Archive for June, 2010

Blue Ocean Strategy Sucess Stories: The Success of Starbucks

Thursday, June 10th, 2010

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In today’s overcrowded industries, competing head-on results in nothing but a bloody red ocean of rivals fighting over a shrinking pool. Companies have long engaged in head-to-head competition in search of sustained profitable growth, they have fought for competitive advantage, battled for market share and struggled for differentiation. Blue Ocean Strategy argues that tomorrows leading companies will succeed not by battling competitors, but by creating “blue oceans” of uncontested market space, where competition is rendered irrelevant of companies that made competition irrelevant in their industries to elicit the strategic logic behind Blue Ocean Strategy.

Starbucks did not take away from its competitors or make coffee go away. It simply made it more popular!

Starbucks began in 1971 when three academics—English teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker—opened a store called Starbucks Coffee, Tea, and Spice in the touristy Pikes Place Market in Seattle. Starbucks has since then increased to over 13,000 stores nationwide.

How has Starbucks been so successful?

The primary reason Starbucks has experienced such great success is their business model that is all about people worldwide. From customer service to employee benefits their business model focuses on the people.

They have their own coffee farmers and harvesters, their own roasters, and carefully followed recipes that are just their own, including the Frapaccino. They offer the best payment plans and benefits packages available to all of their farmers (something that many of these people have gone without for generations), they have great payment plans and benefits packages for their local employees including fantastic benefits for their part time employees (something that doesn’t happen very often), and with this idea of people they have worked hard to please those that work hard to please their customers.

Customer service has always been a high priority with Starbucks. It is why a manager or assistant manager at a Starbucks receives at least 80 hours of training and a barista receives 40 hours of training before they are allowed to make drinks without supervision.

CEO, Howard Schultz, figured out how to attract, motivate, and reward store employees in a manner that would make Starbucks a company that people would want to work for and that would result in higher levels of performance. Moreover, Schultz wanted to cement the trust that had been building between management and the company’s workforce. In 1995, Starbucks implemented an employee stock purchase plan. Eligible employees could contribute up to 10 percent of their base earnings to quarterly purchases of the company’s common stock at 85 percent of the going stock price. The total number of shares that could be issued under the plan was 4 million. After the plan’s creation, nearly 200,000 shares were issued; just over 2,500 of the 14,600 eligible employees participated.

Schultz’s approach to offering employees good compensation and a comprehensive benefits package was driven by his belief that sharing the company’s success with the people who made it happen helped everyone think and act like an owner, build positive long-term relationships with customers, and do things efficiently.

Starbucks’ focus on its employees has lead to great customer service. As a result, Starbucks has achieved elite brand recognition that of Coca Cola.

How was Starbucks so successful in the coffee industry without destructing other companies?

Starbucks did not take away from its competitors or make coffee go away. It simply made it more popular!

First, Starbucks has great attention to detail in stores. The employees are well-trained and qualified to make specific drink orders. They offer a wide range of types of coffee, drinks, food, etc. Customers who are particular about their orders are confident when they go to a Starbucks.

Second, Starbucks has been able to attract coffee and non-coffee consumers by offering a wide variety of drinks, coffees, food, snacks, mugs and other paraphernalia. Their plethora of products offered complements individuals of a wide range to have an interest in Starbucks.

Thirdly, Starbucks has transcended traditional coffee houses into a pleasant experience. The well-trained and happy employees provide quality customer service. They are pleasant and consistent in service. Starbucks has also transitioned coffee into a social platform. People gather at Starbucks to relax, read, use the internet, meet for business or chat with friends, etc.

The success of Starbucks has only increased the popularity of coffee and tea amongst consumers. Furthermore, Starbucks has been able to attract the non-customers through there business model of focusing on people. Consequently, Starbucks’ success has experience great success in the coffee industry without destructing competitors.

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Blue Ocean Strategy & Innovation in the World Today: Entrepreneurs with 35,000 Ideas for BP

Tuesday, June 8th, 2010

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Innovation has often been seen as a random experimental process. Blue Ocean Strategy challenges traditional innovation theories and offers systematic methodologies for creating blue oceans of uncontested market space and highly profitable growth. Blue Ocean Strategy challenges traditional innovation beliefs that innovation is trial and error must be done by an entrepreneur and opportunities and risks come together. Blue Ocean Strategy in contrast, offers analytical tools and frameworks that help organizations minimize risks while maximizing opportunities to achieve profitable growth.

BP has received almost 35,000 ideas in just over a month on how best to clean up the millions of gallons of oil from the biggest spill in U.S. history. So far, only four have made it into testing.

That has left people such as Ken Griffin and James Reindl frustrated. Both run companies that specialize in oil cleanup products they say are more efficient and less toxic than what’s in use in the Gulf. They contacted BP through its online suggestion box to offer help. Griffin on May 29 received a form letter saying his product is being considered, a month after he submitted it. Reindl has heard nothing, he said. “We think we have something to contribute,” Griffin said. “It’s just not at all clear what the chain of command is down there.”

The proposals face a grueling—some say sclerotic—vetting, called the Alternative Response Technology Triage Process. The suggestions gathered through phone calls and the website, run jointly by BP and the U.S. government, are fielded by 70 workers. The most promising are then reviewed by 43 engineers from BP, the U.S. Coast Guard, and other U.S. agencies, according to Graham MacEwen, a BP spokesman.

If the ideas—which range from soaking up oil with human hair to enlisting oil-eating microbes—are seen as practical and don’t overlap with proposals already being explored, they’re sent to smaller teams of engineers to see if they can be applied, MacEwen said. About 800 proposals have made it to this stage, with just one-half of 1 percent of those in testing, he said. Most are duplicative or infeasible, MacEwen said.

Reindl is co-owner of Ecser Holding, maker of a devulcanized-rubber product called Spill-Cure that can absorb up to eight times its weight in petroleum products, he said. Reindl understands it’s tough sorting through so many suggestions. “Still,” he said, “it’s frustrating for a group like us. It’s like, ‘Guys, we’re right here.’ ” Griffin’s company, Impact Services, makes Pristine Sea, a clay-based product that binds crude into soft clumps that can be skimmed from the water. The company says it has been tested in the Baltic Sea, and Louisiana State University is currently testing Pristine Sea on samples from the Gulf spill. “When things like the spill happen, everybody comes out of the woodwork with their own brand of magic dust, but often it hasn’t been tested,” says Greg Broda, executive vice-president at Impact Services. “We have a viable, tested, nontoxic product, and we’re having a problem getting anyone to listen to us.”

One of the few ideas already in testing is centrifuge technology developed by actor Kevin Costner and his scientist brother Dan. The Costners didn’t go through the technology triage process. They had help from Billy Nungesser, president of Plaquemines Parish, a district in Louisiana. Nungesser sent a letter on Costner’s behalf to Doug Suttles, BP chief operating officer for exploration and production.

Director James Cameron, whose film Titanic gave him experience with the use of underwater remote vehicles, was invited to the Environmental Protection Agency with a group of scientists June 1 to discuss possible solutions. Even with help, Costner’s firm has met with delays, and open-water testing won’t start until this week.

The bottom line: Ideas on how to clean up the Gulf spill have been flooding in. But few have made it into actual testing, frustrating entrepreneurs.

Article Business Week

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Blue Ocean Strategy & Innovation in the World Today: Trying to Reinvent the Wheel

Thursday, June 3rd, 2010

Stop Trying to Reinvent the Wheel

Image by Business Week

“Not Invented Here” is a common organizational attitude that wastes a lot of time.

Right now, in meetings at corporations around the world, the wise are suffering. They are trapped in rooms where debate rages over how to solve a problem. The rub is that the problem has already been solved, just not by someone in the room—and solutions from outside are ignored. This is the disease known as “NIH,” or “Not Invented Here” syndrome, and it’s alive and well in 2010. Despite our many technological advancements in communication, none have eliminated this perennial waste of time. Why is this problem so hard to shake? Will we always be confronted with people who insist on reinventing wheels?

The key reason people look to reinvent things is that they don’t know what’s already been done. Ignorance, one way or another, is the leading cause of wasted effort everywhere. People who don’t spend time studying the problems they’re trying to solve are bound to reinvent something, and likely not nearly as well. There are only so many ways to design a website, a marketing campaign, or even a product strategy. Instead of driving minions into further brainstorming sessions, it would be wise to ask: Who else has tried to solve this problem? Can we learn from what they have done?

The second reason for reinvention pertains to ego and rewards. In many corporations there is more prestige to be gained for making something new than for reusing work done elsewhere in the company or industry. This is true even when the newly made thing is much worse that what already existed. An executive might proclaim the wonders of the new (worse) thing to his division without encountering anyone willing to stand up for the old (better) thing. It’s harder to inflate the importance of one’s own work if the key decision was to buy or borrow from elsewhere. The verbs “make,” “invent,” and “create” lead to more promotions than “reuse,” “borrow,” or “convert.” In Pavlovian terms, if a culture rewards unnecessary reinvention more than it honors wise reuse, the ambitious will follow suit. Asking people to behave one way while rewarding them for another has predictable results. The counter notion to NIH—”PFE,” or “Proudly Found Elsewhere”—has been talked about before, but I’ve rarely seen it thrive.

Even worse: “Never Anything New”

Some say that patent laws drive many to reinvent, but this is a cop-out. Anyone who has read a few patents knows that they are limited to very specific kinds of ideas. But the fundamentals of web design, product development, and team organization are problems that managers reinvent all the time. The solutions are well-explained on shelf after shelf at any bookstore. There are dozens of e-mail applications, cell phones, and department stores; it’s a reasonable bet that few of the things that make them good or bad are protected by patents. A wise competitor can study, learn, and apply those lessons without resorting to theft or copying.

Then, too, some organizations are plagued by NAN—”Never Anything New.” This is arguably worse than “NIH.” At least with the latter, there’s a chance of something better happening, however slim. For organizations stuck with NAN, there’s no chance for progress. If just one of your competitors learns from your best ideas, they’ll leave you in the dust.

Recently, the word “curation” has been rising in popularity, driven by the growing recognition that the way in which things are combined can transform the ordinary into the superior. Most people don’t think at the level of curation, and as a result obsess about minute details that are irrelevant to the goals—especially if those details are the only things for which they are responsible. If you put a sack of groceries in the hands of a talented chef, you’ll get a great meal. If you put the same sack in front of NIH-loving middle managers, they’ll insist on inventing their own vegetables.

Good leaders, like good designers or good curators, recognize the rare skill of combining things together well. They hire, lead, and reward with that in mind. There’s a time to reinvent and a time to reuse, and the best minds know that both approaches have their place.

Article by Business Week

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Blue Ocean Strategy & Innovation in the World Today: 100 Awesome Quotes on What it Really Takes to Innovate

Tuesday, June 1st, 2010

1. “I want to put a ding in the universe.” - Steve Jobs

2. “Ideas won’t keep. Something must be done about them.” - Alfred North Whitehead

3. “Intuition will tell the thinking mind where to look next.” - Jonas Salk

4. “If you have always done it that way, it is probably wrong.” - Charles Kettering

5. “If you can dream it, you can do it.” - Walt Disney

6. “Security is mostly a superstition. Life is either a daring adventure or nothing.” - Helen Keller

7. “You can’t solve a problem on the same level that it was created. You have to rise above it to the next level.” - Albert Einstein

8. “Do not fear mistakes. There are none.” - Miles Davis

9. “The creation of something new is not accomplished by the intellect, but by the play instinct arising from inner necessity. The creative mind plays with the object it loves.” - Carl Jung

10. “There is only one thing stronger than all the armies of the world: and that is an idea whose time has come.” - Victor Hugo

11. “If you lose the power to laugh, you lose the power to think.”
- Clarence Darrow

12. “Ideas are like rabbits. You get a couple and learn how to handle them, and pretty soon you have a dozen.” - John Steinbeck

13. “To accomplish great things we must dream as well as act.” - Anatole France

14. “It is the essence of genius to make use of the simplest ideas.”
- Charles Peguy

15. “There’s no good idea that cannot be improved on.” - Michael Eisner

16. “We don’t see things as they are, we see things as we are.” - Anais Nin

17. “We don’t know a millionth of one percent about anything.”
- Thomas Edison

18. “The best vision is insight.” - Malcolm Forbes

19. “Genius is infinite painstaking.” - Michelangelo

20. “Nothing will change the fact that I cannot produce the least thing without absolute solitude.” - Goethe

21. “Neither a lofty degree of intelligence, nor imagination, nor both together, go to the making of genius. Love, Love, Love. That is the soul of genius.” - Mozart

22. “Swipe from the best, then adapt.” - Tom Peters

23. “Give me the young man who has brains enough to make a fool of himself.” - Robert Louis Stevenson

24. “You can expect no influence if you are not susceptible to influence.” - Carl Jung

25. “Whether or not you can observe a thing depends upon the theory you use. It is the theory which decides what can be observed.” - Albert Einstein

26. “Whatever you can do, or dream you can, begin it. Boldness has genius, power and magic in it.” - Goethe

27. “Sit, walk, or run, but don’t wobble.” - Zen proverb

28. “The greater the contrast, the greater the potential. Great energy only comes from a correspondingly great tension of opposites.” - Carl Jung

29. “We don’t know who discovered water, but we’re certain it wasn’t a fish.” - John Culkin

30. “I will act as if what I do will make a difference.” - William James

31. “There is no such thing as a long piece of work, except one that you dare not start.” - Charles Baudelaire

32. “What is now proved was once only imagined.” - William Blake

33. “Remember, a dead fish can float down a stream, but it takes a live one to swim upstream.” - W.C. Fields

34. “99 percent of success is built on failure.” - Charles Kettering

35. “If the only tool you have is a hammer, you tend to see every problem as a nail.” - Abraham Maslow

36. “Not everything that counts can be counted, and not everything that can be counted counts.” - Albert Einstein

37. “The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” - F. Scott Fitzgerald

38. “The ultimate creative thinking technique is to think like God. If you’re an atheist, pretend how God would do it.” - Frank Lloyd Wright

39. “I start where the last man left off.” - Thomas Edison

40. “Never confuse motion with action.” - Ernest Hemingway

41. “The greatest invention in the world is the mind of a child.” - Thomas Edison

42. “No matter how well you perform, there’s always somebody of intelligent opinion who thinks it’s lousy.” - Sir Laurence Olivier

43. “You must do the thing you think you cannot do.” - Eleanor Roosevelt

44. “I’ll play it first and tell you what it is later.” - Miles Davis

45. “The way to get good ideas is to get lots of ideas and throw the bad ones away.” - Linus Pauling

46. “Discovery is seeing what everybody else has seen, and thinking what nobody else has thought.” - Albert Szent-Gyorgi

47. “A pile of rocks ceases to be a rock pile when somebody contemplates it with the idea of a cathedral in mind.”- Antoine Saint-Exupery

48. “Without a deadline, baby, I wouldn’t do nothing.” - Duke Ellington

49. “You miss 100 percent of the shots you never take.” - Wayne Gretzky

50. “In the beginner’s mind there are many possibilities; in the expert’s mind there are few.” - Shunryu Suzuki

51. “Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.” - General George Patton

52. “The man with a new idea is a crank - until the idea succeeds.” - Mark Twain

53. “A problem well stated is a problem half solved.” - Charles Kettering

54. “The best thinking has been done in solitude. The worst has been done in turmoil.” - Thomas Edison

55. “Don’t be afraid to take a big step when one is indicated. You can’t cross a chasm in two small jumps.” - David Lloyd George

56. “The silly question is the first intimation of some totally new development.” - Alfred North Whitehead

57. “A man is not idle because he is absorbed in thought. There is a visible labor and there is an invisible labor.” - Victor Hugo

58. “Money never starts an idea; it is the idea that starts the money.” - William J. Cameron

59. “Systems die; instincts remain.” - Oliver Wendell Holmes

60. “You will never find the time for anything. If you want time, you must make it.” - Charles Burton

61. “Whenever anything is being accomplished, it is being done, I have learned, by a monomaniac with a mission.” - Peter Drucker

62. “One of the illusions of life is that the present hour is not the critical, decisive one.” - Ralph Waldo Emerson

63. “The lightning spark of thought generated in the solitary mind awakens its likeness in another mind.” - Thomas Carlyle

64. “I failed my way to success.” - Thomas Edison

65. “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.” - Margaret Mead

66. “The way to succeed is to double your failure rate.” - Thomas Watson, (Founder of IBM)

67. “Innovation opportunities do not come with the tempest but with the rustling of the breeze.” - Peter Drucker

68. “The enterprise that does not innovate ages and declines. And in a period of rapid change such as the presentâ€¦the decline will be fast.” - Peter Drucker

69. “You can only be as good as you dare to be bad.” - John Barrymore

70. “No idea is so outlandish that it should not be considered.”
- Winston Churchill

71. “Conclusions arrived at through reasoning have very little or no influence in altering the course of our lives.” - Carlos Casteneda

72. “After years of telling corporate citizens to ‘trust the system,’ many companies must relearn instead to trust their people - and encourage their people to use neglected creative capacities in order to tap the most potent economic stimulus of all: idea power.” - Rosabeth Moss Kanter

73. “If the creator has a purpose in equipping us with a neck, he surely would have meant for us to stick it out.” - Arthur Koestler

74. “If you do not express your own original ideas, if you do not listen to your own being, you will have betrayed yourself.” - Rollo May

75. “Nothing is more dangerous than an idea when it is the only one you have.” - Emile Chartier

76. “There’s always an element of chance and you must be willing to live with that element. If you insist on certainty, you will paralyze yourself.” - J.P. Getty

77. “Almost all really new ideas have a certain aspect of foolishness when they are just produced.” - A.N. Whitehead

78. “Our best ideas come from clerks and stockboys.” - Sam Walton

79. “The gift of fantasy has meant more to me than my talent for absorbing positive knowledge.” - Albert Einstein

80. “Every act of creation is, first of all, an act of destruction.” - Pablo Picasso

81. “Time flies like an arrow. Fruit flies like a banana.” - Groucho Marx

82. “Imagination is more important than knowledge.” - Albert Einstein

83. “Genius, in truth, means little more than the faculty of perceiving in an unhabitual way.” - William James

84. “Vision is the art of seeing things invisible.” - Jonathan Swift

85. “The best way to predict the future is to create it.” - Alan Kay

86. “If you go to your grave without painting your masterpiece, it will not get painted. No one else can paint it.” - Gordon MacKenzie

87. “Taking a new step, uttering a new word, is what people fear most.” - Fyodor Dostoevsky

88. “There is a vitality, a life force, that is translated to you into action, and because there is only one of you in all time, this expression is unique. And if you block it, it will never exist through any other medium, and will be lost.” - Martha Graham

89. “We have approximately 60,000 thoughts in a day. Unfortunately, 95% of them are thoughts we had the day before.” - Deepak Chopra

90. “Confusion is a word we have invented for an order that is not yet understood.” - Henry Miller

91. “I refuse to be intimidated by reality anymore. What is reality? Nothing but a collective hunch.” - Lily Tomlin

92. “Now that we have met with paradox we have some hope of making progress.” - Niels Bohr

93. “Microsoft is always two years away from failure.” - Bill Gates

94. “We’ve reached the end of incrementalism. Only those companies that are capable of creating industry revolutions will prosper in the new economy. - Gary Hamel

95. “If I have a thousand ideas and only one turns out to be good, I am satisfied.” - Alfred Noble

96. “I’ve been doing a lot of abstract painting lately, extremely abstract. No brush, no paint, no canvas, I just think about it.” - Steven Wright

97. “You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.” - Steve Jobs

98. “I am looking for a lot of people who have an infinite capacity to not know what can’t be done.” - Henry Ford

99. “You can have brilliant ideas, but if you can’t get them across, your ideas won’t get you anywhere.” - Lee Iacocca

100. “I can’t understand why people are frightened of new ideas. I’m frightened of the old ones.” - John Cage

Article by Alltop