W. Chan Kim and Renee Mauborgne in 2004 wrote about competitive marketplaces coining the terms Red and Blue Oceans. The Red Ocean is the analogy that represents contested markets where there is a constant fight for dominance. However, a Blue Ocean represents an uncontested marketplace because it is newly created. Through their research, they identified that the companies that have succeeded over the long term are the ones that have continued to prioritize the creation of new Blue Oceans instead of fighting wars of attrition in trying to maintain a hold of market share.
Blackberry is an example of achieving the Blue Ocean by pairing their cell phones with an e-mail service in 1999. For several years, they dominated the mobile market and maintained a stronghold in business sales. The market eventually became saturated with competitors. Instead of trying to create a new evolution, they chose to fight for the maintenance of market share. Their corporate death followed.
Most MBAs leading organizations will repeat these stories of failing to innovate and continue to fall into similar traps. As organizations grow, their expectations with shareholders, analysts, and executives verbalize innovation but their behaviors stress stability and repeatability. Having a desire to create a foreseeable performance leads to the development of safe evaluation models. As a result, models that are predictable in nature which directly leads to favoring incremental over disruptive initiatives. It is easier to predict incremental innovations. Empirically grounded initiatives are easier to recover from if they fail.
The disruptive and Blue Ocean initiatives fall into a different category, one of unpredictability. Financial modeling, returns on investment, and customer adoption are all unknowns with proposing a disruptive initiative. Because the data is poor, the market is yet to be defined, and the risks are significant which leads to organizations inherently guiding back to choosing safer incremental projects. However, these incremental gains are only tactical maneuvering to win a battle in a war that will continue for years. The disruptive model is the strategic approach that will lose a handful of battles in sacrifice to win the longer-term war.
It is easy for an executive and management team to tell their teams to be more creative. Bring forward disruptive ideas, and to be the beacon of innovation. There are two specific occasions where these plans fail. Starting with roles built for standardization and not for innovation. For example, a pharmacist technician refilling a prescription would not want to be creative when following a standardized procedure. This would be targeting the creativity to areas more apt for innovation versus providing a generalized notion to be creative.
Secondly, to kill an idea as it is brought forward. Because the organization doesn’t have the capability, capacity, or courage to act on those ideas. As a result, the innovator becomes dejected. Due to this, they lose faith in the organization that the organization will act upon the best ideas.
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