Monday, March 06, 2006

A Competition Mindset is Thinking Too Small

I've been facinated to support clients as they wrestle with the concepts in the book, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, by W. Chan and Renee Mauborgne, Harvard Business School Press, 2005.

The main premise of this book is that "in today's overcrowded industries, competing head-on results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool." The authors argue that "tomorrow's leading companies will succeed not by battling competitors, but by creating blue oceans of uncontested market space ripe for growth".

In my work with entrepreneurs in creating innovative alliances for their business, I notice that such alliances can be fantastic vehicles to take their respective businesses into unchartered waters and in doing so, leave the competition in their wake. We focus on identifying potential alliances that can expose them to completely new markets, and groups of people or sets of needs, instead of the tried and true.

The classic approach to conducting a SWOT analysis (Strengths, Weaknesses, Oppportunities and Threats) seems far too self-limiting when the focus is almost exclusively on the competition. Such thinking keeps you in the same sandbox as the rest of the players.

It's been my experience that when I have conversations with potential alliance partners, they tend to fall into one of two camps. There are those whose first reaction is resistance... they look down, shake their heads, fold in on themselves and almost literally shrink before my eyes. Then there are others who look up and out, eyes lit up with possibility, their gestures become more animated and inclusive. They connect with my idea and then expand it outward to include their perspective. Sparks of generativity fly! Both they and the ideas themselves become larger as we speak.

So… the next time you conduct a business analysis… challenge yourself to look well-beyond the traditional thinking of, “Who is my competition?” and begin to look at questions like, “How can I reach more people and benefit other businesses by creatively aligning myself with others?"