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Tuesday, October 07, 2014

Blue Ocean Entrepreneurship: an idea worth pursuing

Kim and Renee brought out the concept of Blue Ocean Strategy in 2004 through their research and writings and popularised it. That was related to the organizations that were trying to compete and were finding it difficult to sustain in the market full of related products and services and the pressures of the market in improving quality, reducing prices, designing well defended promotional schemes etc.  This is where BOS proposed to create a new market, develop a new product, convert noncustomers to customers, convey a new message, so that one does not feel the pressure of competition.  It was to kill competition and create a blue ocean where there is no competition.  And when in this blue ocean, competitors take birth, participate and compete and start hitting and eating your share it converts the blue ocean into red ocean.  This is the time one needs to come out of it and create another blue ocean. This strategy helped many companies to learn lessons and create blue oceans.

Now, Kim and Renee expand BOS towards focusing on individuals as they propose Blue Ocean Leadership for attention and practice which opens new way of looking at the problem of leadership at different levels. Traditionally most of the leadership development programs have been focusing on the values, qualities, and behavioural styles, generic practices in isolation of market/customer requirements, and the impact of executive's potential on organizational performance.  BOL questions it and suggests to concentrate on the acts and activities, developing different ways to face market realities, and to engage and empower employees to lead and take appropriate decisions at their level.

I think we need to concentrate on developing Blue Ocean Entrepreneurship (BOE) in India which could be conceptualized and practiced through the learning of BOS and BOL. The primary learning of BOS is to develop new products and services and make competition irrelevant; however it has many other facets as well. It is not merely developing new and innovative products and services but also to create and follow new modes of delivery to reach out to the customers and to explore new markets and play role in this ‘uncontested market space’.  The whole focus is on creating, adding and delivering value to the customer.  This opens new kind of thinking in the minds of entrepreneurs who toil hard to sustain themselves in the competitive market. The untapped customers have to be studied and accordingly products and services have to be innovated and served in order to create a new market segment.

When I look at the young entrepreneurs, I tend to believe that the energy and enthusiasm that they possess and depict would guide them to explore new markets and converting non-customers to customers through value added products and services would be one of their focus areas.  The use of technology for establishing backward as well as forward linkages has been possible through the innovative ideas and their effective implementation in this direction.  If one looks at some of the products which are prominent and market leaders, it can be easily observed that they had out-of-the-box thinking which made them a key driver in their success.

The success stories of Flipkart and TravelKhana, naukri.com and makemytrip.com, VLCC and Shehnaz Herbals, Shyam Antenna and SuKam and many others tell the tale of exploring uncontested markets and delivering value to the customers to their satisfaction.  In fact in one or the other way they have been the result of Blue Ocean Entrepreneurship.  It really becomes more important in the light of one of Bloomberg surveys which concluded that 80% of the startups get closed down within 18 months of their starting up.  One of the important reasons for their failure could be their venture adding to the size of red ocean and competing with the existing brands.

And another important reason for failure is leadership crisis.  Not all the entrepreneurs who ideate and long for sustaining a good business plan might be good leaders. Leadership all together is a different kind of activity as compared to developing a creative idea and seeing it through. Hence one need to understand product and people through the same eye and travel through the journey focusing on both of them successfully, and that is really a greater challenge for every entrepreneur who does not want to fall within that 80% of closing down startups.    

The workforce in the non-traditional blue ocean organizations is required to possess different set of skills, talent and drive.  Their passion towards their job drives them contribute positively towards product architecture, ownership of their decisions and achieving set goals within a given timeframe. They do not require conventional leadership training focusing on better skill orientations and behavioural dispositions; rather they visualize larger goals of life, larger contributions in product building, concern about leaving behind memorable, profitable and sustainable legacies. They have to be equipped with corresponding acts and activities in order to deal with day to day market realities. This is where BOL tends to guide them.

The idea of BOE primarily focuses on two important Ps, one Product (or service) and another People.  The approach of the entrepreneur has to be such that both of them are aligned to the larger goal of the business proposition and in that direction one has to look beyond short term gains and concentrate on long term sustainability.  We grew up with a thinking of starting small and thinking big.  Though this still holds true I have began to believe that in the times of easy availability of funds one can afford to start big as well as keep thinking big.  BOE shall be an excellent concept to be practiced by the entrepreneurs for the long life of their venture.  I shall dwell upon its practical aspect in my future posts.
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