Focus on the Big Picture, Not the Numbers
Team 1Jade Black
Lauren HeldrethTaylor Hutcherson
Roger MayKody Roach
Blue Ocean Strategy: Chapter 4
The ChallengeHow do you align your strategic planning
process to focus on the big picture and apply these ideas in drawing your company’s strategy canvas to arrive at a blue ocean strategy?
The Typical Strategic PlanLong description of current industry
conditions and competitive situationDiscuss how to increase market share,
capture new segments, or cut costsOutline goals and initiativesFull budget (many graphs/spreadsheets)Done by those with poor communication or
conflicting agendas
Stop filling in the box!
Think Outside the BoxDevelop a clear picture of how to break from
the competitionNo ‘muddle’—easy to understand and
communicate for effective executionFocus on the big picture, not the numbers
Lessens chance that strategy will be a red ocean move
No documents, only a canvasConsistent in unlocking employee creativity to
blue ocean strategy
The Technology Industry…Very hard to break away into a blue ocean
because industry is so fast-pacedApple is trying to become a pioneer—
strategies that have helped:Individual storesInnovation (i.e. ipod/itouch/iphone)Brand managementConsistency (easy to adapt to each product)
Focusing on the Big PictureDrawing a strategy canvas does 3 things:
Shows strategic profile of an industry by clearly depicting the factors (and possible future factors) that affect competition among industry players
Shows strategic profile of current and potential competitors and which factors they invest in strategically
Shows company’s value curve depicting how it invests in the factors of competition and how it might invest in the future
A strategic profile with high blue ocean potential has 3 complementary qualities:Focus, divergence, and a compelling taglineIf not clear, strategy will be muddled, hard to
communicate, and costly
Your Strategy CanvasPlanning around a strategy canvas
Visualize current strategic positionHelps chart future strategyCan focus on big picture, not numbers, jargon,
and operation details
Try not to just focus on the scope of your own responsibilities because it makes consistent measurements of importance difficult—see the dynamics of your entire industry
Step 1: Visual AwakeningReluctant to change
Agree on where you are at
Clarity of a strategy
True strategy v. Tactics
Strategy Canvas
Team 1
Team 2
Step 2: Visual ExplorationSeeing yourself
Through the eyes of others
Alternatives
Rebuilding
Step 3: Visual Strategy FairJudges and individuals from field trips attended
a fair where 12 strategies were presentedAttendees gave EFS feedback on their strategies and
ranked their favoritesManagement realized:
1/3 of what they thought were competitive factors were actually marginal to customers
1/3 of the strategy was either not well articulated or was overlooked in the visual awakening phase
Buyers from all markets have a basic set of needs and expect similar services; if these needs are met customers will forgo everything else
Cont.Following the strategy fair management was able to:
Draw a value curve that was a truer likeness of the existing strategic profile
Create a future strategy that was distinctiveMajor changes as a consequence of the strategy fair:
EFS eliminated relationship management and reduced investment in account executives This dramatically reduced EFS’s costs
Emphasized ease of use, security, accuracy, and speedDelivered via computerization and collapsing its online and
traditional businesses into one compelling offerThese changes substantially cut the operational
complexity of EFS’s business model
Step 4: Visual CommunicationCommunicate the strategy in a way that can
be easily understood by any employeeEFS distributed a one-page picture showing
its new and old strategic profilesPicture served as a reference point for all
investment decisionOnly ideas that would move EFS from the old
to new value curve were acceptedEmployees had to be able to explain the
relevance of investment ideas in relation to the new strategic plan
Visualizing Strategy at the Corporate Level
Can greatly inform the dialogue among individual business units and corporate centerTransforming from a red ocean to a blue ocean
playerFosters the transfer of strategic best
practices across unitsWhen strategy canvas is presented to one
another, there is a better understanding of the other business
Using the Strategy CanvasThe strategy canvas is both a diagnostic and
an action framework for building a compelling blue ocean strategy
EX: Samsung ElectronicsUses key strategy canvas in its key business
creation decisions: established a Value Innovation Center (VIP)
Cross-functional team members come to discuss their strategic projects (focus on strategy canvas)
Establishes a common language system, instilling a corporate culture and strategic norm
Using the Pioneer-Migrator-Settler (PMS) MAPVisualizing strategy can help managers predict and plan the
company’s future growthPioneers:
Offer unprecedented valueMass following of customersBlue ocean strategists: most powerful sources of profitable growth
Settlers : “Me-too businesses”Conform to basic shape of the industryConfined to Red Oceans with low growth trajectory
MigratorsGive customers more for less, don’t alter basic shapeOffer improved value but not innovative valueFall between red and blue oceansReasonable growth expected, but not exploiting potential growth
PMS MAP
Depicts the scatter plot of a company’s portfolio of businesses
PMS ExerciseValuable to managers who want to see
beyond today’s performanceToday’s market share is reflective of
historical performanceEX: CNN entered U.S. news market
Chief executives should use value and innovation as important parameters
In Review• Focus on the big picture, not the numbers.• Drawing your strategy canvas• Visual Awakening• Visual Exploration• Visual Strategy Fair• Visual Communication
• Pioneer-Migrator- Settler Map• Settlers• Migrators• Pioneers
Overcoming the Limitations of Strategic Planning
•Traditional strategic planning can be ridiculous waste of time due to:
•Being documentation driven•Number crunching•Excessive bargaining•inflexibility
•However, managers have an appetite for change•Building the process around a picture changes process.
Questions?