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Overfished Ocean Strategy

In their 2005 blockbuster Blue Ocean Strategy, W. Chan Kim and Renée Mauborgne invited the business world to leave behind the crowded waters of the existing market and instead search for—or create demand in—the uncontested market space. If Blue Ocean Strategy is new to you, you can start your exploration with Blue Ocean Strategy, Wikipedia,http://en.wikipedia.org/wiki/Blue_Ocean_Strategy. “The only way to beat the competition is to stop trying to beat the competition. In red oceans, the industry boundaries are defined and accepted, and the competitive rules of the game are known. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set.”

Kim and Mauborgne’s invitation offered a striking contrast to Michael Porter’s positioning concept. With the powerful advice of the latter, companies for decades claimed their victory by finding the best spot—a unique position on the crowded competitive landscape. The work of Michael E. Porter, such as Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: The Free Press, 1998), is the best illustration of the positioning approach. Following the fresh invitation of the former, other companies strived to avoid the crowd by discovering a new market space—swimming into the “blue ocean” waters far away from shark-filled blood-red existing markets. For more on this approach, see W. Chan Kim and Renée Mauborgne, Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Boston: Harvard Business Review Press, 2004). What a great idea! However, at the core, the “blue ocean” companies studied by Kim and Mauborgne operate and invent withinthe same resource constraints as their “red ocean” counterparts, oblivious to the collapsing linear economy and all the pressures associated with it. As the linear throwaway economy is approaching its collapse, this old economic order is running its course. Whether red, blue, or rainbow, the oceans are getting excruciatingly empty, and those managers who deeply understand and master this shift are able to use the new reality to power up radical innovation and secure a remarkable competitive advantage. As they ride ahead of the wave, new products, new business models, new markets, and new profits follow. Behold the Overfished Ocean Strategy.

A new economy is being born, transforming the collapsing linear throwaway economy into a more lasting, more abundant, more sustainable version of itself. The transformation brings about a new economic reality, where we compete and win using a radically new set of rules. While the companies, people, and projects pioneering these new rules are still rare, there are enough of them to suggest the first few essential principles that allow managers to innovate their way into a new world. Five new rules of the trade—five essential “secrets”—appear increasingly important for individuals and companies eager to power up a new strategic direction and secure the source of a truly sustainable value:

• One: From line to circle.

• Two: From vertical to horizontal.

• Three: From growth to growth.

• Four: From plan to model.

• Five: From department to mind-set.

Together, these approaches inspire radical change and drive disruptive innovation across countries and industries—and my task is to make them work for you too. In the chapters that follow, I invite you to explore each of the principles in depth and discover companiesthat have already mastered them. Here is an introduction to this very different—and very hopeful—future.