Latest / Success Story with Scott Clary / Lessons - The Blue Ocean Strategy | Renée Mauborgne - Co-Director of INSEAD

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Lessons - The Blue Ocean Strategy | Renée Mauborgne - Co-Director of INSEAD · Success Story with Scott Clary

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  In this lessons episode, discover how organizations can embrace innovation without falling into the zero-sum game of disruption.
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  Learn about the concept of non-disruptive opportunities, how to foster forward thinking within legacy companies,
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  and why balancing short-term competition with long-term creativity is key to sustained growth.
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  A lot of this conversation has spoken about an entrepreneur that's thinking about building something from scratch,
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  but there's also the opportunity for people within organizations to adopt a more non-disruptive mindset.
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  So how do we foster that culture of non-disruption because I don't think that even in a legacy organization,
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  I mean, even getting a legacy organization to disrupt, it's just like a hard enough thing to do.
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  So how do we get them over that hump all the way through to, okay, just be forward thinking,
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  be non-disruptive, create in this lens. How does a company do that? Somebody's listening to this,
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  VP, C-suite, and a Fortune 1000. What do they take away?
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  I think the first thing I want to take away is to start a discussion on it, to ask people to think about
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  this idea and whether it makes sense to the organization, you know, the one thing that you find is that
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  when you ask, you know, and this is where the theory of disruption has been, you ask an established
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  company to disrupt themselves. First of all, if you ask them to disrupt an existing industry,
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  they understand that they're going up against big pires with big resources. They know it's not an
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  easy win, but the alternative is they often say, you know, disrupt your own industry before someone else
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  does, but no one wants to disrupt their own industry because the second I tell myself,
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  disrupt myself, what happens to me as an organization? Actually, I fill myself with fear because what I'm
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  saying is make myself irrelevant in a sense. So first thing is that you have to understand
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  within an established organization, disruption is harder to, in many respects, from our perspective,
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  it's harder to absorb because I think it's politically and emotionally difficult for organizations to
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  overcome that. And so there's often a lot of pushback, you know, we have a quote in our book
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  from an oil executive that, you know, saying that, you know, when you have three quarters of your
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  organization focused on fossil fuels and you have these existing new issue industries that are
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  green energy trying to displace and destroy this, but we're not too excited about putting out our
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  livelihoods here. So we find ways to slap overhead on the new industry, the new businesses,
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  and, you know, make it difficult and so people want to jump shit from there. And so,
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  so let me just say that, but I think very importantly, we say to organizations, you know, we all
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  need to innovate. No one is going to deny that. Innovation, if there's one cost in the future,
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  is we need to innovate to stay ahead, especially global competition and tense. And especially today,
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  with people being concerned with the recession on the horizon, or maybe being felt now,
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  everyone has different perspectives, but it's difficult right now. No doubt is difficult. I can
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  be difficult for the next few years, especially if we have de-globalization and cost structures rise
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  because of that. And so the question is, people are going to be tight with their money. So,
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  at last, you're innovating in the marketplace and doing something special, you can expect your
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  demand to shrink. So we need innovation. Now, there's two different types of innovation. I can
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  disrupt and displace, or I can also pursue these non-destructive opportunities where I look for growth
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  and innovation outside of my industry, but it doesn't have to be far outside, right? So when
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  video game makers created eSports and jumped on to and created their own teams and
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  and their own adapted to multi-game players, they created non-destructive industry, but it was
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  right next to their industry. So to simplify Scott, you can have both disruption isn't that
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  easy for a lot of established companies, but we found non-destructive a bit more, because I'm not
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  displacing myself. I'm looking for new opportunities. And the first step is I need to have a discussion.
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  What is this? Does it make sense? Do we need to innovate and should we pursue disruption? Or maybe
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  some of our unit units should, because those industries are asleep at the wheel. And maybe there
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  are these industries where we see we really can see existing problems that have been unaddressed,
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  that we can or newly emerging ones, we can do some non-destructive. And I'd want to have that
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  discussion. And I think that's the first thing I'd really want to do. And then, you know, if I want
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  to take it further, I'd start to ask my team, all right, these are the two paths, you know,
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  an existing problem we've taken for granted that people are really struggling with.
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  I want you to go, give me two weeks, go think about that, one team of my people, and another team
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  newly emerging problem or opportunity we could create. And let's come back in three weeks knowing
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  these two and let's brainstorm what ideas we have and how can we start thinking about that.
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  And that would be the way I would start a conversation, so I start to open people's mental space
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  to that. Yeah. You know, when I was doing research for this, I saw a paper that you put out for
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  the Harvard Business Review about value innovation. Was this, was value innovation the first iteration
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  of this concept that just evolved? So, evaluations are our research is a 30 year journey.
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  I realize that 2004, I was, I was surprised it wasn't something 2014. It seems like this has
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  been an emerging concept for a while. Well, value innovation was actually became a classic,
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  so it was republished. Value innovation was actually first published in 1997. Oh my goodness.
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  Yeah, so we have, and we had a series of best selling Harvard Business Review articles.
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  And then they asked Harvard and a few publishers asked us for about five years to write a book. We
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  said, no, we have nothing really simple and important. We believe to say that can make a real
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  difference to business. And then we took five more years, and then we eventually came out with
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  our first book, Blue Ocean strategy. And we got pushed back because competing is everything.
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  And we said, we're not, we're not challenging competing. We're just saying there's competing and
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  there's this non-destructive opportunity called creating. Let's look at it. And then, you know,
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  we did that, it grew, and then we started to see all this disruption. And we say, why do we,
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  why are we always playing a zero-sum game? I mean, do you know where the zero-sum game comes from?
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  I don't actually know. What's the, I know the, I know what it is, but I don't know where the zero
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  or a shit. And business fundamentally comes from more. It comes from military strategy.
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  Interesting. And the key defining a factor of military strategy, there's only so much land.
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  So for me to advance and gain more territory, I have to do it at your expense.
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  Because there's the amount of land that exists on this beautiful earth is limited. So my win
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  must come at your loss. But when we took, so that's why we used chief executive officers front
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  line staff, right? We use all these still military terminology in companies without understanding
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  realizing it. And when military strategy moved into business strategy, innovation, infiltrated all
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  of business, we took with it the key limiting factor, which is that limited land that you have
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  to zero-sum game. When in business, the only limitation is our imagination. The amount of
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  industries have exploded over time. And so we say, why do we accept that key limiting factor of war
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  in a space that has no such limitation? We can, our limitations are imagination. All these industries,
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  if you look at the industry classification systems done by governments, they have exploded
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  over time in an exponential way. And so we said, why should we play that zero-sum game when we can
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  play a positive some gain and keep growing that pie for all of us and make it better as opposed
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  to only fighting. And so it seems to keep back. I was going to say we keep defaulting to this,
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  so because even though blue ocean is a very widely recognized concept, then disruption, again,
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  turns into a zero-sum game. So it seems to be the comfortable place that humans always go back to.
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  Well, that is true. I think to a lot of extent as what was certain. So I would say, yeah,
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  I was going to say a certain type, but I would say, yes, I think a lot of people find that they're
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  looking for that growth and comfort don't really coexist. You want to get more muscles. You have
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  to strain yourself. You have to hurt, right? Every time we grow, we have to step into discomfort
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  to expand that. So there was some of that. There's also just the histories for for longer, right?
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  Going all the way back. Sun Zoo in an interesting way, you always talk the best way to win a war is
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  not to enter the war. But you're right about that. It is a high default. But we will start
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  keep charging forward in our way because we see that it is possible. We can decodify that.
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  And I think organizations can get a lot better. And just because something is doesn't mean I
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  fully agree that it should be. And we're going to keep marching forward. Sasca, I hope you'll march
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  forward with us. And I will definitely end your right. History is long. History is very long.
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  And there's a lot to learn from it. And you know, let me say another thing's that to clarify.
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  You know, competing has a role as this creating. They both do. Unfortunately, business is no longer
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  monotone. We have to manage paradoxes. We have to be good short term and we have to think long term.
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  We have to understand how to disrupt it as well, disruption matters, but also we have to
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  understand non-destructive opportunities. So it's more challenging in that sense. But
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  to not accept that reality is to sort of bury our head in the sand and hope that our body
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  doesn't get hit. Thanks for tuning in. If you found this valuable, don't forget to hit that
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  subscribe button so you never miss an episode. And if you want to dive deeper into this conversation,
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  check out the links in the description to watch the full episode. See you in the next one.