Wednesday, March 14, 2012

Virtual Ocean Strategy – the way to reset strategies with a purpose driven “industry structure is irrelevant” mindset?

With our Virtual Ocean Strategy (VOS) receiving some great press within the blogosphere, some of our fellow strategy practitioners, have challenged us with a set of follow-up questions - the most notable one being - "how is it different from the popular approaches like Red Ocean and Blue Ocean Strategies?". Instead of answering them all individually, we decided to synthesize them in the form of three questions, to make it relevant for our larger audience -

  1. Why another approach now?

  2. How does it stack up against the other popular frameworks like Red Ocean (ROS) and Blue Ocean strategy (BOS) frameworks?

  3. In spite of having these great strategy frameworks, quite a few strategy efforts, still do not produce its intended outcome - Why?

1.Why another approach now?

While the popular Red Ocean Strategy (ROS) and the Blue Ocean Strategies (BOS) have widely been successful in the last decade+ years, we believe that they may not be well equipped, to handle the ever-changing business needs of the 21st century! This does not mean that these two approaches have not lost their former glory; rather, the best way to comprehend our hypothesis is that some of the foundational principles of ROS and BOS, may not be well equipped to handle the seismic shift happening within the social media/digital technology driven, global business environments of the 21st century.

In other words, the right way to frame this “Why another approach question” within the context of this seismic shift being – “what elements of ROS and BOS can be blended together, to form a hybrid approach (with some value-adds), that can, not only help companies to reset their strategies, but also, help them to stay relevant in the 21st century?”

First things first - let us start with some basics. Porter’s ROS is built with the mantra of beating the competition with a unique winning path, whereas, BOS is built with a mantra of entering the deep blue ocean markets, with a “competition is irrelevant” mindset. While there is time and place for each of these worldviews, we believe that none of these approaches, in its current form, are designed to handle the emerging "boundaryless industry structure" mindset of the 21st century. In other words, in the last 5-10 years, the traditional boundaries existing among industrial structures, have started to blur, as evident from some of the recent industry convergence moves by Fortune 500 companies (e.g. Starbucks entering CPG type Juice industry, Google entering travel/media/mobile handset industry, Apple/Intel entering media/paid TV industry etc). What do these strategic moves tell us? Companies have started to look beyond their traditional industry structures for growth opportunities with an “industry structure is irrelevant” mindset, and so, the need of the hour is an approach that helps companies to accomplish that mindset, in a comprehensive way, as outlined in the picture on the top of the page!

While VOS is designed with an "industry structure is irrelevant” mindset, in its essence and spirit, VOS is all about executing those strategies with a collaborative heartbeat. In other words, while competition within a boundaryless industry structure, might be irrelevant during the beginning days (i.e. especially when companies enter the virtual oceans with a first mover advantage), it will catch up sooner than later, as digital and social media technologies have started to shrink the world much smaller, by tearing down the artificial walls, existing among the industry structures, and so, “collaborative execution” is the name of the game in the 21st century!

The implication is that the trade boundaries across industry structures are all being redrawn, thus validating the need for a “strategy reset journey” with an “industry structure is irrelevant” mindset! VOS starts that reset journey, not only, by resetting the purpose statement (with its five parts of vision, mission, values, codes and BHAG with priorities), but also, by balancing them with a multi dimensional balancing process, in value, cost, velocity, growth and purpose dimensions, as opposed to the two dimensional value-cost trade-off in ROS and value-cost balancing in BOS. VOS is the only approach in the market place that is sourced from an “inside-out” energy source called PURPOSE SEED that is manifested in three forms simultaneously -

Simply put, VOS and its three frameworks are being sourced from the common PURPOSE seed, very much like, how GOD-HEAD in most faiths happen to manifest himself in three forms depending upon the dispensational context, and yet operate as one person. In other words, VOS, although manifests itself in three forms (leadership, strategy and innovation) within the various cultural contexts, it still operate as one integrated approach, when it comes to decision making- which is what makes VOS, a sustainable approach for the long haul.

2. How does it stack up against the popular ROS and BOS?

3. In spite of having great strategy frameworks, still some strategy efforts do not produce its intended outcome - Why?

The essence of strategy, according to Michael Porter, is choosing what not to do, and so, we have developed 5 “WHAT NOT TO DO’s” to answer this question. One might ask - why the “negative” approach? Well, most research suggests that unlearning is the foundational prerequisite of learning, and so, we have identified these 5 “what not’s”- to unlearn some of these decade old mindsets, before learning to use VOS, with an integrated/systemic mindset and to stay relevant in the 21st century!

  • What Not #1 -> Do not reset with a single dimensional strategy mindset, as opposed to an integrated systemic approach, in the three dimensions of leadership, strategy and innovation, as addressed by our TPF framework within VOS.

  • What Not #2-> Do not reset strategy without resetting the purpose seed, as addressed by our Purpose driven seedal chain/scientific energy management principle driven Portfolio Thread view based strategic planning framework within VOS.

  • What Not #3-> Do not go after an existing market, as opposed to going after the virtual ocean market and/or experience pools, which do not exist today with a motivational momentum themes creating experience moments or movements-> as addressed by our Experience Pool Portfolio (EPP) framework and our Purpose Innovation framework within VOS.

  • What Not To Do #4->Do not mix up SCA vs. competency vs. capability within organic and inorganic growth strategies, but follow a portfolio approach, in avoiding this “capabilities mix-up trap” – as addressed by our Capability Pool Portfolio (CPP) Framework within VOS.
    o To put things within its context - SCA vs. Competency vs. capability is equivalent to Grandma’s hand trick of sautéing for the right duration with right temperature vs. Recipe vs. Ingredient.

  • What Not To Do #5-> Do not execute without a real time performance visibility -> partly addressed by our big data driven real time valuation/Corporate performance management framework within VOS.


Implementing a strategic plan, in itself is a big challenge for most organizations, leave alone resetting them all the way from the Purpose Seed, as strategy resets, invariably end up introducing lot more structural changes to the organizations, than we think. To manage those changes and to mitigate those execution risks that come along with it, we suggest companies to take a phased approach, and apply our VOS principles and frameworks with an integrated systemic mindset – as guided by our big data driven analytics/synthesis balanced, Corporate Performance Management (CPM) frameworks!

Please feel free to check out our Slide share version of our article for a better visual display as well.