By Larry Cecchini, President and CEO of Secure Designs
As IT service providers, we are used to competition coming at us from all sides, but it doesn’t mean we have to like it. For years I’ve searched for inspiring ways to stand out from the crowd. Then I read Blue Ocean Strategy by W. Chan Kim and Rene Maurbogne (published by Harvard Business Review Press, 2005). It hit me like a lightning bolt. It was grounded in fact, quantitatively analyzed, well substantiated — and it validated the path on which we already were on.
The book is based on a study of 150 case histories of company strategies spanning more than 100 years and 30 industries. The authors’ thesis is that companies can succeed not by battling competitors, but rather by creating “blue oceans” of uncontested market space. These strategic moves create a leap in value for the company, its buyers, and its employees, while unlocking new demand and making the competition irrelevant.
I have a marketing background, but Blue Ocean Strategy made me look at marketing afresh: rather than looking at opportunities and identifying potential needs, success lies in understanding the customer perspective, pain points, and decision drivers and driving this focus back into your own organization, no matter how counter-intuitive it seems at the time. The book goes further, tying different concepts together and pointing to what needs to be done in order for the company to work together and deliver a “blue ocean.”
For me, this crystallized everything that we were trying to do with Secure Designs to separate ourselves from the competition and develop a unique and compelling offering. It helped me to see where we were on the right track and where we needed to raise the bar — for example, creating alignment across the entire organization rather than allowing a few individuals to spearhead the customer initiative that we call “value innovation.”
Creating A Leap In Value
The book articulates the concept of value innovation: instead of trying to outdo the competition in the same field, you try to make them irrelevant by creating a leap in value for your company and your customers. From our own company perspective, the book told me we had the infrastructure of value innovation right there in front of us, but we needed to be even more focused on drilling it down throughout the entire company.
For us, that meant implementing a marketing-oriented culture where in any way possible, from accounts and shipping and receiving to sales and training, we tried to increase the features and benefits of our service while driving the pricing to level that makes it compelling for customers to buy because they can’t overlook the value. Initially this meant violating a lot of preconceptions, but ended up winning us multiple accounts in large businesses as well as the small- to mid-size sector.
The value innovation approach advocated by Blue Ocean Strategy is a powerful motivator for internal teams to change and become a dominant player in a new space rather than going head to head against a close competitor.
Value Innovation Outcomes
Our strategy has led to high customer retention and very low churn. In fact our partners also find that including our services with theirs reduces their churn, too. Our products and services are viewed almost as a no-brainer for what they and their customers want.
This doesn’t mean to say that the competition has disappeared, or that we don’t have to work hard to bring in the customer wins. But the value innovation strategy is flexible and allows for change to accommodate market conditions, customer needs, and technology changes.
Blue Ocean Strategy speaks to me because it takes a collection of theories and concepts about strategic planning and pulls them all together in a very practical way. I have used my learnings from this book to create a mission statement, company vision, and points of culture that allow me to challenge the team at all levels of the company to deliver value innovation as part of their daily lives. For me it is the ultimate in pragmatism.