Entrepreneurial Strategy

Blue Ocean Strategy is one of those books that has resonated with business leaders around the world and has gone on to sell over four million copies, having been printed in 44 languages. Its authors, W. Chan Kim and Renee Mauborgne (Professors at the University of Michigan), introduced the Blue Ocean concept in a Harvard Business Review (HBR) article in 2009.

Strategy at that time had followed a very structured process. They called this a “structuralist” approach to developing strategy. It is a view that says the outcomes and indeed success of the strategic initiatives are based on the ability of the organisation to successfully exploit environmental circumstances rather than anything particularly game-changing that the business itself undertakes that might shift the industry.

In the book, they talk about the success of the Griffith (Riverina, New South Wales) based wine company, Casella Wines, in shifting the American wine market. Casella’s created a sweeter, easy-drinking wine that had mass-market appeal. In turn, this moved the perception of a wine drinker away from the swirl and sniff world of fine wine enjoyed by those elite that have training and expertise in wine appreciation. In the article, the basic premise was that the ideas and actions of individual players could shape the industries in which they operated. They called this approach “reconstructionist.”

Indeed, since this article was written only a few short years ago, we have seen the emergence of some of the biggest companies in the world who have dramatically reshaped and created industries and industry sectors to go on to top the S&P 500. The products and platforms produced by leading companies such as Apple, Google and Amazon either did not exist in their current form when this article was written or were in their infancy and emerging, being predominately championed by a small market share of early adopters. It seems extraordinary given their saturation in our lifestyle today, but the first iPhone was only introduced to the market in 2007.

It is critical that we provide the tools and internal structures to effectively harness entrepreneurial creativity in a functioning, profitable and coherent business model that can support and nurture the innate desire to create whilst restraining the endless experimentation that so heavily impacts cash flow and growth.