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Introduction to Blue Ocean Strategy: How to Start your Growth Innovation Project
Introduction to Blue Ocean Strategy: How to Start your growth Innovation Project
Namit | Podcast | December 26, 2024

Speaker: Mr. Ioan Carpus, Managing Partner at Six Paths Consulting

Interviewed by: Dr. Nitin Batra, Head of Amity Institute of Training and Development

About: Mr. Ioan Carpus is an apprentice as well as a practitioner under one of the world’s foremost leaders in innovation, Mr. Chan who has also links with INSEAD. Ioan is an innovation adviser and Blue Ocean Strategy, expert. He is also certified by the INSEAD Blue Ocean Strategy Institute. He has experience in applying this approach very widely. He has worked with successful projects with names like Heineken, Bridgestone, Astra Zeneca, Goodrich, GSK, 3M ALD Automotive, amongst others. He has worked personally with W Chan Kim, the Founder and Co-author of Blue Ocean Strategy and worked with the Malaysian Government as well as the private sector. He is based in Belgium with his family, and he spends time in Europe and elsewhere supporting clients.

Q. Tell us also about the multiple options that you had after INSEAD. Why innovation? Let’s talk about you, your family, about Belgium and then why innovation?

Ans:  I’m born in Romania I thought I will become a lawyer or judge, so I went to Law School of Romania and then at 23 my career plan changed. My wife wanted to pursue PhD, we moved to the UK and I already made the first switch in my career to web development, getting completely new skills, enjoyed that but I realised that and then BI would allow me to get a broader understanding of business and do something that I like. So luckily, I was accepted in INSEAD and I studied in both the Singapore and Fontainebleau campus where I met Nitin, we had good times together both in the study and in social groups. I recommend INSEAD again to everybody, it’s a great experience and it was the time when I came across the Blue Ocean Strategy honestly I never heard about it before but I was in the group of Chan Kim the author of the book and I was mesmerized by the promise and then interestingly it was the time when he got endowment to set up a think tank to advise the Malaysian public sector using Blue Ocean Strategy so I start moving in Malaysia it kind of ticks three boxes, I have in my wish list changing the country/continent, working in consulting and working on innovation. So, I enjoy the experience there and what I gained most was the practical aspect of innovation work with Blue Ocean strategy working along with some experienced consultants and applying this in all kinds of projects from working with agencies and ministries on from vocational schools to police reforms and other smaller types of engagements.

So back to Belgium, in 2010 my wife started work for European Commission I decided to continue the work in innovation but setting up my consulting boutique. So from here kind of work across different industries, different types of companies and geographies but eventually I expanded from purely let’s say working with Blue Ocean Strategy to filling more exhaustive needs of clients in the area of innovation management that includes helping them strengthen their innovation capabilities from depending on their innovation readiness status but that could include large projects or just supporting them with different partners we have such as AI-driven start-up scouting or a qualified business design platform and so on. But I think we should talk more about the Blue Ocean Strategy and align the expectations of people.

Q. Often seems to me that there is a particular kind of organisation or a team that’s ready to be challenged, that’s ready to innovate and if you work with these kinds of organisations and teams, they already have a mindset that it’s not just our intuition but the customer insights that are going to drive real change the more we dig into it size the more we look at insights from different perspectives we will have a better answer.

A small example I was working with stopping smoking in Johnson and Johnson and one of the insights that we had for several years is some smokers don’t want to accept the challenge of quitting a cigarette it’s too much of addiction but also a joy to have a cigarette. There are even 30% of smokers that are happy smokers so we looked at this insight slightly differently and said for those reluctant quitters can we have an easier process where they can smoke but they can also use alternative products, our products and feel the pleasure of cigarettes decrease so there comes a point where they shrug their shoulders and say I’m not enjoying the cigarette anymore I can just switch completely to Johnson & Johnson brand and then ultimately quit.

But that was because J& J was interested in innovation and they were thinking about challenging themselves. My question to you is do you see the world divided into these two types of organisations, organisations that get you in, that want you to help them innovate are already innovating whereas organisations that need innovation may be behind or that they may not even know or may not fully accept that they need to be disrupted. What is your sense?

Ans: When I started working on innovation on my own 10 years ago companies were thinking about innovation, but it was something trendy, nice to have, many people confused innovation with R&D or technology and so on. I’m happy to see that 10 years after there is a huge acceleration and more and more corporates are building their internal innovation capabilities, so they are creating the organisational structure to allow a corporate innovation team, they employ innovation processes, so we talk about the actual innovation funnel but also some front-end innovation processes tools and all kind of innovation activities from innovation labs to hackathons, designs prints and so on.

But of course, you have different degrees of success. For many, unfortunately, it’s all stops at the theatre level, you would have probably heard about this expression I like it the innovation theatre where you kind of pretend you do but other companies, I think the key was the right support of the leadership, very important and the true understanding of innovation which is one part of your strategy so basically your organic growth strategy is through innovation. So, if you can understand this as a leader and create the right structure, processes, and people then you have the alignment, and you can drive innovation top down. I know people talk about bottom-up but with my experience, you can have very innovative people but if they don’t have the governance support innovation fails.

Q. If I’m one of the listeners here can I look at my organisation and in 3 or 4-5 minutes understand am I truly innovative, am I preparing for a future tomorrow or I am in a situation where I may be growing but I’m becoming complacent in that growth. What is the question or a set of questions I can ask myself to say I’m innovative or complacent?

Ans: I think being innovative should be the purpose, it should be mean to achieve the purpose. The purpose should be to win over your competitors or to increase your revenues and profits. So, I see 2 types of drivers for innovation like a market-driven where companies have a reactive approach. Given an example of my project with a global car leasing company, at least in Belgium it’s a very mature market and over the years now it’s a consolidated market the players divided the market shares, and their value propositions are very similar, so they mainly compete on price. So, it’s a bit of a download spiral because they gradually reduce the price, they gain a bit of a market share, but eventually, they just reduce the price, so everybody loses. That’s one of the great tools in the Blue Ocean strategy.

I am already introducing the so-called strategy which allows you to visualise your value preposition but compared to your competitors so let’s say you have the price and then other non-price value factors, but you don’t just visualise them in terms of just to be done pains and gains you assign some relative numbers versus your competitors. So, let’s say I don’t know what the ease for signing the contract whatever I’m just making up what are the key competing factors you can say my offering is lower versus 5 of the market leaders so then when once you plot all your factors of your value proposition and you assign numbers you see where you deliver value and it’s a great exercise because first, you align your team your internal team into where you are at the moment versus the competitors and this is the place to start for your future initiatives, now I’m not saying that you should deliver more value to every single factor because that brings us back to give what customers want and that was the tagline of the 90s and many companies went bankrupt because by giving more you increase your cost structure a lot sometimes companies tend to give even where customers don’t appreciate.

So the idea is to go through this process could be design thinking or blue ocean strategy, do all this structure analysis, validate with this ethnographic research and other types of experiments and understand what can you eliminate so things that are pain points or are not appreciated but you invest what can you reduce and then what can you raise truly important factors and what can you create factors that the industry didn’t offer so I’m already introducing you to the pattern of blue ocean strategy if you want to challenge a bit the way of thinking about strategy so that’s one example of looking at your competitors see where you are and imagine where it could be.

Q. The idea of winning against competitors look at what is driving your business value, what are the elements and then how do you rank versus existing and future competitors. At this point, I wonder if we can also get from our participants which areas of business they are involved in I would love to take some of the examples from there and see how different value drivers can be created but if I take another example of let’s say a coffee chain, so if you’re a coffee chain if I understood what you’re saying you would look at customer convenience, the flavour of coffee, the food offerings, the time to serve etc. as a value driver, or location as value drivers and then you will see how you rank versus competition. Should I get that right?

Ans: Exactly so actually going beyond what we talked about one difference between let’s say Blue Ocean Strategy and Design Thinking it’s front-end innovation process. In the blue ocean strategy, you have some principles that allow you to untap into new markets space like you mentioned the blue ocean is a metaphor for a new market space that you could create. So, in addition, to try to do better than your competitors assuming you do that let’s say incrementally innovate and you might get a market share increase of revenues and maybe profitability.

But the idea is to explore the so-called non-customers so who is refusing your offering as an industry who is not even addressed right by the offering in the industry and try to create some value propositions that taps into those potential demands as well expanding the total demand just to clarify some of the jargon because I think the blue ocean metaphor was great for making this theory very popular and catchy but also is a bit of a sometimes overused jargon I think makes this whole blue ocean strategy approach not so trustworthy because you have these people always talk about blue oceans and red oceans but effect you should get down to strategy. If you do that you can be sure you’re on the right path.

Q. Is that what you’re pointing towards that at the end of the day you must still launch from where you are rather than shift completely to new business models which don’t make strategic sense?

Ans: I think it depends a lot on how you define the scope of your project. You could say I only want to improve my business so then you just look at like I mentioned your value proposition as and 2B going through an understanding of your customers, competitors looking at ways to create and then you have something fine.

But the process is almost like the double diamond in design thinking so you have areas of convergent thinking, analytical thinking but then you have divergent thinking the creativity part and you cannot know ever from the beginning what you will end up with if you are more bearing it depends a bit on a company and the project sponsor you could aim at creating something more so there as kinds result could be one or more value propositions or even business models completely different from what you do daily so could be adjacent or even transformation, innovations and that’s the ultimate goal but in the process, you can also improve your core business so I’m not saying that you shouldn’t be in your coffee company anymore but you keep that score the kind of a cash count but then you build several revenue streams and now manage a portfolio of products and services.

Q. Can I check with you here what happens next so you figured out where you would like to differentiate and then you start to think about ideas to come up with a strategy? What happens next in your experience, what’s the key next step?

Ans: You start from competitors you go through customers or let’s say buyers because you might have different stakeholders like in pharma have patients, you have the doctors as separate stakeholder groups you try to analyse their pain points across the customer journey and then like you said you move into the creativity parts you have this framework called the six-part framework which employs 6 creativity tools to allow you to bring potential value that you might consider building in your value proposition and then you go into convergence mode again so now you employees there’s a framework called ERRC Eliminate, Reduce, Raise & Create. You go back to it as a strategy canvas and you look at all the insights from your workshops and the framework because all the assumptions should validate by customer interviews, fieldwork observations otherwise they might not reflect the reality at all.

Experimentation is key so I think to your point maybe what’s missing in the blue ocean strategy is employing sound experiments even beyond the customer interviews and field observations especially as you move towards like I mentioned ERRC when you build several value proposition prototypes you should employ some other experiments that bring a greater evidenced strength, think of fake landing page some subscription form even almost like a fake store sale specially for the digital solutions you have lots of tools also with Google Analytics and so where you start to measure the willingness to buy, your pricing you can adjust your pricing so now you’re with this type of experiments have a greater degree of evidence so I think you should combine like what’s in the book but with other tools techniques that are available over there.

Q. We work with clients and talk about the agile way of implementation but in the broader definition of agile, so running experimentations teams and making alterations and changing quickly. Is that the approach you use, or do you use a version of that or a different approach when it comes to driving experimentation because that is the key part?

Ans: I think being agile comes after the first part so first, we have design thinking or blue ocean strategy so once you take a challenge into a prototype level and you can move into a big deal and go to market, I think agile starts when you actually start working on the product and then you can try, learn, iterate and so on in an agile manner but what you are talking about prototype or maybe the MVP.

Q. In your experience when it comes to the blue ocean you talked about the limitation around the experimentation part which I would say it’s not a limitation it’s an addition that you have to think about when you are implementing blue ocean. Are there any other limitations of the blue ocean in your experience?

Ans: Limitation in a way that you shouldn’t just do what’s in the book. When the book was written the purpose was not to empower people to go and do it. The first day it started as a management theory and eventually the more they learned about a company doing it this kind of processing tool was developed but of course like in any other theory or any other tools you should combine it with other tools that help you fulfil your objectives. But in terms of limitations of the blue ocean strategy, I would say not of the theory itself but sometimes it sounds scary for the company to try to convince the CEO to employ a blue ocean strategy project they might think like you said in the notes example of the coffee shop they might think of oh am I supposed to completely pivot my business model? no like I said you should not and also when you look at your existing portfolio of products and services there’s a tool called pioneers migrator setters lab.

So, think of the BCG metrics the growth-share that looks at the past to think how to act now in the present. Here this pioneer migrator settler is like a way of looking at your portfolio but to predict who should be your pioneer basically because you don’t attach the cash counts you want to defend and maybe notes improve slightly but you don’t want to pivot them. But you can start with other products and services existing or something completely new from scratch to make them pioneer so the future growth drivers of your whole portfolio. So, going back to the limitation I think you need to properly align the expectations of the stakeholders, so I had this problem quite a few times in the past, so I had two types of potential clients. People who read the book and they are willing and excited to do that and people who were kind of negative because part of it they saw this as not for them. I don’t want to destroy my existing business, it’s not for me whereas I told you can apply virtually to anything.

Q. In your experience the clients that have effectively innovated, what have they had as an approach and attitude a value perhaps even other elements like geography and the competitive space that have made them more friendly towards innovation.

Ans: I mainly work with large companies, I also work with SMEs and start-ups but my core is the large companies just because that the projects are larger so require some sort of resources but also for start-ups sometimes the teams they naturally order by instinct they kind of explore great things and they come up with amazing value propositions and business models but the problem is incorporating people have a different mindset, they are mainly good at what the daily kinds but first of all, they are not alliance with these kinds of objectives of creating mid-term growth even the CEO they are appointed for shorter times that their mandate would expire or reviewed so I think that’s a problem in itself but you have more visionary more open-minded CEOs who are willing to adopt this kind of innovation initiatives and not just initiatives but I mentioned that many are building their strong internal capabilities which is great news for everybody. That’s what we all want to do, to contribute to creating a better world not competing against each other, there’s room for everybody to create and share the benefits.

So, I think your question about the mindset of the top leadership is very important, in terms of geographies probably I am biased, I cannot because my examples are not related to some statistical proof but outside in North Europe companies are more open-minded so clients in the Netherlands are more likely to innovate and support the innovation not that just run training that goes for it with this objective of executing it. But then I have engagements also in South Africa in Saudi so there’s everywhere there’s a huge desire to innovate. So, I don’t think geography plays a role, not anymore.

Q. Is there something that companies can do at a DNA level which just helps innovation thrive on its own, not driven by consultants like you and I we might support them in creating the DNA but not driven by that or not driven by senior management I’m kind of going back to that idea of the first solar cell being developed by an employee in Exxon because he wanted to and Exxon allowed him space to do it. Can there be 100 such examples within companies in the future, what will it take for a company to have a DNA which just allows innovation to thrive on its own?

Ans: DNA to me equals culture and to me, culture is not something that you could act upon directly that’s the result of strategy actually and structure. So, if you want to have this kind of employee with room to create, to innovate then it should have a good alignment of an employee innovation team, innovation activities aligned with specific strategic objectives so eventually, you will end up with a more innovative culture. I started to give some examples of different types of activities a corporate would employ. Nowadays you have in large corporates they’re building innovation capabilities, sometimes they just buy idea management platforms, and they hope that if the employees will contribute ideas some miracle would happen.

I think many companies saw that after the initial excitement first having the right governance to select those ideas and make them happen is many times missing, so it was, I think a bit of a disappointment, this kind of idea management platform. But if you combine this with you know a leadership programme with internal VC so you have those people the owners of the idea forming a team of two or three and then have a process let’s say like with milestones reviews every 90 days or so, guided by the core innovation team, guided with mentoring them with innovation processes and tools so they can take that challenge and go to tested prototype ready to go to market then you have a much better chance of winning at innovation. In addition, I mentioned the start-up scouting so many companies just acquire or partner with start-ups that’s a huge activity and many others.

Q. Now that the age of innovation is here, it has been here but it’s here at a level where we’re almost at an inflexion point a company that’s not thinking about innovation will soon find itself noting the minority with a lot of companies thinking about innovation. Now I want you to put on your visionary hat, imagine 10 – 15 years from now, what is the corporate landscape that we are seeing are, are we seeing 100 Google’s, are we seeing the replacement of the current biggies, is there chaos or is there smaller niche ideas. What is the world that you’re seeing?

Ans: I think there is room for opportunities for high growth businesses in many areas. So, if you just think of artificial intelligence the applicability is in almost any industry, in banking, in insurance in automotive, in aerospace. So, the question is whether the existing companies will resist, or they will succumb and make room for other players. If we talk about banks, I think the banks will stay because we keep talking about fintech disrupting and killing the banks, but the problem is that FinTech’s resolve a problem, but banks have hundreds or thousands of products and services so yes, they may be better in one product or service but overall, the capabilities of large banks allow them to build or buy similar disruptors themselves.

So, I think of course not all banks will stay but those who know how to adapt to digital transformation will be going to win. For others, I can only imagine as you do. We imagined SpaceX 15 years ago, who imagined that Apple would surpass one trillion dollars in our lifetime we saw that company growing to create great products, but I think nobody imagined that will become the largest company in the world at some point. So, I think it will be some acceleration into treating this type of giant in different areas.

Q. How sensitive do you think we need to be to this overall macro changes which are like Tsunami that is coming and second how sensitive companies are or are it lets innovate but still there is an assumption of business as usual almost.

Ans: I think maybe one big driver is a bit related to what you said about changes in consumer trends in let’s reuse instead of buying new. I think one of the biggest drivers is sustainability and that requires innovation. We’ve seen a few years ago things like CSR and so on so companies try to adopt things that they could claim, make them socially responsible. Then we have seen some governments trying to enforce some rules and regulations, but I think the real tsunamic comes from businesses moving in this direction. So, you said it very clear there’s a shift in customer trends and preferences towards sustainable business models, products, and services and with that, there are investing companies so we talk about private equity and venture capital firms who prefer to invest in this type of businesses and eventually it will be like a growing effect, a snowball effect.

To give an example my sister-in-law lives in New York she pooled her passion plan from an existing fund, and she moved to a fund which only invests in non-oil and non-hydrocarbon, non-military companies so also the millennials I think have a strong mindset towards this. So, things will change fast in our lifetime.

Q. When you think about an innovation project, they’re almost like three or four levels of innovation projects that you can think about. One is incremental more revenue for your existing business model another is opening it up to consumer trends, which is slightly higher and you are open to more change and then at the other extreme where you say I’m going to reinvent myself completely is innovation at the level of vision, innovation at the level of leave the consumer aside, leave the business model aside, leave the competitors aside, what is the change that you want to see in the world, as a company what future do you want to realise.

Is that how you look at innovation as well in terms of its impact at these three levels that you and I are speaking about in the first part of the discussion the first part which is what the business wants to grow into just now we ended our discussion about where the consumer is heading is there a third party where the company ignores the consumer and incrementality and says why do I exist let’s figure that out guys and let’s figure out what is the future I want to create and innovate at that level. What’s your take on that?

Ans: I think that’s mainly valid for start-ups so I think somebody who wants to put a little thing in the universe would rather start their things so I’m seeing lots of social entrepreneurs impact investors committed and by the way there’s this initiative run by the INSEAD I was part of the facilitating process last year to define what would be the challenge for next time and then we chose the food because the food is like accounting for over 25% of CO2 emissions and through this, I met a lot of amazing people completely dedicated.

Q. Tell us a bit more about what that challenge was, what is INSEAD trying to accomplish and what role you played?

Ans: You probably know there are many clubs and movements within the huge alumni community around the world, but this one was called a community impact challenge and it’s created by alumni here in Belgium, Paolo an Italian who said, what if we commit INSEAD to become carbon-neutral by 2030 is the community and he said okay INSEAD can do somethings the people driving powerful businesses can do their things but I can try to inspire everybody through a bottom-up approach to come and contributes to that and also spiral this spirit.

So the first year he proposed no single use plastic challenge basically would people sign up on this and I think there were over 5000 people who signed up around the world and for 30 days they were encouraged not to use single plastics and make sure they don’t buy food with this kind of packaging and a lot of recommendations and eventually there was an application to help them make better decisions itself so then they said okay they had a great impact why don’t we run each year one kind of challenge so then last year during the pandemic I volunteered to facilitate a large group of a few 100 people split in different sessions on different time zones and we started by allowing them to suggest all kinds of topics or areas where we could work on and eventually through voting we came to food and then from there we developed a set of recommendations and so on so last autumn we had the second challenge to reduce your red meat even try to become a vegetarian, try to reduce foods coming from Chile or whatever or don’t eat tomatoes in the winter and so on. So, there is an increasing awareness and commitment to this in the alumni community.

Q. Leadership in individual form is limited by what an individual decides to do and what impact an individual decides to have. IOAN I think it’s a great example of democratising innovation and letting individuals take charge of it. What do you think?

Ans: Yes, I think you can have employees coming up with this kind of thing but remember the companies are very hierarchical and structured organisations, so I think if you want this type of initiative to succeed, you must teach those people to pitch effectively to the top leadership team so then they support the initiative.

So, with the innovation, you have the tools to even support you to build a business case which eventually you can show to the CEO that there’s a win so the employees’ engagement will increase and you as a company would look better because you’re aligned with the development goals.

Q. Any final words for what you would do or say to those of our participants that are team members that our team leaders that our organisation leaders on how they should shape their coming days.

Ans: I think my advice would be to go and try to do it, you don’t have to do it perfectly there’s never such a thing but that’s part of the spirit of the innovation you do, accept that you might fail but you quickly understand where you made mistakes and fix it and then improve. It’s a bit of agile as you rightly mentioned but I think we should all innovate to address small and large challenges that mankind is facing.

Nmait Chauhan
Namit
Namit Chauhan is a skilled professional with experience in digital marketing, content creation, and business administration. He holds an MBA in IT & Finance from Amity University and a BBA in International Business. He has demonstrated abilities in developing and executing marketing campaigns, creating engaging content, and contributing to organizational goals.
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Frequently Asked Questions
Get answers to commonly asked questions about Amity.

What is Blue Ocean Strategy?

Blue Ocean Strategy is referred to as creating a new market space or "blue oceans" which are not contested and therefore free from competitors, while competition occurs in saturated markets, "red oceans." It is the strategy of innovation and value creation.

How does Mr. Carpus apply Blue Ocean Strategy?

Mr. Carpus applies this strategy by helping organisations identify unique value propositions and innovate beyond traditional competitive boundaries that improve their growth potential.

What is the contribution of Leadership to the Blue Ocean Strategy?

An innovative culture requires effective Leadership and strategic alignment needs leadership to customize organisational structures. Leadership training under AITD is aligned with best practices for supporting the application of Blue Ocean.

Can small businesses benefit from Blue Ocean Strategy?

By using Blue Ocean Strategy, small businesses can identify their niche market and differentiate themselves from large corporations. AITD offers programs in support of business, big or small, to do this.

What role does customer insight play in innovation?

Customer Insight is indispensable for innovation success. AITD provides courses on how to effectively use customer insight in product development.