EntreLeadership - #231: Renée Mauborgne—Move Beyond Competing

Episode Date: November 6, 2017

World-renowned professor and best-selling author Renée Mauborgne has spent the last decade proving to businesses around the world that they have the power to shape their industry—in spite of the competition. In fact, making decisions based on what your competitors are doing achieves little more than turning you into them. Instead, Renée insists the best way to fuel growth is to create a new market—with conditions favorable to you—rather than allowing the current market conditions to dictate your decisions. Scary? Yes. Worth the risk? Absolutely. Join us to learn how you can shift into uncontested market space and win—big time. entreleadership.com/podcast 7-Day Plan to Triple Your Productivity Revenue Calculator   Learn more about your ad choices. Visit megaphone.fm/adchoices

helping business leaders grow themselves, their team, and their profits. This is Andre Leadership. Now, here's your host, Ken Coleman. From the Music City, this is the broadcast of leaders, by leaders, for leaders. Thank you so much for joining the conversation. Our feature conversation this episode is with Renee Maubour. Now, Renee is the co-author of a new book entitled Blue Ocean Shift Beyond Competing, proven steps to inspire confidence and seize new growth.

And then Coach John Falcons will stop by the studio as we answer some of your questions. And of course, you know that the Entree Leadership Team and InfusionSoft are going to bring you two free resources to help you grow yourself, your team, and your profits. Really excited about the conversation with Renee. Many of you know the book Blue Ocean Strategy. It was an international bestseller. And so the authors are back, this time Blue Ocean Shift. and many, many connections to Renee and this book. And Ryan Holliday, who's been a guest on the show, one of my favorite authors, he made the connection here.

So you're really going to enjoy this. This is important thinking stuff. I mean, this is, if you want to get your head in the right place to be able to lead, to be able to grow your company, then you need to understand this idea of shifting. So here is, without any further ado, my conversation with Renee Maubourne. Well, Renee, this is a real treat to have you on because the book Blue Ocean Strategy was such a game changer for me and so many others. And so much research went into that. And now here we go with the follow-up after many, many years over a decade, Blue Ocean Shift, beyond competing.

I thought that was such a compelling title there, proven steps to inspire confidence and seize new growth. So for those who are unfamiliar with Blue Ocean Strategy, I just do want you to give us a bit of context between the difference in the two books and now why Blue Ocean Shift. So Blue Ocean Strategy, our first book laid out the what, and Blue Ocean Shift lays out the how. So our first book raised the issue that we're all competing in existing markets,

what we think of as for us Red Ocean is a bloody competition because most industries today have excess supply, tight demand, shrinking profit margins. So we see that as a red ocean. But what we also notice is that the companies that were earning strong profit and growth were not competing in those existing industries. They were creating newer markets, these wide open blue ocean, we call them, where there was no competition, they had uncontested market space. So the first book really laid out the universe has not only the existing industry,

we focus on, but these new market spaces were all able to create these blue oceans. And once that book came out, we had organizations around the world coming to us very rapidly actually saying, oh my gosh, I can identify myself as in this red ocean and I need to get out. But the question is, how do I do it? How do I start the process? How do I get my team involved? They're wedded to the status quo. They don't know how to think differently.

Help me get there. And so that was the inspiration for the second book, the last 10 years, where we started studying organizations that were making this shift from red to blue, putting the ideas into practice to understand what worked, what didn't, and how organizations can transform themselves, from competing to creating. I love how you start the book with the idea of these fundamentals of market creating strategy. and anybody listening right now who owns a business or wants to start a business, the idea of market creating strategy. Boy, that can get you fired up. Give us a summary of what those fundamentals are. Okay, so well, most people look at market competing. Go ahead to head.

Market creating, there are various dimensions of what that mental mindset means. But, you know, let me take one of them. The first aspect is you don't take industries for granted. because if you hit your strategy to the tough competition of existing industries today, your future growth prospects are limited. So you have to realize that individual organizations and firms created those conditions and can shape them. And we see that every single day being played out in the world in newspapers or magazines or blogs today. So don't take industry's conditions for granted when your market creating realize you can shape those conditions.

The mindset of a Blue Ocean Strategist, that's Chapter 3. It's actually entitled The Mind of a Blue Ocean Strategist, but I think this is fantastic stuff. And before we get through the steps, we've got to get to the mindset, the proper mindset. So what does that mind of a Blue Ocean strategist look like? And how do you begin to make that transition if your mind is not there? So, you know, as I was just articulating, one key aspect of the mind of the Blue Ocean Strategist is they don't build their strategy based on industry conditions. They know that they can shape their industry as players prove every single day.

So those industry conditions are created by firms. They don't exist in nature. They're products of their mind and they sit out to shape them. They realize that. So they're not constrained by that. A second key dimension is they don't focus on benchmarking the competition and building advantages because the more you look to the competition as most firms do, the more you end up looking like the competition and you inadvertently turn yourself into a me-to.

The mind of the Blue Ocean strategist is in order to shape my industry, I shouldn't look within my industry. I need to look outside of my industry. And the process teaches you how to look outside of your industry in a meaningful way to get the ideas and how to shape it. Second dimension. So the third dimension of the Blue Ocean strategist, the mind of the strategist is that they're not looking to existing customers for insight. They realize the more they talk to existing

customers, what they're going to echo back is just give me more of what you're doing for less because customers aren't paid to solve their problems for you. That's what you go home with a paycheck for, right? And so what Blue Ocean strategists are always doing is they're looking to grow demand and they realize that real insight comes from talking to all the people who aren't the customers of your industry, the people who refuse it. And they're the first ones that are very easy to be able to tell you, these are the pain points in your industry that you don't see, but keeps me from coming. And these are also points of intimidation in your industry. You may not realize it, but you may be intimidating me. Your product may seem too technical. It may seem too

sophisticated for me. It may be located in a location that makes me feel like that's not someplace I should go. And they can start to reveal those insights. So the third thing they're looking at is they're always looking to all the non-customer. for insight on what they should do differently. And they realize that's all the new demand out there that they can unlock. They're not stuck with just dividing up existing customers. They can grow that. They can explode that multiple, multiple times, right?

And in our book, we give example after example of that. So, you know, in our book, we talk about a French multinational community, home appliances. Industry is really tough, lots of competition, lots of low-cost, impact. reports coming in and hypermarkets taking margins down to minimal levels. And the company set out to put the process in place. And as I did, they realized that the whole industry was competing under the assumption. One product they looked at was French fry makers.

That to make a French fries, you have to have frying and oil. So basic to the industry, no one thought to question it. And when they look to all the non-customers of the industry, what they started to realize was people said, well, you know what? You may assume that, but that creates lots of pain points for me. First of all, if I have to watch my weight, it's too many calories. It's unhealthy. I don't want to go to your industry. Second thing is, a lot of other people didn't have that issue.

They had the problem that oil is expensive. I don't know how to throw it away. After I make the fries, the friar is dangerous. It's hard to clean. My house is smelly. That allowed them to redefine the problem the industry looked at. And the solution was to create a French fry maker with no frying. And when they did, they grew demand by over 40% in the industry by pulling in all those non-customers who refuse the industry due to all these hidden pain points the industry just took for granted or actually didn't even recognize because they didn't think to challenge that frying could be made with anything less than a lot of oil.

So here's where non-customers. Yep. They even got Oprah tweeting about that. Boy, does it hurt when you get Oprah to tweet? No, it doesn't. Stock price lifted 5%. All right. Power is amazing. So I have a quick follow-up there. Yeah.

So I've got people listening right now, and they're hearing this, and they're small business owners. And I think there's a question that popped up, and it is, okay, I get that, but how do I best go about getting non-customers to give me the feedback that I need? You start talking to them, Ken. So we have two tools in the book, right? One is, and it would be very helpful for everybody, and one is called the buyer utility map. And what that does is it maps out for you the buyer's total experience. Typically, we think most organizations think from, you know,

what's my supply point experience, what I have to do to deliver. But this is from when I search for your product to when I dispose of your product, and you begin to look to everyone that doesn't go to your industry, people that maybe occasionally use it. And you ask them, why don't you use it more? And you go through each step. Is there something in searching for the product that's difficult? What's the pain point?

Is there something in using the product makes it difficult? Maybe you can't open the product, right? Think about setting up a computer. You got to rip it out of the box, figure out how to throw that box away, figure out what the wires are, go under the table to plug them in, hit your head while you're doing that. These are all pain points in the computer. industry, for example. But it goes through, there are compliments you need to make your product,

are there issues with maintenance of your product that's expensive or difficult, or even disposing of it, right? How do I get rid of it? Disposing of computers is a big issue because people don't really know how to clean their hard drive, right? And then there's a lot of issues of information there. So I think any one of your listeners, small or large, and all large companies started small, and our book has many small entrepreneurial companies as well that use the process to create these blue ocean. So size is not of issue, is to start by applying that buyer utility map, map out what the buyer's experience is, and then get in the field and start talking to. We give you the templates of who to talk to and the questions you ask around that to find out what are we doing

that we don't even see. The French fry maker, they didn't even see all those pain points that went with their industry. It's happening all the time. So that's what I would say to the small companies. Yeah, start talking, start listening. That is not complex. All right, so this leads us to the five steps in the book, and you've already touched on something. But I'm going to let you just walk us through these because I think this is so, so powerful. The five steps to making the blue ocean shift, step one, it's mind-blowing people.

You're not going to believe it. You're ready? Get started. So choosing the right place to start. That's the first chapter as you launch into that. How do we choose the right place? First, let me go back and getting started. You know, the one phenomenon that we often see is a lot of people spend a lot of time talking about the problem and worrying about the problem and very little time acting on the problem.

And then they wonder why the problem doesn't go away. And therefore, they think it's taking so long, it hasn't gone away that it becomes greater and greater in their mind. They think we can't. But the real issue is you've never dedicated time to it. So it can't go away. So first thing is start putting time to it. That's the first part about getting started. Second thing is, you know, if you have an audience of a small and medium-sized companies, they may only have one major product line. They may be a hairdresser salon, a small accounting firm.

I think there the essential question is you're starting with what your existing businesses. We're figuring out the starting point is, and we have a tool for that, is when you're a larger established corporation and you want to figure out which business or product of your multitude that you have. do you want to get started on that journey? Because you'd never want to rip up the whole organization and say, let's all shift from red to blue. That's too much change. So we talk about you need to earn the right to grow. So Ken, do you want to start with the idea that we're working off of a small company or do you want to talk about the large company?

What makes sense? Well, I like the idea of the small company because it gives everybody more context and the principles are still the same. So yeah, give us a scenario there. Yeah. So getting started. First is put time to it. Don't just worry about the problem and talk about the problem. Put time to get your team together. You select your existing major product line that you have, your business, your service, whatever that is.

That's number one. And the second thing is get your team together because your idea is not just to create a new strategy. You want to get organizations. You want to be able to execute that strategy. And when you are changing the existing order, you're trying to create a blue ocean. and you're going to start eliminating factors your industry competes on and creating new ones. If people aren't involved in that process and you start telling them that something they've competed on, we're going to eliminate because it doesn't add value. If they haven't seen that and experienced themselves, you're going to get pushback or people are going to stand on the sidelines and they're not going to start to execute that idea.

So you want to, if you have a small company and you have people, if you have that blessing of having somebody in marketing, you have someone in finance, get someone on the shop floor. You want to get from the different functions in your organization to be part of that team. The other thing you want to do is get different personalities. A lot of companies hate the complainer, right? But we found the complainer is really good because if there's anyone looking for what's wrong in your company, it's them. So you want to put them on the, that's important advice, right? It really is.

Every problem that we have is actually an opportunity in disguise. So you definitely want to get a complainer because they're going to be the first to vocalize it. So getting started would be just getting that team together. And that's what we would say. They're putting the time, getting your major business line, and then getting your team together, which we go into in detail. And it's very important to get that team dynamic correct. Yeah.

I want to ask you about a few more personalities. Just put you on the spot here. Because I love that idea of the complainer. You take something that is normally a negative and you turn it into a positive because this is such a key function. that you're talking about in making sure that you are truly scanning the field with every set of perspectives that you need. What are some other personalities, or, for lack of a better word, perspectives that are really valuable in constructing this Blue Ocean team?

I think a lot of people think right away you have to have a marketing expert. They really try to gear it towards people that are close to the market. But when we look at teams that are very effective, they often don't have those people because they know the market so well, they often have an issue in stepping back to challenge what they've been doing. And we found often someone in accounting who starts in the first step, shaking and thinking they don't know anything to contribute because they don't have any ideas. They actually are the ones that ask the questions that seem so naive in the beginning that actually start to reveal insights. So get the guy on the shop floor, the lady on the shop floor that you think

doesn't have, you know, your educational level, your perspective, they're quote unquote, not strategic, but actually they are. And they probably might be a customer of your industry too. So you want to look for people that have the ability to ask uneducated questions about your industry that challenges things so fundamental that people on the team or the established players on the team that know it so well might start to roll their eyes. But you want to pay attention to those people. Also, get somebody in the complaint department. If you have someone that answers the phone a lot and has to hear that slack, get them on the team. They're the ones that hear everything no one else wants to hear and have to paper over it. And they can start to reveal

a lot of insights. You want them on that team. So that would be some of the issues, but also really the functions. And a little bit of a larger company, you know, medium-sized company, what we've often seen is people say, hey, you know, every time we have an idea, it gets killed in the finance department because it's something new, we don't have ideas. But you're asking a finance person whose job is to sign off and be responsible

for financial performance on something they don't understand. And so people claim, well, they become bean counters. Well, yeah, that's your job. Right. But if you get them on the process with you, the people who are in charge of the money strings, and they are the ones that see and discover these pain points with you and they understand why the shift is necessary

and what the opportunities are that the industry is leaving off the table, you find that they go along very powerfully in that process. So I think that's what you're looking for, too, in a company to bring on board. So lots of different perspectives are critical in making that team, creating the ownership and making sure execution happens. Because every one of those people can go back and talk to themselves or others say, yeah, I heard that. I heard that too.

I did too. I saw it. And that is what starts to create that momentum for change and people discover for themselves the need as opposed to someone high on the hill telling them how the world needs to change. Folks, that is terrific perspective. Really, really good stuff there. Make sure you go back. We listen to that.

take some notes, that is extremely valuable. You know, I've said this before, and I'm not the first person to say it, but this is so important as we look at step two, even if you know where you want to go, if you don't know where you're at, like, just picture putting a map out on a desk and go, all right, that's the final destination, that's where we want to go. But if you don't know where you're at, you can't truly map a route. And that's what you really take on in step number two, getting, excuse me, understanding where you are now. Teach us on that. Yeah, so you want to, and I think you hit it on the head there.

You want to get clear on the current state of play. And what you have is most people aren't clear. They are so focused on reacting to the market every single day, looking to competition to get their ideas on what strategy is being a little bit more a premium product or a little lower cost, that they're not clear. They also work within their functions. They have very clear understanding of different silos of their offering, but not the entire picture. So you want to get everyone to understand what do we as an industry compete on and invest in?

What do buyers get? And what are the assumptions we're making? So, you know, we introduce a very simple tool, but very powerful. It's a one-page analytic. Any small company can apply. You can apply it to your family. You can apply it to your dating life for business. goodness sake, right? You're a red ocean data or a blue ocean data. And what you really want to do

is get people clear on what are the factors we compete on? And what you find is that interesting when you apply this tool, most people in industry are unclear on what they're really competing on. And the second is when they really start to talk, they have different definitions of what they mean by customer service. They have different definitions of things. So you find that's why a lot of organizations are working very hard, but they really don't stand for something. They're either a long laundry list of things because they're just a series of tactics or they're just a plain me too. So this allows you in one picture to see what our industry competes on and what do we offer buyers and what's our profile versus the competition. And what does that do? We never say,

tell your company you need to shift because no adult wants to be told what to do. You tell me, you know, it's your opinion. I discover it for myself. It's a fact. We need to do it. So you want it to be a fact. So you let them. You say, you know, I heard this idea of bluish and shift. Are we in a red?

Let's see if we're in a red. Maybe we don't need to shift. Maybe we don't need to change. Let them know there's that option, right? There's no foregoing conclusions. Let them draw that map. They're going to find on a Friday afternoon. It's not easy to figure out what they compete on.

If you don't know what you compete on, how can you get anywhere, right? How do we know where we're getting? And then they start to see that. Usually what happened. in many industries at our Red Ocean, they find out, of course, I mean, we looked at a major oil company, by the way, and they find out, no wonder why we're getting killed in the hypermarkets. We actually charge more and offer less when they drew that picture. Boy, was that a wake-up call, right?

Yes, yes. But you often find out that, you know, you're just a me-to. And they say, okay, but let me ask you, we showed that to our customers. Would they think that they should buy from us, or do you think they'd tell us that we need to lower our price because we're such a commodity and me too lower our price and if we show that to an investor an angel investor want to get money would they want to put money down and see our future or would they think that we're me too with not much growth prospects yeah maybe a me too and what do you think do you think we should consider and what's happening is i'm not giving the answers the tools

allowing the team and us to discover for ourselves what we know and what we don't know and when we discover for ourselves what we don't know, what do we do? We created a sense of humility and a sense of there's something that we can learn. There's an openness. And that's very important to making this shift. But more than that, it gets everyone on the same page. So suddenly, I have an organization that had 20 different opinions or 10 about how to tackle it. But now we're all aligned and we're speaking the same language and now we can start to build on everyone's collective knowledge and cooperation and moving forward. So it's really, really important that you get the baseline right and you get people to agree on the negative shift on their own. So that's what that second step

is about. And it's huge. And I'm not suggesting this, so don't get too upset, Renee, but if you were to rip that section of the book out and that's all you read, it would be worth the price because you just gave us a master class in vision casting. It's the difference from leaders declaring something versus asking questions about something and allowing people to make the conclusion on their own. If I ask somebody something versus declare it, so it's the difference between a declarative sentence

and an interrogative sentence. And it's beautiful and it's really powerful. And I, folks, I don't want to move on until you understand how important what Renee just told us is. It's really important. It's going to change the way you communicate. And I think it's how vision should always be casted

because it is a collective realization of the vision that you may already have, but everybody comes to it collectively. Really, really good stuff. Step three. You know, Ken, if I make one point, too, you know, when you tell people that let's see if we're in that red ocean and we need to shift.

Right. And they are the ones that instead of being 21, they're discovering it, you actually relax people. What people get very nervous of is a decision being imposed from the top that they don't understand. That's right. And they think it's going to ask them to question themselves. So what you want to do whenever there's change, there's fear.

And you want to relax that in people by letting them know there is no foregone conclusions. You know, what's see what needs or not needs to be done. So, yeah, that's what I would conclude. And last thing on that, because we're really passionate. We've seen the power of these tools. in organizations around the world as we work with them, the last power of that tool, I would say, is that when you have it in one picture,

and it's one line you're drawing versus the factors of competition, I encourage everyone to take a look at that strategy canvas, you know, in chapter one and see it because you are all looking at one page. You're all working off of something. You're not working off of ideas and words only. I have literally, like we have a map, you know, when you draw on Google Analytics,

turn left, right. We literally see it in front of our eyes, and that's very powerful. That's how you keep the alignment as you keep moving forward. Good stuff. All right, so step three, imagine where you could be. It's one of my favorite questions in the world. What could be? I just think it's so empowering and it's so exciting. Again, this is the step, so there's a couple chapters in there. I'm going to let you go where you think we need to go on imagining where we could be. Great. And Ken, interrupt me at any point if you want to ask a question. Oh, sure. So, you know, after people come out of getting clear on where they are and many industries will see that they're in this red ocean and their strategy is no different than anyone else,

they know they need to shift, but they're filled with fear still. They're wondering, are there really, am I capable to shift? Are we? And are there, okay, in those industries, there are blue ocean opportunities? But maybe is there, maybe not one in mine. I'm a hairdresser. I'm an accounting firm, what could there be? So the first step you want to do is start to imagine what could be. And this is where you want to uncover, and we briefly touched on this earlier, is the hidden pain points in the industry. What are they? And so to do that, what we introduce is a tool, again, that you can get your hands around and touch and feel and use called the buyer utility map. And what that does is it maps out the buyer's total experience. And you map that

with them. We give you a generic template, but you can modify that to your industry. It begins with how do I search for a product? How do I purchase it? How do I actually use it? Are there supplements I need? Is there maintenance? How do I dispose of the product? And it might be slightly different to every industry, but that's a basic template. And then you look at what are the levers of utility, which is the value you can deliver to customers, right? And you want to go through, we walk you through and you start asking like, Across this buyer experience cycle, what is the biggest block to simplicity for our users? You say, is it in search?

Is it hard to find our product? Is it in using our product? It's too complicated. I can't set this thing up. Is it that there are supplements I need that don't, I can't get easily? Are they too expensive? Is it I can't throw it out? What is it?

And then you go through the next one. And that's a, you know, ease of use. and then the next liturity lever, which could be risk reduction, or is it to, does it make people unproductive? So we have these six levers of utility. And when I'm doing that, you know, as in the French fry case, I can start to uncover pain points in my industry that I didn't know existed that were always there. So when, interestingly, Kimberly Clark applied the process in Brazil, for of all things toilet paper, right? So what can you do with white toilet paper for goodness sake?

It's a commodity of commodities, most people would think. Right. They found out that really there was huge blocks to utility they never saw them. And one was that in Brazil, the average person goes to hypermarkets to buy. They travel long distance in their buses to get to these hypermarkets on the outskirts of city. They have kids in tow, and they buy these hypermarkets sell toilet paper, and they want to save money in these big, big buses. folks and they can't get home with them.

They've got groceries falling out. They've got a kid crying. They can't hold the toilet paper, can't fit on the bus. Big disaster. And then they get home and they can't even fit it in their house, right? So they realized that the whole industry never thought about the issue of delivery and carrying of the toilet paper. So they came up with something called, started as just one hug, but compacto, which

eliminated all of that by keeping the side of the toilet paper, but creating a handle on the toilet paper packed, squeezing the toilet paper very thin, you just hug it and it pops out, which made it very, very easy to carry because it dramatically reduced the size of the toilet paper you've carried, though not the quantity, and easy to store. And they reset the whole industry. Now, why do I say this? Because when I start to uncover the pain points in the industry, right? I start to realize that we thought we were in a red ocean. We just saw that in the first step. We're not creating a blue, but I'm already beginning to imagine what could be because every one of those pain points are opportunities to unlock hidden value. So now I start to

get confidence that just in the way the industry is going, by just looking for hidden pain points, I see all these problems in the industry. So can I just give you? And I just give you. you one quick example. I was with a major media company number of years ago when Napster just started. They were so upset because the CD market was being hit, obviously, and they make CDs. And, you know, I took a CD out in front of them and I said, okay, so you think it's because it's free. I said, somebody opened that CD for me. It couldn't open the CD. It's so tightly wrapped with plastic. You can't open it easily. And then when you finally open it, there is. that sticker that they wrap tightly around with a very tough glue. It's not like a post-it

around the lick of it that you have to get off. And you can't get it off. If you're a woman, you're going to rip your nail. And then you finally had a frustration, just force it open. And then the plastic cracks on the outside of the thing. And I said, you know, you are worried about the competition and there's new players. It's true. I can't even open your product. So how many pain points are you imposing that you don't even realize that makes these new alternatives that much more attractive. That's what that second step of unlocking the hidden pain points does. It allows people to see how many things, even without changing, there are opportunities for us to change the playing field of strategy. That's a first step. And what am I doing there? I'm

building everyone's confidence that, wow, maybe if we took another step and started to really explore this, we'd see something new. Yeah. Now the second... I just, I'm stopping for a minute because that is so important for folks is to be able to see that. Because you mentioned all these little small boutique industries, it could blow your business up in a good way if you're that much of a differentiator from all the other pain points. It just takes all the complexity out of the strategy, doesn't it? It does, and it makes it visible because when you have a buyer utility map in front of you,

You literally have a six by six simple template. And you're literally going and you're again going into the market. Now, we often question people that I'll tell you what we really do is we never start with the market. We say, okay, you know your industry so well, right? You're experts. That's what you're paid for. So I'm going to give you this map and I want you to fill it and tell me all the pain points. And then people get nervous often.

Now, some really market companies that truly are close to the market, that truly are having ongoing conversations. stations where they're not selling, they're discussing, they can fill that map in and start to realize. But many companies start to scratch their head and they can't. And they say, you mean, wait a second, you're in this industry and you're competing in every day. You want to succeed, right? And you can't figure out where you're blocking utility from buyer's perspective. What that means is you think you're in touch for the market, but you're really just. just selling to the market and you really don't have an intimate understanding of customers and buyers that are out there. And that's very critical. And that's important. So, you know, you look at

today, you know, I fly first class in America. Let's say you do. You look at that first class. And then you go and look at some of the other players that are out there in American carriers. First class in an American carrier is going New York to California, five-hour flight is hardly different than economy, slightly larger sleep, maybe 30% more reclined, and you know, you get a sandwich. That's first class. And I think to myself, how can we be globally competitive if we don't realize what other airlines are doing, right? So I think a lot of organizations don't really or not as much in touch with their market as they think they are nor understand it. They've always approached it from a selling supply point of view.

And when they talk to the market, they're afraid to really ask what's wrong because they think, if I ask what your pain points are, that reveals we're not good enough. And they'll say, I don't need you anymore. But to the contrary, people are normally so excited that you care to find out what the problem is, that they want to tell you everything. And you have to be able there to take it in and realize those are your opportunities. you know, and so many companies, the question is, can you fill it in without going to the market? If you can, you're really close to your market.

If you can't, you really have lost touch. You're in a selling mode. You're not in a listening, exploring mode. Very important. That in itself. Yeah. So you were getting ready to go into, I think, discovering the ocean of non-customers. Thank you.

Yeah, Ken. So now I start to see pain points. And the real question is, if we unlock. that. How could we grow to man? We don't want to just fight for a share of the existing market, many of which are shrinking, right, as new industries are emerging. So what we want to then give the team an understanding is who are these non-customers out there, people that aren't customers that we could turn into customers. So you want to get the team to start mapping out. And again, we have a tool called the three tiers. It allows you to get really put structure on this

challenge as opposed to just random brainstorming around a table. And you start saying, okay, who occasionally uses our product to what we called tier one, but could use it a lot more? And why don't they? Why don't they use it more? And the second question is, you know, who thought about using our product but chose against it? Who refused it? They thought about it, meaning they're actually considering putting their money down so that

you're actually, you're psychologically much closer to their heart and wallet than you know, but in the end, they chose against it. So I chose to drive a car instead of flying. The fact that I considered flying, though, tells you I'm very close to entering your industry. You just have to know how to, what is the hurdle keeping me out, that hidden pain point? And if I can knock that over, I can make you to come right over into my industry, right? So that's the next tier. And you want to get people to start identifying that.

And then the third tier you want to start thinking about are people who could really benefit from the utility, the value your industry offers. But today don't even consider it because either it's priced too much for them or because the way it's delivered is either inaccessible. They can't reach it. Or maybe it's intimidating in the way it's positioned in the market. and it seems like it's more sophisticated shopper than them, even though they could get value from it. And so you want to start laying that out. And then what they start to see is this blue ocean is no longer this ambiguous concept out there. They start to be able to literally see it.

Oh my gosh, we thought we were in the red ocean. We were worried. We knew we needed to shift. We recognized that ourselves. But let's face it, we were all sweating. We didn't know if there's any opportunity. But wait a minute, there's all these pain points. If we're the first ones to knock those pain points over, there is a score right away.

There's low-hanging fruit, even if we don't go through the process we can do and start to move from red to blue. And the second thing is we can see that we can start pulling in all this new demand. Now what I'm doing is I'm building my team's confidence or seeing new possibilities. I'm making them move to the blue ocean in increments that inspire but don't intimidate. and I'm broadening what we call building their creative competence to succeed in that market. And, you know, to your point you made about the first step about getting clear, at any one step, you can tell the people, you know, if we don't get inside here, we can turn back. But what happens in each step is that that simple fact of knowing they can turn back makes people drop their fear.

And at any one step, even if you do turn back, what we have seen systematically is there is, there is a score right away anyway, whether I know how I can go to new customers that were never in my industry, or I overturn three pain points, and I say, let's just see what that does, and then we'll go systematically. There's always a point gained at each stage, whether you go the whole way or not. But that's imagining what it could be. Now I'm opening their breath to the people I can draw in and to the pain points I can overturn. Yeah, I'm glad you just mentioned dropping fear. I think that's such a great point. And if I can, I want to stay here for a minute because I think this is great for people that are listening in who go,

oh boy, oh boy, my leader needs to do this. And my leader is so got their head in the sand. My leader is so resistant to change the change that I believe could be and should be. This is a great tool, this book and the tools that you've been talking about that are within the book. This is great if you've got a healthy posture or respectful posture, a humble posture, to take this to leaders and help them see it. Because this isn't just leader to follower. This could be a little trickle up leadership to borrow a phrase from the 80s.

What do you think about that, Renee? 100%. And we see organizations and we've been studying organizations that do it where they all apply it to their unit. So when I would talk about this French multinational, it was the head of, this is a huge multinational. But it was the head of the cooking division that decided. that they were going to take on the process. Probably the whole organization might not have been on that page yet.

They had understandable concern. They had never shifted in a big way. So you can fly it from the small step. And what I would say, if I say what excites us is, in the book, we're not studying Steve Jobs. And we're not studying Mark Zuckerberg. We're studying ordinary organizations that got inspired by the idea to move to Blue oceans. We look at a national government. Can't get more bureaucratic than that with all the same

bureaucratic challenges, resistance, fear, resource hurdles. And what is exciting is we talk through all of this psychology in the book, the human psychology of how you build the team, where you're going to get pushed back for a series of questions because we work with so many organizations in doing this and as has people that have worked with us around the world. And we, tell you, how do you, if you get this pushback, this is how you address it. So, you know, to your point, I have a CEO that doesn't accept the need for change, just wants to write out their career, doesn't want to listen. You know, to that, I'd say, okay, that's good. So you just go to the C and say, you know, I learned this exciting thing. How about on a Friday afternoon?

I don't know if it's relevant for us, but, you know, we see industry after industry getting hit today, established players being taken down, rules of the game are shifted. It might be worthwhile. we look at it. Let's do it on a Friday afternoon. Let's get everyone together and have some fun. Let's draw that one tool. Let's just see the strategy canvas, whether this is even relevant to us, maybe not. Now the CEO, he's not trying to tell me something. Discovery, that's right. Other industries, they've had that problem. Okay, why not? Then they do it. C.O. is part of the process. Oh, wow, we couldn't agree on what we competed on. We don't know what we compete on. How do we know where we're going? We see where a me too. So the book really goes into this,

psychology of how you talk to a leader that doesn't want to change, but you feel the need. How do you initiate it in your own department? So we go through a diverse settings to show how you move that process forward. And you kind of move it forward at any step. You become the leader of yourself, of your unit, of what you do. Yes. That's so empowering. All right, I'm going to, because of time, I'm going to, and we'll tease it, because she can't cover the whole book. I mean, we could do this for an entire day. It's so rich. Step four is find how you get there.

She's going to walk you through reconstructing market boundaries systematically, and then developing alternative blue ocean opportunities. For the sake of time, I want to skip forward to step five, where the challenge is make your move. Let's go. Make it happen. And you cover in that step two chapters dedicated to chapter 12 is selecting your blue ocean move and conducting rapid market test

and then 13, chapter 13, is finalizing and launching your blotian move. I love that that's how you lay it out because you've made a selection here, and now we want you to conduct rapid market test before you finalize and actually launch the final move. I love that. I want to spend our time on the selecting and conducting rapid market test. Again, I think so many people overlook the value of this important step. After people have gone through developing their Blue Ocean alternatives in a robust way,

we have the selection process. And in that, in reality, it will say we talk about rapid market tests, but because you're developing these ideas in speaking and working with the market, in a sense, you're getting feedback at every step of the process. So rapid market test is just icing on the cake that you've been getting confirmation. But in selecting the move, we really recommend that we call the Blue Ocean Fair, where you're going to bring in outside guests, depending on the organization, how large it is. You're going to bring in the key players in the organization, people from a different slice, to hear the ideas. And people are usually putting forward three or four, up to six ideas usually, that they have developed in that developing alternatives.

You want to push people the boundaries of it. And you have a voting process. They have to sell their idea in less than three minutes to you. And they have to show how buyers receive a leap in value with the idea, how it removes all these pain points, but it also creates new value that weren't even in those pain points, right? And then how your business model will make money on it and your plans to roll it out. So that's what you're doing.

And you present that in three minutes and you have to depoliticize the process, you are bringing in people from the market to hear those ideas. customers, lost customers, non-customers of the industry, people from across the organization, because we're all buyers, and you're allowing them to vote on it. Now, in the end, top management makes that decision, whoever the leader is, who's got to put the money behind that. But if they go against what people say, and they can, usually it very rarely happens because of the way the process is conducted, they have to provide very strong rationale on why they go against it. But that builds in itself a form of testing right there in the way the selection process is done.

So that's a selecting. And then once I have that and I have a simple prototype, I am going to go out and start testing that with a select group of customers maybe, with lost customers and non-customers. I know in the case of Kimberly Clark when they created the compacto of the ocean of just one hugged toilet paper, they went out on the streets of Sao Paulo and they pulled people aside and they tested the idea with people and asked them what they thought and what they'd buy and they went to a remote location. So you want to test that idea before rolling it out. And then you want to start rolling it out. And even when you roll it out, what we recommend is you start small before you go big.

So you want to pick a few test markets where you roll it out. You want to stay off the radar screen. and you want to realize that usually when you create a new idea, you have it 80, 90% right, but 10% wrong. But that's fine. You know, there's little things you need to iron out. And that allows you in small, limited areas as you're rolling out to get that feedback. So it's easy to correct.

You don't demotivate the company. You see it as natural. Get it right and then roll out rapidly. And that's what we see a successful company is doing, you know, if I say it very fast. Yeah, it's so good, so much stuff here. And I got to tell you, I think this book, I know Blue Ocean Strategy was huge. I think this book is going to be monstrous because, again, research is the basis. And then you've got so many practical tools to help people begin to do this.

You've taken the mystery out of it. You've taken, I think, the fear out of it if people are willing to jump into this. So, folks, there's a reason why Renee's with us. I think this is a game changer for your business. Again, the book is Blue Ocean Shift Beyond Competing, Proven Steps to Inspire Confidence and Sees New Growth. I have not read a subtitle to you folks in a long time that is that inspiring. That ought to keep you up at night.

Go get it wherever books are sold. Renee, I know your time is extremely valuable, and I know you've got a lot going on, but we are better for it. We appreciate you. for hanging out. Thanks so much, Ken. Appreciate it too. Hey folks, if you want to learn more, go to blueoceanstrategy.com. You can get the book there, get some other great resources, blueocean strategy.com. Now, I want to talk to you about one of our most popular resources we have ever offered here on the broadcast, and that is

the triple your productivity tool. So many of you out there right now are listening in, and honestly, you feel like you're on the merry-go-round that has spun up. out of control. Somewhere along the line, the operator has fallen asleep, knock the control to the absolute maximum speed, and it's going out of control, and it's the music, it's the horse, you're looking at a mirror, you're about ready to throw up, you're so crazy. We get it. And part of the reason why you listen to this broadcast is because you want to grow, you want to get better. And this idea of being the rat in the wheel and just hanging on for your life, it's exhausting. you're not going to be able to do it.

So you need to get better at productivity. It's not about making the merry-go-round or the wheel go faster. It's about being more productive. So it feels like you're very on purpose. So it's actually entitled the seven-day plan to triple your productivity. And we've offered this before, as I said, you can download the chart, and it's got every 30 minutes of your day, starting at 8 a.m. to 6 p.m., charted out. This just gives you an example of how you can use it.

So we want you to download the chart that is in this tool that has every 30 minutes from 8 a.m. to 6 p.m. charted out. And we want you to show us where in your week you are committed to strategy development. That's just one prompt. So we want you to take a picture of it and email it to Eric the producer. You can do that. Podcast at entreleadership.com. Now, here's how you get the tool. Text the word triple to 33444.

That's 333-444. just text triple, or if you'd rather go get the link in the show notes at entreleadership.com, click on podcast and go to this episode. And InfusionSoft. Oh my goodness, they're helping you out this episode as well. How many of you are familiar with the term churn, as in business churn? Now, I'm familiar with the word churn. Now, Eric, the producer and will the engineer have no idea what I'm about to say?

Butter churn. They don't know what a butter churn is, but my grandmother had a butter churn. in her kitchen. And, oh my goodness, the churn, the business churn, right? And so what we're talking about here to help you out is qualified leads versus nurtured leads, not just churning through leads. You want to know the qualified leads versus nurtured leads. This is a game changer. So when you're talking about qualified leads, nurtured leads, there's some opportunity costs. And so InfusionSoft has a calculator to help you calculate this. It takes five minutes or less. It's called the missed opportunity calculator.

This is a great mirror for you and your business. If you'd like to get it, go to infusionsoft.com slash calculate revenue. That's infusionsoft.com slash calculate revenue. Hey folks, welcome, hanging out here with Coach John Falcons in our new Entree Leadership Studio. Good day have you in our new studio. Thanks for having me.

Fun stuff. We got a couple of questions from podcast listeners. And as you are listening in, if you have a question that you feel like you need the coach's answer podcast at entreleadership.com, just email us and we will answer your question. This one comes from Clifford, and he asked, how many excused absences are just too much? He's got a team of about 21, so a very small environment. So I'm getting the sense that maybe people are noticing, hey, where's Fred?

Yeah. So there really, and you know this, Ken, there really is no magic number. like this this is too many. What's too many is a pattern of not showing up to work. So as soon as we've established like this person has got this pattern and they can't correct it, then we've got to do something about it. And to me, you know, that's kind of a function of two things. It's purely how many times it happens and then the time span that it happens over, right?

Like over the course of 10 years, if somebody's absent three times, we don't have an issue. If over the course of a month, we've got somebody who goes AWOL three times. we're having conversations about it. And then we're going to continue, just like anything else, to move in on that and correct it and coach them through that and get it to a better place, or we're going to have to do something about it. Yeah, good stuff there. And the next question comes from Jackson. He says, how do I encourage the leadership in our company to have more of a sense of urgency and discourage them from over-analyzing every decision? Well, just kind of how the question is asked, I'm assuming that you're in the middle of the organization somewhere,

and so that immediately brings up the whole leading from the middle, how do you lead up, all those things. And really, the key to this is becoming so indispensable in your role that you gain an influence, that you get people's ear, and they want to listen to what you have to say, because what you're responsible for is going so well, then you are, you know, they're sounding you out for for your opinion. Things like, I don't know, get Bob in here. We can't make this decision without Bob. You know, we need to get their opinion. Let's loop them in on this. When that kind of thing starts to happen, you've gained influence. People want to know what you think. And then you have their ear. And then you can start to drive the change that you're looking for. Let me recommend a book.

How to lead when you're not in charge by Clay Scroggins is right on this subject. And so I know that's not an easy answer, but it's not an easy situation to lead up and to get a other people that are above you to have a higher sense of urgency. But like I said, just become so indispensable, they're listening to you. Pick up the tips in that book and then start to move things over time. Thanks for the questions, folks. Really appreciate it. And hey, reminder, if you want to get your question in for Coach John Falcons, very simple, just email us podcast at entreleadership.com. That's podcast at ontraeleadership.com. Coach, thanks for hanging out. We'll see you again real soon.

Well, folks, that is going to do it. But before we leave you, I want to say on behalf of Eric the producer, our engineers, Will Rutter and Jim Bab, and the entire Entree leadership team, thank you so much for listening. We'll talk with you again very soon.