established companies with their deeper resource pockets so we're really excited

about what it can do for small and mid-sized companies great so what about

social media how does the increasing prevalence of social media impact

pollution strategy that's something that's changing everyday a social media is something that is making blue ocean

strategy in our opinion even more relevant than ever and it's another exciting opportunity for small and

midsize businesses and why think about it their social networks blogs microblogs video sharing all of these

new technologies do one thing they shift the power of voice influence and

credibility from an organization to the individual that means the individual today as we know has a global megaphone

to the world and ability how do you go and not become a victim of that reality

but a victor is you need to stand out as never before if I stand out as never

before social media puts the wind behind me and what happens is I start getting five-star ratings people start blogging

about me people recommend me they give me thumbs up and they start creating fan

videos of me that go on YouTube and it can go viral so you can as long as you stand apart you can leverage all of that

you can't really hide as an organization anymore being just me too and you cannot

over market yourself so if i'm a small mid-sized I really want to focus on how do I

create a blue ocean be different and low-cost and know that by being small and medium sized I have actually more

flexibility and more entrepreneurial natural instinct within me that a large bureaucratic company and then in doing

that kur start creating that blue ocean and then start to leverage the power of social media to get the world to hear

about me so it's a tool you can leverage if you're different and it's a tool that

makes being different more important than ever if you're not different you don't stand out you're gonna get lost in

the crowd or even worst the world's going to report on how ordinary or poor you are so blue oceans going to matter

more and more in the future there yeah in in social media in particular I think a lot of small businesses struggle not

just with the resources and the time to to execute on any strategies they might have but they they don't know what their

messages but that's great that you know it's further confirmation that if you are differentiated already in the core

and the nature of who you are as a business that play it makes social media so much easier to execute well you know

you make a really good point there that Anna I'm not talking about you develop a social media strategy because small

business might have limited resources maybe you're blessed you've got some young people that are really talented and can do this but maybe you're not I'm

really concerned about am i creating a product and service worthy of people giving me five stars am i creating one

worthy of people speaking about me because if I am I am gonna get some influencers out there or some people in

the local media to come and I'm gonna give them a free sample of my thing and I'm gonna say try it and if you love me

do me a favor can you give me your rating on this website can you write about me it you don't want to do it

because you're gonna use social media I think there's a wrong understanding I'm not saying small and medium sized I'm not saying they shouldn't but what

we are saying is create something worthy how much can i is one small organization influence the world through social media

may be limited but if I create a great product and service I can get everyone else to talk about me that should be the

objective how do I make myself worthy of the world wanting to talk about me and celebrate me so I've got to focus

fundamentally on making my product and service stand apart and have lower-cost and when I do that's the

ultimate engine for five star ratings for people wanting to blog about you and put your product and service in front of

people you can if I start a dry bar I would invite the free press over and say hey I'll give you a free blow dry what

does it cost me one day of lost revenues or 20 lost blow-dries but in return if

you think it's great could you drop us a mention can you do something and if not you don't need to say anything and then

you can also test the proof of the quality of what you're doing but I guess my goal would be not that we need to

tell the world how great we are create a product and service put it in the hands of a few and let them start doing it and

that should be our objective with leveraging the power of social media not us talking but getting the world to talk

about us sure no that makes perfect sense in other words get brand advocates

and talks about that a lot too when he talks about creating raving fan customers because those are the ones

that you're going to have for life if you just have satisfied customers they will leave you when the next best thing

comes along and Blue Ocean Strategy does that people occur people look for Cirque de Soleil when can I go despite the

price of the ticket I can't tell how many executives I know that we're living in Europe and they said this was 10

years ago when Starbucks was nowhere around the world yet they say oh I can't wait I asked my driver to tell me where

the closest Starbucks is people search these companies out and that's what you

want to do you what would it take for us to make the competition irrelevant the challenge we give company is what would

it take to win the mass of buyers with no marketing when I get a challenge what does that mean I'm not leveraging marketing I have to

be so good people want to talk about me when you ask that question you're forcing people to think in a

fundamentally different way in their mindset because simply benchmarking the competition being five point better is

not going to make that happen and so you start a new process of thinking that's what blue ocean does it gives you

different sets of questions so that those questions leads you to think in different ways and get different answers

that let you see the world and new opportunities so it sounds like you're

almost reinventing a business from from scratch and that kind of makes me to the next question about

is it necessary to acquire a new talent and literally have fresh minds in your

business in order to create a blue ocean or you know are people who are really accustomed to competing in a red ocean

are they capable of creating a blue ocean offering we believe that everyone is capable of creating a blue ocean

everyone has innate creativity they often just don't know how to tap it or they have a fear to tap it they don't

they lack the confidence but the whole premise of blue ocean strategy is it's filled with empowers people with tools

and frameworks and what we wanted to do is how do we take this process of creating new markets from a black box

and and not unknowable to giving simple tools and frameworks that anyone can use

to think differently and so yes anyone can that's the whole premise of blue

ocean strategy and we would really encourage anyone to start looking at those frameworks and asking you know

what could we eliminate reduce RAZR creates one simple framework but we have the six paths to think differently about

an industry so you ask different questions that you understand what are the pain points of an industry the

points of intimidation the major nuisance of an industry that companies in the industry take for granted but

when you ask different sets of questions they become revealed so we're really

excited we work with many red ocean companies through over time they all come into it thinking do we need new

talent we're not even capable they start working with the tools and frameworks and they start discovering all new

answers and to be honestly they come out a person that's almost full of life

excitement and they slap themselves on the back and they say I never knew how creative we were and and they often

start thinking we never knew how many things our industry does that turns off buyers so it's very exciting process so

again I encourage people to look at the tools and frameworks so we're a night what would you suggest people do if

they'd like to start acting on some of these these tools immediately so that's a great question Anna I think that if a

company wants to start in a casual way to explore what blue ocean strategy and some of these frameworks might be able

to do for them and their bid this a good way that we usually suggest companies to do is to get their people

together usually on a Friday afternoon when people are more relaxed you know have some beverages and some food keep

it light and use the first tool which is what we call the strategy canvas and the strategy canvas is on one page simple

one-page analytic visual which has on the horizontal access you write all the factors you compete on and investing in

your industry and on the vertical axis is what do buyers get a low a level or a low a low level or high level of that

offering and then you plot yourself and your major competitors across that and

when you do what you typically find out is that ya our strategic profile looks a

lot like the competition so you begin to first have a realization that we are in

a red ocean maybe we put ourselves there and we don't really have a strong trajectory for growth and then the

second thing once you have that impetus and realization that we do need to change and we understand what the

competition is doing from a high level from buyers point of view second thing is understanding well who

are all the customers we could use for growth if we want to grow and for that we have an analytic tool called the

three tiers of non customers most people know who their customers are but they're cool lists of who they could pull into

the industry that are is not there now so there's three basic types there are occasional users of your industry could

become much more frequent users there are people that refuse your industry so if I play golf I might have thought

about tennis but I chose golf and so I'm a refusing industry to tennis and my question is why did I refuse it and then

the third or unexplored customers and I would want to get a hold on who are all

these non customers once I've identified that with my team on a Friday and we see

there are all these people potentially I would just pull the last simple analytic which is called the eliminate reduce

raise create grid and really in that grid it talks about what factors that we compete on should we eliminate or reduce

at the industry as long focused on and what could we raise and create to stand apart and I would say you know what

would to win any one of these three tiers of non customers what would we need to eliminate and

reduce in that current strategy canvas or raise and create to pull those

customers into our industry so what I want to do is give our team a challenge I want everybody over the next four

weeks to go out and have some conversations with these people that are either in tier 1 tier 2 or tier 3 and

tell them this is what our industry does what would we what's the reason you refuse our industry what do we need to

eliminate reduce it really drives you crazy about us you don't like or frustrates you and what could you raise

or create and just come and let's get together on another Friday afternoon in one month and let's share our ideas what

they do in finding this is that first of all they get to meet the market which is insightful to begin with many people never meet the market to ask if they

even make it it's just to sell not to ask and learn but after about four weeks

they usually come back and they say you know it's interesting when we talk with customers we started to find out we do

these two or three things that people find really intimidating our industry or really frustrating in our industry or

too complicated and I don't like it at all and they think that you know they wish that were eliminated now that's

interesting maybe if we eliminated that some of these people might come and they

say but you know by the way there was an interesting one or two other points they started saying like in the case of you

know why people refuse golf nobody can even hit the ball the club head is too small it's so hard huh if they made the

club head bigger in golf maybe we'd play golf because I could at least hit the ball feel good about it that's what

tennis does how interesting so maybe if we raised one or two factors we could start doing that then you say let's look

back at our strategy canvas that we drew what does that mean and they start seeing how they can start shifting what

they do does that mean they're gonna create a blue ocean based on that right away no but what they start to see is

some of the weaknesses of the industry that have long gone hidden and some of the ways to start shifting that curve

and moving the trajectory and pulling in new customers but more than that what it

does is it gives the organization confidence that there are opportunities out there they

can think differently and they didn't realize how much they just move in lockstep with everyone else and assume

things should be done because it's always been done and others do it and that creates an appetite in an

organization to start to think differently but more than that it usually gives them clues right away on

one or two factors to eliminate to drop the cost structure right away and simplify things and one or two things to

raise to stand apart they may not get a blue ocean but they're gonna start sailing from the red to the blue and I

think that creates a lot of excitement a lot of fun and it starts creating an appetite in an organization to do things

differently and to have the confidence that even us as red ocean thinkers with tools and frameworks can think

differently and so that's what I would suggest and you know now since you're a

it gets me really excited because I think that's what does so brilliantly with people right he

shows people you can change anything in your life if you have the right mindset but you have tools and frameworks to

help you get there and I think that's what this process does so I would encourage everyone Friday afternoon

get your people together have fun draw your strategy canvas one-page see what the industry does then think about

identify who are the non customers you could pull and then go to the market few simple interviews and ask what could we

eliminate or create to get you to come to our industry and that's gonna set you on the path to starting to sail towards

the blue and then of course read the book and fall so how can these

businesses ensure that the blue ocean they are creating will unlock a commercially compelling blue ocean

alright how can they how can they test to see if people will buy great question

Anna you know that's a critical issue because many times when you talk with companies they get a total misconception they think innovation is doing something

just different and the different is not always linked to value so we really talked about value innovation is your

innovation link to a leap in value for buyers does it make it simple easy to use reduces our risk more friendly more

productive for them I'm more environmentally friendly how do you make people win in a very practical

whether it's a b2b or b2c customer right that's very critical to to understand

what you talk about to unlock a commercially compelling market often also with organizations they think oh if

we don't have a lot of bells and whistles we're not creating a blue ocean but often blue oceans are created by

dramatic simplification like Drybar focusing only on you know creating

blow-dries forget about haircuts and coloring and permanence it's just blow-drying right it's simplification to

create a blue ocean so one is an understanding that it's value innovation a pollution but the second thing again I

go back to tools and frameworks in our book we have what you call the blue ocean idea index very simple people

should not get intimidated by it but it gives you a series of questions to say is there a compelling reason for people

to buy the product you want to first test that we're not creating something that's different that has no need in the

marketplace so that's first and the second it says is that we are we strategically pricing it to capture the

mass of buyer so they not only want it but they can actually afford to buy it then third it comes down with a series

of questions to say if we deliver that value at that price are we able to make

money on it without jeopardizing the strategic price so do we have a profit model that we can win on right so when

swatch came up with a fun stylized watch they knew they wanted fashion statements

and color and brightness they knew what the price point had to be which continues to be very aggressive but then

they said how do we make money on it and that's what led them to switch from metal and plot metal and leather to

plastic that switched from 150 internal movements to one third the movements

internally to use plastic injection molding they change that entire process

in in the profit proposition so we show you how to ask those questions very important for your business and last one

we just signal make sure there's no adoption hurdles in the marketplace that could get in the way when talking to

your sellers of your product today to get them on board to be excited about your new offering so we have an analytic

to work through it the word and lytic shouldn't intimidate anyone they're powerful simple compelling

questions that often people forget to ask when they're thinking about creating a new market because they're looking for

what's wild and different but what you're looking for really is what leads to a leap in value to buyers and to your

company so that's what we would say to Anna it's go to the blue ocean idea

index in the book dive into it and start asking those questions and by the way if you can't answer yes it shows you know

how you need to go back and rethink things it may be that your idea is just 20% off from unlocking a blue ocean and

it'll teach you how to probe further and refine your idea better so you can actually say yes the value to price to

profit and to adoption in the marketplace so as you can maybe hear from my voice I'm really excited by it

because we work with companies again and it's a powerful tool for any organization to use regardless of the

employees that you have in it with some of the companies that you've worked with what have you witnessed as being some of

their major challenges that they face as they go through either the process or the execution of their strategy

well you in our current book of course we talked about there's four major hurdles right that any organization

large or small needs to be aware of one is that cognitive hurdle do we need to

change and that's what that exercise I just talked about getting people don't tell people we need to change we're

stuck in the red ocean let them draw the strategy canvas and come to the realization on their own right adults

love to self discover where they aren't being told so if we're different the

strategy canvas will reveal it but if it shows we look like everyone else then

we're a me too and then you ask the question will that get us the profitable growth and if not the answer will be no

it we're stuck in the middle maybe we do need to change and the other one is resource hurdle where we don't have resources to change right and you know

in our book we talked about how do you find your cold spots in your organization and everyone has them you're investing lots of resources due

to historical reasons in areas or activities that take up a lot of money but have limited impact

performance and then how do I redirect those to areas that have high potential impact performance but our resource

starved so how do you shift resources an organization motivational hurdle how to get people to be excited how do i

leverage kingpins in an organization to get people on the same page with you and of course political hurdle you know some

people will be afraid of the future how do I find the angels that are excited about the idea for change and get them

to support me build a big coalition understand who will fight me and why and build arguments to show why those are

not objectively in the interest of themselves or the organization so we really talk about those four hurdles in

there but overall I want to say that the process is really built on fair process and I think in the way the process is

built a lot of those barriers start to come down just by involving people in

the entire discovery process themselves so when we see it and hear it yourself

you can't forget it actually so what are some next steps for you is there

anything new that that you're working on with chanoor or with your team of researchers that we should be looking

out for I said we do have a book we're working on and I'm really excited about

it for your audience because it's even more getting down to how do you really move your company if I'm a Main Street

business of a small company medium company from the Wright ocean to the blue how do I transition my people the

psychology of my organization my resources to get there so we're working

really on that and it's going to be built on examples of companies nonprofits small companies large

established organizations even some large governments that have been plying these ideas so that's what we're working

on but it's I can't say more than that at this point but we'll look forward to

hopefully working with you on bringing these to your audience in the future absolutely and

yeah everybody I would encourage you to go check out the website by the book is it just a blue ocean strategy com Renee

yeah it's blue straight are common in it and I just say Anna there that newsletter in it and you know one

thing I really encourage is if you're thinking you don't want to be in the red ocean you do want to be in a blue you want to break away from competition and

stand apart the newsletter really shares stories of direct firsthand interviews

with companies that have been applying these ideas and what were their challenges and a lot of them are small

and midsize and I think by reading stories and surrounding you by yourself with information of companies that are

doing it it will not only inspire you but give you insight and what that would mean to your organization to change so I

encourage everyone to sign up for that newsletter and look into it great thanks

so much I want to walk on a fire

with him one day we can arrange that

okay bye-bye [Music]

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