Tuesday, November 11, 2008

Blue Oceans and Black Swans in the current economy

I have been fortunate to meet both the authors (Kim Chan and Renee Mauborgne though at different times spread over a year) of Blue Ocean Strategy, the much talked about book. Both authors present a contrasting style when discussing the book and the Blue Ocean Strategy and that got me thinking a lot about how does one go about creating strategies that can be indeed classified as Blue Ocean way of steering a company ahead.

When I met Kim in a high power talk, it was motivation enough to read the book. The book was a wonderful collection of facts presented together to justify the Blue Oceans v/s the Red Oceans or the competitive scenario in which all of us operate. But the question that remained unaddressed is that how many companies had their executives read the book, engaged consultants and then came up with a real Blue Ocean strategy which was implemented and found successful. I have yet to find any.

Almost a year later, the meeting with Renee was to that extent different, where I was a bit skeptical as well as started asking many within the audience whether they had read the book and found any of the principles making a difference in their strategic thinking. Reality is everyone who had read the book liked it, but had no answers to the question that continued to haunt me.

And then a few weeks back I read Black Swan by Nassim Nicholas Taleb and I found solace in the fact that most theories are created to justify what happened; rarely a theory has been applied to create the impact that it justifies by looking at the past.

Putting both of them together, the conclusion that I draw is that tactical strategies may bring short-term results, long-term strategies may work to a point, and then the unexpected comes along and thought leaders (?) will create new theories to justify them.

So what has all this got to do with a CIO ? Well IT organizations end up at the receiving end when Red Oceans and Black Swans come together as it is the case right now. Budget cuts, manpower pressures, outsourcing and vendor management, all of these are here to stay. What Blue Ocean strategy keep the Organization afloat and the CIO busy ? If I do find some answers, you will see them here. If you have any, do post them here.