Leaders in the social, cultural and creative sector sometimes seem somewhat reluctant to apply often quite well known business concepts to their work. The suspicion is that business is about making money and can have little to do with creative or social ambitions. There are a number of reasons for this but if talked through many strategies not only become relevant but essential in developing organisational strategy.
One I am increasingly finding helpful is The Blue Ocean.
I’ve noticed the leaders I work with are always competing in highly competitive fields. There are literally thousands of creative agencies or theatre companies or social enterprises out and they face increasing competition from an ever-expanding field of other organisations which, on the face of it, do exactly what they do.
Yet when you probe deeper there is almost always something specific or unique about the way these organisations work which marks them apart.
However this difference is often not articulated or identified as clearly as it might or (worse) expressed in jargon for the benefit of funders rather than being true and authentic to their organisation. They may say we deliver arts-based education programmes for young people. Great but so do many others. We are a highly creative design agency, well aren’t they all?
It’s at this point I introduce the concept of the Red Ocean vs Blue Ocean.
This concept was first devised by W.Chan Kim and Renee Mauborgne book in one of the most significant business strategy books ever produced “Blue Ocean Strategy – How to Create Uncontested Market Space and Make the Competition Irrelevant”
The basic premise is that any business or organisation is either operating in the highly competitive Red Ocean where there are lots of competitors and price the key determinant or the Blue Ocean where value creation is the prime factor for success. In the Red Ocean, customers have lots of choice and choose to pay the lowest price, in the Blue Ocean the price is set by the organisation because only they have whet they offer.
This little table gives a quick overview of the differences articulated in the book.
So which Ocean do you want to operate in?
When I’m working with the leader I often ask what the difference is between their organisation and any other. This is a crucial point in the relationship because they begin to think hard and more clearly about what is unique about what they do. From there we refine their thinking into a statement which becomes their new Mission Statement.
This clearer articulation of their value shifts them from the Red Ocean to the Blue Ocean. Only they can deliver their unique programmes of activity, only they can deliver impact and value for their clients in the way they do. Their HOW is specific to them.
In this way competition becomes irrelevant. This enables you to think differently about funders, investors, customers and most importantly to STOP UNDERVALUING WHAT THEY DO.
If you are the only organisation doing what you do, you become special. Your value increases and customers begin to seek you out rather than the other way round.
It’s a very powerful process and an essential first step in building financial sustainability.
For more on this buy the book or look here: