face stock
market pressures and the need to
show profits right away.The public
sector tends to suffer from paralysis
by analysis because each policy
change affects so many people;
moreover, particularly in todays
economy, they are hampered by
limited resources. But once it sees the
positive effects of change, it can move
rapidly, unhampered by short-term
profit and result requirements.
One case study thatmade us believers
that bureaucratic government
organizations can do successful
turnarounds was the New York
Police Department (NYPD). In the
space of two years from 1994 to 1996,
police commissioner Bill Bratton and
his 38,000-strong force took New
York City from the most dangerous to
the safest city in the world. Despite
budget cuts and wage freezes, it came
out with its employees registering the
highest motivation rate, enjoying the
best reputation among the public and
attaining the lowest crime rate ever in
the city.
What you need are people in the
organization who have a commitment
to change, as well as a clear strategy
canvas. If you can engage people
emotionally and intellectually, as we
found in the NYPD example, you can
even beat former General Electric (GE)
chief Jack Welch. Mr. Welch took
more than 10 years to turn GE around
but Bratton did it in two years.
What are the critical success
factors for creating Blue Oceans?
How frequently should the Blue
Oceans be revisited before they
become red oceans, so that Blue
Oceans are continuously created?
A blue ocean strategy will have three
key characteristics: the strategy must
be focused, diverge from the
competitions strategic profile, and
have a compelling tag line that speaks
to the market.
We have to remember that industries
never stand still. They continuously
evolve. Operations improve, markets
expand, and players come and go. If a
blue ocean is created, it will not last
forever. Eventually the competition
will imitate and catch up. As rivalry
intensifies, bloody competition
commences and the ocean will
eventually turn red. If you stay on
this course, your strategy will
converge with that of the competition
and you will be stuck in the
competitive trap once again. The
example you mentioned of Dell
computer, for example, dominated
the blue ocean it had created for more
than a decade. The company,
however, is now in the middle of a
bloody red ocean, with declining
performance. The key is to monitor
your competitors and as their value
curve converges toward yours; you
should begin reaching out for another
value innovation to create a new blue
ocean.
Fortunately, the central tool we use in
creating new blue oceans the
strategy canvas is also a powerful
tool for knowing when you need to
innovate once again. The strategy
canvas is a visual representation of a
companys strategic profile versus its
rivals. A breakthrough strategic
profile has focus, divergence, and a
compelling tagline. Yet once your
competitors strategic profile begins to
resemble your own, you know its
time to start revisiting your strategy
and redraw your strategic profile to
create a newfrontierwhere there is no
or little competition.
