Filtering Blue Ocean Ideas: Strategic Overlays

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Filtering Blue Ocean Ideas: Strategic Overlays

When developing Blue Ocean Strategies with organisations we find that some of the Blue Ocean ideas generated, while great ideas, do not fit with where the organisation is prepared to go.
For example, due to its exploration of non-customer insights, a bank might identify a great blue ocean opportunity in an otherwise unrelated business services sector (while exploring industry boundaries). But the Board and Management might decide it is not an area they wish to expand into or pursue due to limited resources or other constraints.
So we try to have clients establish a broad set of what we term "BOS Strategic Overlays" - typically seven to ten broad directional overlays that help the BOS team filter out ideas that might not otherwise make the grade. It becomes a larger part of our litmus testing of ideas.
So far we have not felt constrained by these overlays, and in fact they sometimes assist to identify potential rish veins of non-customers, although sometimes the overlays are refined and revised as we push the organisational boundaries.
Have others come across this issue? Any other comments?

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		3 Mario Castaneda, United States
	Blue Ocean Ideas That do not Fit an Organization Andrew, I like your model of "Strategic Overlays." In my case, I recently worked with a client in the defense industry where some Blue Ocean-generated ideas did not align with the core strengths and focus of the company. In this case, I advised the CEO to have his team analyze the market potential of these and fund and create an "entrepreneur center" within the organization, where some of these ideas could be pursued and eventually be sold as a Spin-off as a start-up if successful. Fortunately, as the Founder, he does have a strategic, start-up oriented mindset. As a result, one of these ideas has grown into a nice multi-million dollar business in a separate industry and others are being pursued. A side effect of this action is that he has been able to retain some of his best and brightest employees. Best Regards, Mario.

		1 Andrew Nelson CEO, Australia
	Business Matching Opportunities @Mario Castaneda: Mario - that's a great story! As an interesting aside, I've also had some discussions with clients about how some of their great ideas might be able to be sold to other businesses where they might be more appropriate and successful. This has created some business matching opportunities for my own business.

		1 C.L. Kappagomtula Professor, Malaysia
	Overlays for Blue Ocean Strategy Andrew's concern is somewhat unfounded, merely for the reason, that any BOS is subject to the condition of either entirely competition-free markets or at least ones with a relatively low percentage of competition for the product / service that the organization might be contemplating. Overlays come into play, when there is a threat perception by the organization through competition. In such cases, it is no longer in the zone of BOS, and it comes in Red Ocean band.

		1 Gerardo Arroyo Jimenez Consultant, Mexico
	Castaneda´s Participation @Mario Castaneda: That's a great idea in order to retain not only employees, but also you retain ideas that other competitors could get access to by getting access to competitive advantages generated by your own company.

		0 Darenda Downing, USA
	BOS Strategic Overlays Indeed I have to agree that using overlays, theoretically, may be counterproductive to developing BOS in the purest sense. But what good would it do an organization to identify a purely competitive-free market if they have no definitive capabilities to make a profitable impact in that market? It seems to me that overlays are useful in filtering strategies and as @Mario Castaneda: relates, in identifying new profitable business opportunities.

		3 Andrew Nelson CEO, Australia
	Competition Irrelevant to Overlays Just responding to Dr K and D Downing - as Darenda says, putting purely theoretical considerations aside, when working with teams we often find them generating ideas that may be great business ideas, but completely irrelevant to the business that is sponsoring the project. Some of these ideas may spark from the areas we are considering, but others will be completely lateral and unrelated to the tasks at hand. Someone in the Nintendo Wii team may have seen a great Blue Ocean Strategy opportunity to rethink the Yoga industry, but that doesn't mean that Nintendo is interested in pursuing that opportunity. In fact, usually the problem is that there are too many ideas to pursue, so the strategy overlays help the teams decide which of their best Blue Ocean Strategy ideas to pursue and which to postpone or abandon.

		1 C.L. Kappagomtula Professor, Malaysia
	Mere Idea Generation by itself is not a Sufficient Cause to Adopt BOS Allow me here to interlink the BOS with idea generation. Before any strategy is put to implementation, it is necessary, that a lot of ideas surface, even if not all are meant or desired for implementation. BOS precedes with evaluating the ideas by SWOT, filtering out a couple of them, from scores of generated ideas, by carrying out appraisals. These appraisals can be from the angles of marketing, finance, technical, economic and ecological. The ideas that come out favorably after these appraisals, are screened applying the organizational criteria - if any. The final winning idea that comes out of these elaborate processes is adopted for the BOS. If the organization applies all of these processes, then it becomes very evident, that there cannot be any scope in BOS, exposing itself for unwanted, irrelevant overlays.

		2 Andrew Nelson CEO, Australia
	Strategic Filters by Any Other Name Dr K, I think we are in agreement on process and concept but maybe disagree on terminology. As you say, appraising initial BOS ideas using your list of marketing, finance, technical, economic and ecological will weed out poor ideas. But, using finance as an example, the business must still make some decision on what level of ROI or capital injection it is capable of, and willing to accept. For me, this is an example of a "Filter or Strategic Overlay" that needs to be discussed early in the process, as it will weed out inappropriate ideas early and can save considerable resources. May I also ask, what falls into your category of "Organisational Criteria"?

		0 C.L. Kappagomtula Professor, Malaysia
	Organizational Criteria for BOS Strategy Andrew, thanks for initiating an interesting discussion on BOS. Pragmatic evaluation of ideas by SWOT, and in-depth evaluation of the filtered ones by various factors performance appraisals will filte...

		2 Andrew Nelson CEO, Australia
	Confused About Terminology Dr K, I am a little confused. All these evaluations you mention must have criteria set by the organisation, and as you say they have to be aligned to the organisational objectives. These are in my lan...

		1 TAUQEER AHMED MUGHAL Manager, Pakistan
	Blue Ocean Strategy Assumes no Boundaries Blue Ocean Strategy, on the other hand is based on the views that market boundaries and industry structure are not given and can be reconstructed by the actions and beliefs of industry players. E...

		0 C.L. Kappagomtula Professor, Malaysia
	Strategic Overlays in BOS The very definition of overlays in management jargon means, managing or trying to avoid the inefficiencies by harmonization process in the system. This can happen in BOS context, when there is no bala...

		2 Dato Dr. Mohd Norfaizin Bin Hj. Md Salleh AFA Director, Malaysia
	There is a Case for Filtering Blue Ocean Strategy Whilst applying Blue Ocean Strategy, more often than not organisations tend to get over excited for applying the so called "NEW" strategy and spend valuable resources in large quantities. At the end ...