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Pursuing “disruptive” innovation through BLUE OCEAN STRATEGY

Blue Ocean Strategy is a strategic approach founded by W. Chan Kim and Renée Mauborgne, Professors at INSEAD and Co-Directors of the INSEAD Blue Ocean Strategy Institute.
It is based on the results of a cross-industry study of 150 strategic moves made by relevant business players in each industry during over 100 years.

According to this approach, organizations have to shift their focus from competing in existing “Red Oceans” –where all the actors in play struggle on price to grab a slice of shrinking demand –  to creating “value innovation”, in order to attract new demand and capture uncontested “Blue Oceans”. This means that a Blue Ocean is a business or an industry that still does not exist, where demand must be created and rules of the game, too. However growth and profit opportunities are far superior here.

“Value innovation” is a strategic move that is able to simultaneously create new value for the market, and reduce costs for the organization. It follows that Blue Ocean Strategy challenges all the cornerstones of traditional competitive strategy, such as the differentiation vs. low cost trade off, and the assumption according to which an industry structural conditions are given and not changeable.

Connecting ideas to customers’ needs through HUMAN-CENTRED DESIGN

Human-centred Design (HCD) means that a product or service is projected around its current or potential end-users’ habits, needs, desires, and unexpressed thoughts. In other words, it means creating something meaningful and usable for the customer– and not something complex and over-featured, to which you have to adapt.
HCD iterative process consists of 4 main steps:

  • Collect people insights through observation, interviews, contextual inquiries, usability testing and heuristic reviews
  • Analyse collected insights to understand people and unlock patterns (e.g. user experience, persona profile etc.)
  • Generate ideas to solve problems along user-experience or to create new value
  • Rapidly produce prototypes for selected ideas and test them

HCD method is either useful to create a new product/service or to improve an existent one.
Its main benefit resides in the power of visual thinking, an approach that requires all people involved in the process representing everything visually. This way teamworking gets more effective since the risk of misunderstanding is minimised and ideas can be discussed easily.

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Making things happen through NEURO-LINGUISTIC PROGRAMMING

Neuro-linguistic Programming (NLP) provides tools for the achievement of individual excellence and outstanding results both personally and professionally. It consists in a method through which people reprogram the way their brains respond to stimuli in order to manifest new and better behaviours.
The best way for you to grasp the essence of this approach is by reading some quotes by Richard Bandler,  considered one of the fathers of NLP:

  •  “When you want new results, it requires new thinking.”
  • “Brains aren’t designed to get results; they go in directions. If you know how the brain works you can set your own directions. If you don’t, then someone else will.
  • “Do you want to know a good way to fall in love? Just associate with all your pleasant experiences with someone, and disassociate from all the unpleasant ones.”

TOOLS

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  • BLUE OCEAN STRATEGY
  • HUMAN-CENTRED DESIGN
  • NLP FOR BUSINESS

The Blue Ocean Strategy set of tools can be divided into three groups:

  • The first one involves all the frameworks through which an organization analyses:
    • the current state of an industry, visualising the factors existent players compete on, and their performances across factors, according to customer perception (AS-IS Strategy Canvas; Value-Curve)
    • its portfolio, separating the me-too products/services, from those that excel in their market, and those that represent blue oceans (Pioneers-Migrators-Settlers Map)
  • The second set relates to the frameworks that help expand the strategic focus, by looking beyond existing demand (Non-Customer Framework), and reconstructing market boundaries to create blue oceans (Six paths Framework).
  • The third refers to the creation of a value-innovation to attract NON-customers, by deciding which factors should be eliminated, which ones should be created, and which should be raised/reduced above/below the industry’s standard (Four-actions Framework; TO-BE Strategy Canvas).

The Human-Centred Design tools help the team visualize problems, ideas and solutions.

  • The investigation into customers and NON-customers’ lives is conducted using interviews and contextual inquiries, where people are asked questions while performing their activities in the context.
  • The understanding phase encompasses tecniques that help:
    • map all the actors that have a stake in a specific product/service/business and their mutual relationships (Stakeholder Mapping)
    • draw fictional characters that represent the most important characteristics of customer or non-customer targets (Persona Profile)
    • represent each step of a customer-journey, and identify “pain points” (Buyer-experience Cycle; Storyboarding)
    • analyse product/service usability assuming the end-user perspective (Usability test; Heuristic Review)
  • The idea-generation occurs in a structured way, giving teamworkers some constrains within which generate solutions (Creative Matrix), and asking them represent visually the final concepts (Concept Posters).
  • The prototyping step is preceded by selection of the solution to implement, according to available resources (Importance/Difficulty Matrix) and definition of priorities (Bull’s Eye Diagramming)

NLP tools can help develop powerful business relationships and successful teams, redirect unproductive behaviours and become persuasive leaders.

Some principles and techniques associated with NLP include:

  • Internal maps of the world: everyone has his/her own perception of the world, that determines  behaviours and emotions. Established patterns can be reprogrammed to achieve better results.
  • Representational Systems: we consciously or unconsciously process experience using sounds, pictures, feelings, tastes. Our preferred representational systems influence our actions and performances. Communication should always keep that into account.
  • Filters of the mind: how distortion, generalisation and deletion limit our experience.
  • Meta-programming: in the everyday life we usually apply patterns related to verbal, non-verbal, and para-verbal communication, personal attitudes, thinking style and so on. Understanding and shaping our meta-programs can be useful to reprogram our lives and our interactions with other people.
  • Anchoring: connections we deliberately or unintentionally create between physical stimuli and emotions, can help access specific emotional states within important business situations.
  • Reframing: we can change the way we perceive situations, people, locations, by bleaching related memories that influence our current behaviour.
  • Future Pacing: a useful method to embrace change by visualizing a future situation dealing positively with it, and anchoring those positive feelings
Prova

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