I’ve grown weary of an endless stream of business books that “give great cover” (snappy title, heavily promoted, a promising dust jacket), then fizzle after a chapter or two. I’m doubly skeptical of business books out of Europe, where clear business writing is too often mixed with social theory, doing justice to neither. Thus it was a pleasant surprise to pick up 'Blue Ocean Strategy' (see right sidebar), by W. Chan Kim (of BCG and Insead) and Renee Mauborgne (of Insead.)
Published just last April, ‘BOS’ is a gem of a book, presenting what I’m betting could become the definitive unified field theory for so-called ‘reconstructionist’ strategy. (More on that in a moment.) What do I mean by unified field theory? In this case, without stretching themselves too thin, (as I at first suspected they might), the authors manage to weave together tools and insights for, among other things:
- Visioning
- Strategy-setting
- Systematic innovation
- Intrapreneuring
- Outside-in marketing
- Predicting strategic success
- Strategic pricing
- Focused, rational cost-cutting
- Organizational behavior
- Change management (aka, ‘tipping point leadership’)
- Sustainable competitive advantage
Too often these topics are atomized in business training and literature, making it difficult for managers whose job it is to integrate them. BOS by contrast, is theoretically ‘tight’ but also practical: citing dozens of examples from a wide array of organizations (e.g., Cemex, Cisco and Cirque du Soleil), alongside a toolkit of clear analytical steps, all packed into just 190 highly practical pages. In my line of work, this is the kind of book that begs underlining and highlighting. I expect it will grow a forest of sticky reference tabs as I re-read it and dog-ear the pages.
What is reconstructionist strategy? It’s easier to start with what it’s not. Reconstructionist strategy rejects the conventional wisdom of most strategy writing, scholarship and consulting that starts with industry definitions as ‘givens’ and focuses on competition and how to beat it by following a low cost or a differentiated strategy. Inspired by, but not wedded to Joseph Schumpeter (of ‘creative destruction’ fame), reconstructionist strategy focuses instead on customer-centric value (not to be confused with technology) innovation, and creating new aggregate demand in virgin product/market space where no competitors currently exist and mass pricing makes it hard for them follow. The authors note that:
“…a process of creation can occur in any organization at any time by the cognitive reconstruction of existing data and market elements in a fundamentally new way… Recognizing that structure and market boundaries exist only in managers’ minds, practitioners who hold this [reconstructionist] view do not let existing market structures limit their thinking… Redefining the problem usually leads to changes in the entire system and hence to a shift in strategy, whereas recombination [e.g., of technologies] may end up finding new solutions to subsystem activities that serve to reinforce a strategic position.”
The ‘Blue Ocean’ in the title refers to this kind of wide-open wealth-creating (as opposed to wealth-shifting) market space. It is contrasted with more common ‘Red Ocean’ market spaces where shark-toothed competitors churn the water bloody in a zero-sum feeding frenzy.
Readers forming the impression that this is a ‘big picture’ book are right—and wrong. The book unapologetically urges managers in the initial stages of strategy formulation to move beyond the confines of numbers, (either historical or projected), on the simple premise that such numbers exist by definition only within market spaces that someone else has already noticed. Having started there however, the book provides a framework for analysis that brings the visionary down the practical details of execution.
The book has sparked my thinking on a number of subjects, but especially scenarios. The authors don’t mention them directly, but I was excited to make what I think may be some profound connections between the processes they use for getting groups to envision new futures and some scenario process innovations I’ve used with clients… the subject of another post at some point. I’ll close with this quote from the book that I thought was particularly on point:
“Encouraging refutation [of alternative futures or strategies] sharpens everyone’s thinking and builds better collective wisdom.”
Indeed. Read the whole thing. Full disclosure: I have no financial interest in the book and have never met the authors.
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