Blue Ocean Strategy and Design Thinking Part 01

Blue Ocean Strategy and the ‘Design-Thinking’ have a fair amount of similarities in their respective thought processes. Integration of BOS with Design-thinking has the potential to provide a holistic business solution.

DO NOT LOOK AT THE COMPETITOR

Design Thinking is nothing but “User-Centered Design” where we designers are trained to focus everything from a User’s perspective. The core principle is “Look at your users and not at your competitors — Tracking competitors is a noise and a distraction”.

“If you attempt to build everything the competition is doing, you won’t be building things the competition is not doing” -Jon Kolko

The ‘Blue Ocean Strategy’ also stresses us not to look at the competitor. The book mentions that “If you keep tracking your competitor, their products, then your product/service may look similar to your competitor and you would fail to differentiate your offerings”. Instead of looking at the competitor, BOS suggests us to focus on creating ‘Value Innovation’.

VALUE INNOVATION

“Value Innovation” is the cornerstone of Blue Ocean Strategy.

“Value Innovation” is nothing but creating a leap in Value offerings to buyers/users, thereby creating new uncontested market space, making competition irrelevant.

BOS says that Value without Innovation is an incremental innovation, which will not help you stand out in a marketplace. Innovation without value to user tends to be technology driven, often shooting beyond needs of users/buyers or what buyers can afford. So, Blue Ocean Strategy suggests us to combine ‘Value’ to User with “Innovation”.

Design-Thinking calls this type of innovation as ‘Meaningful Innovation’ for the user. In Design-Thinking process, designers are not expected to design useful features in the product but expected to design the ‘value’ the product would offer to the user. They firmly believe that only the ‘Value’ would differentiate the product in the market(A view similar to Blue Ocean Strategy). In other words, Creating a new meaning to the life of users. Designers would like to sell ‘Value Offerings’ in terms of ‘Experience’, not in terms of ‘Benefits’. A level above the ‘benefits’.

An example from Jon Kolko’s book “Well Designed” -Google Map’s value offerings is to help people to gain confidence in finding their way quickly and effectively. The product would also try to anticipate what a user would search and why they would search and customize the value offerings.

Example 01 -What can you think of a lamp for home? Yes, it has to be beautiful, modern sculpture, fit into my living rooms, good illumination……wait, those are all common attributes now in every lamp. We need to go beyond that and create a different meaning for the product. If you have to make your non-customers buy the product, you need to change the meaning.

Can you change the colour, temperature of the atmosphere by emitted light? Can it be controlled according to the owner’s mood? Can it influence psychological state and social interaction? Can it make the user feel better? Can the light simulate daylight, seasons whenever needed? Can the light encourage the user to dream, relax, be creative, have love? How can the light provide a different experience to a living room, bedroom, drawing room?

HOW TO CREATE VALUE INNOVATION?

User Research -Design Thinking believes in deep-dive “User Research”(Ethnographic, Empathy, etc…). This research uncovers not only unmet rational needs but the emotional needs and desires of users. These insights help businesses to come out with ‘radical solutions’ to the problem and determine the ‘Unique Value Propositions’.

Design-Thinking’s deep dive research methodology is a perfect one to uncover the “Value Innovation” for Blue Ocean Strategy.

USER TYPES — In Design-Thinking, we segment the product/service users into primary, secondary and tertiary users depending on the usage pattern. We also study the buyers who would not use the products but would influence the purchase decisions which is similar to Blue Ocean Strategy’s User types ‘Look Across The Chain Of Buyers’. To get innovative solutions, the research methodology strongly advises focussing on Extremes and Outliers too.

But there’s a problem in researching only the existing customers.

Nokia was a market leader in mobile phones in the early 2000s with a huge customer base and designs to meet customer needs. They had an efficient research and design team. Their designs were user-friendly and made after extensive research. Nokia thought they were keenly observing people, finding out opportunities and solving the problems. Unfortunately, they became irrelevant sooner than they could predict and respond. They were not as complacent as mentioned in some magazines.

Clayton Christensen says, “Best firms succeeded because they listened responsibly to customers, invested aggressively in technology, manufacturing abilities, designed wonderful products to meet the next generation needs. Same best firms failed after some time, because they listened to the SAME customers, invested again, designed again to meet NEXT GENERATION needs”

If you are just focussing on existing users, you may soon become irrelevant. As the users are getting older, you need the cycle of new generation users.

One of the strong points of ‘Blue Ocean Strategy’ is to focus on ‘Non-customers that would help in ‘Radical Innovations’ which is a primary difference between Blue Ocean Strategy and Design Thinking. BOS clearly states that focusing on existing customers will lead only to incremental innovations.

BOS talks about three tiers of non-customers

  • First Tier — “Soon-to-be” non-customers who are on the edge of your market,
  • The second tier — “Refusing” customers who consciously choose your market
  • The third type — unexplored non-customers who are in markets distant from others.

Nintendo was the leader in game consoles in the late 1980s and early 1990s. With the launch of Sony’s PlayStation and Microsoft’s Xbox, Nintendo lost its leadership and plunged into tough times. Sony and Microsoft were moving ahead with their latest consoles offering high-definition images, powerful graphics, and more complex games. Nintendo realised that it is tough to fight with Sony or PlayStation along with the lines of processor speed, graphics etc…

The games were so complex, that user had to spend a Considerable time to master the game. The cost of the products was high due to high-end processors, and the graphics. The game was accessible only to niche users and experts. Gaming programmers were getting frustrated with changes in hardware with every launch, as they needed to spend time again to relearn.

Nintendo targeted non-customers. In November 2006, the company launched the Wii, a game console with motion-sensitive controllers that allows people to play games by moving their bodies. People could play tennis by circling their arms overhead, play golf by swinging, and engage in combat. Up to that moment, the game consoles were considered as passive, entertainment gadgets. The Wii transformed the virtual game into an actual physical workout.

Wii was way less expensive than it’s competitors because the Wii was equipped with less powerful components than its competitors. They did not need high definition images, high-end processors or heavy graphical interface. The Wii attracted game developers who could create games much more quickly due to less complex graphics. By looking at non-customers, creating a new meaning for the product, Nintendo’ innovation had implications for the entire industry ecosystem.

Written by

Secular Humanist, Business Growth Consultant, Design Thinker, India. Reach me at mmshah8@gmail.com. or https://www.shahmohammed.com

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