Posts Tagged ‘Blue Ocean Strategy’

Blue Ocean Strategy is not just relevant for corporations and business strategies; it is just as applicable at every scale right from a country’s national strategy, to a small business’ success, to an individual’s career development and even to personal relationships. By taking a big picture view on the competitor’s strategies and with a conscientious effort to make competition irrelevant to success, Blue Ocean Strategy systematically breaks out of red oceans and turns strategy blue. 

In addition to a powerful strategy for profit making businesses, Blue Ocean Strategy is just as applicable to the non-profit sector.

 

Consider the New York Public Library (NYPL). From 2002 - 2004, NYPL funding was cut by 20% due to a budget crisis in the city of New York. At the same time, the level of competition was intensifying as the internet, the new super-size bookstores like Barnes and Noble and Borders, and other modern media were capturing a larger share of the shrinking market. Libraries were increasingly seen as dull and lackluster. In short, the NYPL was operating in a structurally unattractive industry with a shrinking budget and new tough competitors. Following the traditional view of strategy - structure determines strategy that leads to performance - the best the NYPL could have hoped for was to go head-to-head against these new rivals to maximize its share of a declining market. Yet in less than 10 months, from 2004 to 2005, with just two staff, a miniscule budget, and scant additional marketing, Paul Holdengräber, the Director of Public Programs, made the New York Public Library one of the hottest venues in town. All new demand was created as attendance climbed by close to 400 percent. Nearly every public program event is sold out with tickets even trading for price premiums on eBay much like for rock concerts. And New Yorkers are turning again to the library for their source of knowledge. Once again, the library has become one of the most relevant institutions in the City.

In short, in the midst of a once structurally unattractive industry, Holdengräber created a blue ocean of new market space. Through his strategic actions, Holdengräber reconstructed the market, creating win-win performance consequences as scores of once non-customers - people who had never entered the library-rapidly converted into enthusiastic attendees, nourishing their minds and souls in the process.

Just like NYPL, companies and organizations of every stripe - be they in the profit or non-profit domain - can break free of the head-to-head zero-sum competition that characterizes most industries today, to open up blue oceans of new market space.

So, how do we formulate Blue Ocean Strategy for non-profit organizations. Taking the systems view of Blue Ocean Strategy as a strategic systems alignment of value, profit and people propositions, the understanding of value and people propositions remains the same as in the case of profit making businesses. The profit proposition is however handled differently. The profit curve in the non-profit case represents the underlying objective of the non-profit organization (e.g citizen’s welfare, eradicating illitracy etc) instead of the typical maximizing profits objective of the for-profit organizations. Contact me at zunaira@strategizeblue.com to find out more.