What Is Your "Why"? – Vision, Focus & The Golden Circle

Why do you do what you do? What do you truly believe?

I’m convinced that if you can answer those questions all other business challenges will be made more manageable because your vision will be clear. Your clear purpose will inspire your organization to not only be in alignment but also to be motivated to succeed, however you measure that.

Not knowing “why” you do what you do will make it impossible to have a compelling vision. And an organization without a shared vision results in a lack of focus and probably bad decision-making. Reaching your goals may not be possible.

You’ll be “stuck.” John Jantsch says:

The thing that moves people to act beyond what they are currently doing is a vision to do something so compelling that it forces them to change their behaviors in ways that would make it so.

The problem with most business owners is that they are only looking towards next week or next month. What if you looked at making your business and your life multiple times bigger and better than it is right now?

What would that force you to change? What would that force you to stop doing? Where would that compel you to take massive action first?

Easy enough to say, but how do you get to that compelling vision? Simon Sinek tells us to start with “Why” we are doing what we do. His concept is the “Golden Circle” of Why, How, What with Why at the center of it all. Read the rest of this entry »

Blue Ocean Strategy Refined: Focus, Divergence, and a Compelling Tagline

“Focus, Divergence, and a Compelling Tagline. These three criteria guide companies in carrying out the process of reconstruction to arrive at a breakthrough in value both for buyers and for themselves.” – Blue Ocean Strategy

Last time I wrote about Blue Ocean Strategy I covered how the Eliminate-Reduce-Raise-Create framework can help companies develop a “value curve” on the “strategy canvas” that will differentiate them from Red Ocean competitors. Going through that process helps point out where you may be over-engineering your product (spending time and money on things customers don’t really care about) and how you can deliver more value at a lower cost.

Figuring that out for your business is a fantastic achievement, but, according to the authors, there are three more essential characteristics of a good strategy.

Focus

What were we talking about? Oh yeah… Let’s say we’re looking at a strategy canvas (see chart in post). The value curve, points plotted low-to-high for various competing factors such as price, convenience, selection, for a typical Red Ocean strategy would look relatively flat compare to a Blue Ocean. Essentially, Red Ocean companies are trying to compete on all the traditional factors and they end being middling on most.

Blue Ocean companies on the other hand will have a value curve that is radically unbalanced. Competing factors are either very high or very low.

The authors use Southwest Airlines as an example. Southwest focused on “friendly service, speed, and frequent departures” while most airlines tried to compete with meals, lounges, and other things customers don’t care about as much. As a result Southwest was able to lower prices and suddenly they were competing with car travel, not other airlines. Blue Ocean.

Divergence

If you are going for a Blue Ocean Strategy your value curve will diverge from the mainstream. You’ll become less average, and closer to unique or “differentiated.” Clearly focus helps here, as does eliminating and reducing the unwanted, and costly to produce factors. Probably even more important they create new buying factors where there is no competition. For example Southwest “pioneered point-to-point travel between midsize cities” no longer relying on the hub-and-spoke system.

Compelling Tagline

The authors point out that “a good strategy has a clear-cut and compelling tagline.” Oh man. This one can be tough, and it’s something few companies have even if their strategy deserves it. The authors suggest that Southwest could use “The Speed of a plane at the price of a car–whenever you need it.” What could other airlines say? “We’re like all the rest and our prices are high.”

There’s some homework for you, and us. Come up with a compelling, and authentic, tagline. If we can’t do that, maybe it’s time to go back to the strategy drawing board.

Blue Ocean Strategy & Customer Development – Making Products That Sell

The more we work on strategy at AVLM HQ the more I become aware of the overlap of Blue Ocean Strategy and Customer Development. Both are attempts to get at what customers really want so you can develop products they will really buy.

Customer Development interviews for us, so far, have followed Ash Maurya’s methodology of asking potential customers to react to, and rank order what we hypothesized as the main pain points for marketing their businesses. We also ask them if they have other challenges we haven’t listed. The process from there involves creating a “minimum viable product,” getting feedback, possibly through follow-up interviews, and then iterating over and over. That’s a major over-simplification, but good enough for now.

Blue Ocean Strategy is possibly less “greenfield” than Customer Development (as I understand it) in that it begins by looking at the typical “value curve” for a given business category and aims to diverge, significantly. The value curve is a simple chart created by plotting various customer buying criteria such as price, features, etc. on a high-to-low axis. In a nutshell, you want to approximate the industry norms, then create a value curve of your own that diverges by eliminating what customers don’t want and adding what they do.

You get to this new value curve by answering four questions. From the book Blue Ocean Strategy:

• Which of the factors that the industry takes for granted should be eliminated?
• Which factors should be reduced well below the industry’s standard?
• Which factors should be raised well above the industry’s standard?
• Which factors should be created that the industry has never offered?

This is where I think the Customer Development process of interviewing prospective customers can help. At least that’s how we’re approaching it. Real world prospects are telling us what they must have and will pay for, and what they don’t care about. That’s fantastic, but the “create” question is where I think the real value will be uncovered.

Customers may not be able to tell you what they really want because they haven’t even imagined it yet. As helpful and Customer Development and Blue Ocean Strategy are, I’m certain that creating any world-changing value innovation is going to take more than using the prescribed frameworks. Timing? Luck? Vision? Any of those will certainly help.

Blue Ocean Strategy Part 1 – Value Innovation

Google, Salesforce.com and Sequoia Capital just contributed to a $32 million funding round for HubSpot, a Cambridge, Mass., developer of online marketing software.

Company founders Dharmesh Shah and Brian Halligan have said they were influenced by the book Blue Ocean Strategy. Whether they have actually created a “blue ocean,” or uncontested market space, with their product remains unclear to me, but obviously some smart folks have decided to invest in the business.

Red Oceans are crowded with bloody cutthroat competitors. Operating in a Blue Ocean means your “value innovation” has broken through traditional market barriers. You’re not fighting for market share. You’ve created a new market and attracting customers that didn’t previously exist.

Value Innovation is the cornerstone of Blue Ocean Strategy and according to the authors it occurs only when companies “align innovation with utility, price, and cost positions. If they fail to anchor innovation with value in this way technology innovators and market pioneers often lay the eggs that other companies hatch.” As the business cliche goes “pioneers are the ones with arrows in their backs.”

Most companies choose one of two paths:

• The high end: Differentiation by creating greater value at higher cost.
• The low end: Broader appeal through reasonable value and lower cost.

Blue Ocean Strategy means Value Innovation, or simultaneous differentiation and low cost. So there’s the rub. How do you deliver more for less?

If you want to make your competition irrelevant you’ll have to create a new way to meet a market need, and create a new market in the process.

The authors have studied scores of companies and their competitors across over 30 industries as far back as 1880. The bottom line is that businesses with a Blue Ocean Strategy are much more likely to be profitable and successful long term.

There are various analytical tools and frameworks to help create a Blue Ocean Strategy or possibly to identify companies with such a strategy that may be worthy of investment. In some upcoming posts well discuss those. Sound good?