By Adam Jusko, ProudMoney.com, adam@proudmoney.com

In 2005, W. Chan Kim and Renee Mauborgne had a big hit with Blue Ocean Strategy, a book that preached the gospel of leaving the bloody red ocean of relentless competition to find/create a blue ocean of plenty. How to do that? Differentiate yourself, perhaps by focusing relentlessly on an aspect of your industry that customers value, while being only OK at things that are less important. Or, combine the best of two related industries while letting their less-attractive and less-profitable aspects fall away.

Examples:

  • Southwest Airlines, going high on service, low on price, while largely doing away with amenities like meals and assigned seating. Customers get a good experience at a low price and Southwest saves money vs. the way other airlines do business.
  • Cirque du Soleil, combining the best of the theater and the circus, while doing away with costly and controversial live animal shows.


When a company really gets it right, their Blue Ocean Strategy brings in customers that previously would not have even considered the industry. When Southwest began, their low fares and fun experience not only stole from other airlines but also brought in people who would have chosen driving or taking a bus/train — the cost difference was small and the experience was better. These people would have seen air travel as too costly/time-consuming for shorter trips before Southwest came along.

I am a big fan of Blue Ocean Strategy, so I was excited to get my hands on Blue Ocean Shift, the sequel. Blue Ocean Shift aims to give you a step-by-step process to find your organization’s blue ocean, then make the move toward it.

Neither one of those steps is easy. It is difficult to get out of the traditional mindset of what industry you are in, who your competitors are, who your customers are. And if you’re lucky enough to figure out where a blue ocean could exist, it is still risky. Number One, you can’t be completely sure that the new strategy will work. Number Two, in order for it to work, you need buy-in from a large number of people. The bigger your company or organization, the harder that buy-in is to get.

Blue Ocean Shift very methodically takes you through the process. You should consider this book an instruction manual, not just interesting theory. Do the first step, and when you feel you’ve gotten it right, only then move on to the next step.

One of the crucial points to keep in mind: make sure the right people are involved, and make sure they are involved from the beginning. You can’t make the Shift if key people aren’t convinced of its potential.

For any company serious about moving away from tweaking features in a dog-eat-dog industry and into a new, profitable space not yet conceived of by others, Blue Ocean Shift is required reading.