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?