Lessons - The Blue Ocean Strategy | Renée Mauborgne - Co-Director of INSEAD

In this lessons episode, discover how organizations can embrace innovation without falling into the zero-sum game of disruption. Learn about the concept of non-disruptive opportunities, how to foster forward thinking within legacy companies, and why balancing short-term competition with long-term creativity is key to sustained growth. A lot of this conversation has spoken about an entrepreneur that's thinking about building something from scratch, but there's also the opportunity for people within organizations to adopt a more non-disruptive mindset. So how do we foster that culture of non-disruption because I don't think that even in a legacy organization, I mean, even getting a legacy organization to disrupt, it's just like a hard enough thing to do. So how do we get them over that hump all the way through to, okay, just be forward thinking, be non-disruptive, create in this lens. How does a company do that? Somebody's listening to this, VP, C-suite, and a Fortune 1000. What do they take away? I think the first thing I want to take away is to start a discussion on it, to ask people to think about this idea and whether it makes sense to the organization, you know, the one thing that you find is that when you ask, you know, and this is where the theory of disruption has been, you ask an established company to disrupt themselves. First of all, if you ask them to disrupt an existing industry, they understand that they're going up against big pires with big resources. They know it's not an easy win, but the alternative is they often say, you know, disrupt your own industry before someone else does, but no one wants to disrupt their own industry because the second I tell myself, disrupt myself, what happens to me as an organization? Actually, I fill myself with fear because what I'm saying is make myself irrelevant in a sense. So first thing is that you have to understand within an established organization, disruption is harder to, in many respects, from our perspective, it's harder to absorb because I think it's politically and emotionally difficult for organizations to overcome that. And so there's often a lot of pushback, you know, we have a quote in our book from an oil executive that, you know, saying that, you know, when you have three quarters of your organization focused on fossil fuels and you have these existing new issue industries that are green energy trying to displace and destroy this, but we're not too excited about putting out our livelihoods here. So we find ways to slap overhead on the new industry, the new businesses, and, you know, make it difficult and so people want to jump shit from there. And so, so let me just say that, but I think very importantly, we say to organizations, you know, we all need to innovate. No one is going to deny that. Innovation, if there's one cost in the future, is we need to innovate to stay ahead, especially global competition and tense. And especially today, with people being concerned with the recession on the horizon, or maybe being felt now, everyone has different perspectives, but it's difficult right now. No doubt is difficult. I can be difficult for the next few years, especially if we have de-globalization and cost structures rise because of that. And so the question is, people are going to be tight with their money. So, at last, you're innovating in the marketplace and doing something special, you can expect your demand to shrink. So we need innovation. Now, there's two different types of innovation. I can disrupt and displace, or I can also pursue these non-destructive opportunities where I look for growth and innovation outside of my industry, but it doesn't have to be far outside, right? So when video game makers created eSports and jumped on to and created their own teams and and their own adapted to multi-game players, they created non-destructive industry, but it was right next to their industry. So to simplify Scott, you can have both disruption isn't that easy for a lot of established companies, but we found non-destructive a bit more, because I'm not displacing myself. I'm looking for new opportunities. And the first step is I need to have a discussion. What is this? Does it make sense? Do we need to innovate and should we pursue disruption? Or maybe some of our unit units should, because those industries are asleep at the wheel. And maybe there are these industries where we see we really can see existing problems that have been unaddressed, that we can or newly emerging ones, we can do some non-destructive. And I'd want to have that discussion. And I think that's the first thing I'd really want to do. And then, you know, if I want to take it further, I'd start to ask my team, all right, these are the two paths, you know, an existing problem we've taken for granted that people are really struggling with. I want you to go, give me two weeks, go think about that, one team of my people, and another team newly emerging problem or opportunity we could create. And let's come back in three weeks knowing these two and let's brainstorm what ideas we have and how can we start thinking about that. And that would be the way I would start a conversation, so I start to open people's mental space to that. Yeah. You know, when I was doing research for this, I saw a paper that you put out for the Harvard Business Review about value innovation. Was this, was value innovation the first iteration of this concept that just evolved? So, evaluations are our research is a 30 year journey. I realize that 2004, I was, I was surprised it wasn't something 2014. It seems like this has been an emerging concept for a while. Well, value innovation was actually became a classic, so it was republished. Value innovation was actually first published in 1997. Oh my goodness. Yeah, so we have, and we had a series of best selling Harvard Business Review articles. And then they asked Harvard and a few publishers asked us for about five years to write a book. We said, no, we have nothing really simple and important. We believe to say that can make a real difference to business. And then we took five more years, and then we eventually came out with our first book, Blue Ocean strategy. And we got pushed back because competing is everything. And we said, we're not, we're not challenging competing. We're just saying there's competing and there's this non-destructive opportunity called creating. Let's look at it. And then, you know, we did that, it grew, and then we started to see all this disruption. And we say, why do we, why are we always playing a zero-sum game? I mean, do you know where the zero-sum game comes from? I don't actually know. What's the, I know the, I know what it is, but I don't know where the zero or a shit. And business fundamentally comes from more. It comes from military strategy. Interesting. And the key defining a factor of military strategy, there's only so much land. So for me to advance and gain more territory, I have to do it at your expense. Because there's the amount of land that exists on this beautiful earth is limited. So my win must come at your loss. But when we took, so that's why we used chief executive officers front line staff, right? We use all these still military terminology in companies without understanding realizing it. And when military strategy moved into business strategy, innovation, infiltrated all of business, we took with it the key limiting factor, which is that limited land that you have to zero-sum game. When in business, the only limitation is our imagination. The amount of industries have exploded over time. And so we say, why do we accept that key limiting factor of war in a space that has no such limitation? We can, our limitations are imagination. All these industries, if you look at the industry classification systems done by governments, they have exploded over time in an exponential way. And so we said, why should we play that zero-sum game when we can play a positive some gain and keep growing that pie for all of us and make it better as opposed to only fighting. And so it seems to keep back. I was going to say we keep defaulting to this, so because even though blue ocean is a very widely recognized concept, then disruption, again, turns into a zero-sum game. So it seems to be the comfortable place that humans always go back to. Well, that is true. I think to a lot of extent as what was certain. So I would say, yeah, I was going to say a certain type, but I would say, yes, I think a lot of people find that they're looking for that growth and comfort don't really coexist. You want to get more muscles. You have to strain yourself. You have to hurt, right? Every time we grow, we have to step into discomfort to expand that. So there was some of that. There's also just the histories for for longer, right? Going all the way back. Sun Zoo in an interesting way, you always talk the best way to win a war is not to enter the war. But you're right about that. It is a high default. But we will start keep charging forward in our way because we see that it is possible. We can decodify that. And I think organizations can get a lot better. And just because something is doesn't mean I fully agree that it should be. And we're going to keep marching forward. Sasca, I hope you'll march forward with us. And I will definitely end your right. History is long. History is very long. And there's a lot to learn from it. And you know, let me say another thing's that to clarify. You know, competing has a role as this creating. They both do. Unfortunately, business is no longer monotone. We have to manage paradoxes. We have to be good short term and we have to think long term. We have to understand how to disrupt it as well, disruption matters, but also we have to understand non-destructive opportunities. So it's more challenging in that sense. But to not accept that reality is to sort of bury our head in the sand and hope that our body doesn't get hit. Thanks for tuning in. If you found this valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want to dive deeper into this conversation, check out the links in the description to watch the full episode. See you in the next one.