For a project I’m working on, I dug out my old copy of Blue Ocean Strategy. It’s a classic (and excellent) business book from way back in 2005, and the premise is simple: if you take the time to analyze your market, you have the opportunity to choose a different strategy than the competition, which puts you in a “blue ocean” (as opposed to the “bloody-red ocean of competition”; I know, gross…) where you really don’t have competitors. Examples are Southwest Airlines and Cirque du Soleil. They changed the rules of the games in the airline and circus industries, and ended up way ahead of everyone else.
Picking up the book this week reminded me of a specific technique that I like a lot. The authors call it the “Four Actions Framework,” and it’s the part where you start to pick apart the status quo strategic assumptions. You take a look at your industry, and ask yourself four questions:
1. Which of the factors that the industry takes for granted should be eliminated?
Here’s where you identity parts of the industry that really aren’t delivering enough value any more, but everyone keeps doing it because, well, we’ve always done it that way (example: Southwest getting rid of meals).
2. Which factors should be reduced well below the industry’s standard?
Here’s where you identify parts of the industry where competition has been jumping over each other so much that customers end up being “over-served.” In other words, the standards have become too high (and too costly), so you can reduce them (e.g., premium seating).
3. Which factors should be raised well above the industry’s standard?
Here’s where you identify areas where customers have been forced to compromise by an industry that is unwilling to make the hard choices (e.g., friendly, authentic customer service and speed of airplane turnaround)
4. Which factors should be created that the industry has never offered?
Here’s where you discover new sources of value and create demand for it. (e.g., frequent point-to-point departures).
Eliminate, Reduce, Raise, Create. Take a look at your strategy and see if there are any opportunities for innovation. By the way, I’ll be you’ll end up thinking of many things to raise or create, but the authors point out that frequently it’s in the reduce and eliminate that the greatest strategic advantages are unlocked.