Make it Better Project for Ent 601

Week 8 Response to the “Blue Ocean Strategy” for Ent 601

The “Blue Ocean” strategy is a six-step process. The authors break down the following six steps.

1. Reconstruct Market Boundaries
2. Focus on the Big Picture, Not the Numbers
3. Reach Beyond Existing Demand
4. Get the Strategic Sequence Right
5. Overcome Key Organizational Hurdles
6. Build Execution and Strategy

Each chapter breaks down ways of analyzing where a company’s strategy falls within each step. In the extended edition, the last section describes how to avoid the “Red Ocean.” A proper “Blue Ocean” strategy transcends traditional competition and the idea that to innovate; there must be a technological advance.

The third “Red Ocean Trap” describes “bleeding edge technologies.” It is interesting how the authors refer to new technologies in that manner instead of cutting edge technologies. It is almost as though they have a disdain for the phrase. The reason for the words might be perhaps because he is fighting the perception that technological innovation is the only innovation when, in fact, without value innovation, technological innovation would not be made useful for societal change.

“For technology to be adopted extensively, someone has to channel it from the inventor to the market. (Kinni)” According to Kinni, technology needs to be value innovated for the product or service to have an impact on markets.

A similar view on the same subject is that a product needs to be in the minds of customers. “A new product can fail on the market because it does not create real value and therefore cannot find customers. (Hensberger)”

Technological advances can be unknown if just presented on their own. It is when they offer some sort of value to the consumer and hence profit to a business, then new technology will be known to others. Leadership is an element that is also required. Without the proper strategy, even the best innovation will not become valuable.

Another point the authors emphasized is that innovation does not necessarily mean that a milestone development occurred. It is an increase in value that leads to a more profitable business.

I thoroughly enjoyed the “Blue Ocean Strategy.” I have to admit, as I took in it all in, I had to review the various steps and recall the analytical tools used at each stage. Looking at the author’s website, there are additional online courses available at low cost. In addition, there are publications which discuss specific organizations and their use of the “Blue Ocean Strategy.” I encourage others to look them up!

Kim, C. and Mauborgne, R. (2015), “Blue Ocean Strategy,” Harvard University Business Press, ISBN 978-1-62527-449-6

Kinni, T (2016), Why Innovation isn’t Enough, https://sloanreview.mit.edu/article/why-innovation-isnt-enough/, MIT Sloan Management Review, Retrieved on 2/27/20

Hensberger, A. (2016), 4 Reasons Why Innovations Fail, https://www.lead-innovation.com/english-blog/why-innovations-fail, LEAD Innovation Blog, Retrieved on 2/27/20

https://www.blueoceanstrategy.com/teaching-materials/, Retrieved on 2/27/2020

WEEK 7 RESPONSE FOR THE BLUE OCEAN STRATEGY

People are essential to any organization’s strategy.  The “Blue Ocean Strategy” lays out the groundwork for motivating people to execute the plan.  Even the best planned strategies can be derailed by people within the organization.  They may not understand the need for the changes or the they may not be in their personal best interest.  The authors of the “Blue Ocean Strategy” call their principle “Fair Process” which considers  the concerns and thoughts of employees in the process.

Proper execution requires “engagement, explanation, and clarity of expectations.”  Encouraging the engagement of the employees gains the buy-in of the people that are going to execute new strategy.  Today I spoke to the Director of Innovation for a fortune 500 company.  We discussed the importance of feedback from field level employees in order to gain insight as to ideas to develop that customers will value.  By engaging employees and gaining their agreement,  people will be more motivated to fully try to make the new strategy successful.

The second step is explain the need for the new strategy.  Organizational workers may not have all the information needed to understand the rationale behind a need for change.  Some might think that upper management is simply trying to get the most out of them.  When in reality the company is under enormous competitive pressure.   Without a new strategy, their job might be in jeopardy.

The final step is clarity of expectations.  All must be fully aligned with the plan so as to not deviate.  The final vision of the company needs to be understood by all so the entire organization can work in the same direction.

The value and profit proposition support the people proposition.  Value is what the customer receive considering price.  Profit is what the company receives considering cost.  There are many people that are involved along the way.  They may include customers, employees, and vendors.  The key to successful execution is aligning all three according to the authors of the “Blue Ocean Strategy.”

I do believe that people are a company’s most important asset.  They can make or break the best planned strategies.  Proper leadership from management along with the simple philosophy to treat your people like people make the difference.

The last section of the book discussion renewing the “Blue Ocean Strategy.”  Continuing to be innovative is every successful business’s mission.

Kim, C. And Mauborgne, R., (2015), Blue Ocean Strategy, Harvard Business School Publishing, ISBN  9781-62527-449-6

Ent 601 Week 6 Response

Week 6 Blog Response

Change in any organization requires leadership. When one is trying to implement change that will produce a positive outcome for customers, owners, and ultimately the employees of an organization, there can be resistance. The authors list four reasons that enacting change will be challenging. “Cognitive, limited resources, motivation, and politics” can prevent your new strategy from being fully implemented. Include the possibility of limited resources, and your plan will fail. It takes a strong leader to move beyond these challenges. The authors of “Blue Ocean Strategy” call it “Tipping Point Leadership.”

There are many aspects to “Tipping Point Leadership.” Because many in an organization may not be motivated to change, the reason for the change may need to stare them directly in the face. Because some within a company fail to see the long term plan in their role, they may not see the threats. Ultimately they could lose their job if the competition is on the heels of the industry leader who employs them.

Limited resources are another issue that could prevent the success of the strategy. The authors discussed how to overcome this problem earlier in the book. Consideration of unnecessary activities will help reallocate resources. Are there tasks or processes that are not necessary? Stopping these activities could allow for human resources or financial capital to be reassigned to areas that will move your new strategy forward.

Enlisting someone who can be a positive influencer among employees may make a difference in motivation, according to the authors. They also can let senior management know who is resisting change so that they can take appropriate action.

They also mention that the spotlight should be on everyone. The New York Police Department is an example in this chapter. Precinct leaders each had their new crime numbers highlighted at weekly meetings when the City of New York was enacting strategic changes in policy. Having their crime numbers out in front of everyone proved how well or not so well, they were implementing the strategy. I never thought of it this way, but that may be the reason employees in a sales organization can usually see each other’s numbers.

The authors warn against following conventional wisdom and catering to the majority of employees. Strategy implementation requires paying attention to those that have “disproportionate influence.” These are usually people in an organization that does not have a lot to gain from strategy implementation. A good leader will bring them to the realization that they are an integral part of the strategy and need to implement their part for the greater good of the company.

Mauborgne, R. And Kim, C., (2015), Blue Ocean Strategy, Harvard Business Review Press, Boston, MA, ISBN 978-1-62527-449-6

Future Scan Project for Ent 601

The Future of the Agriculture Industry and How Drone Technology Can Support It

The world’s population continues to grow. As such, there is an increase in demand for food. Those involved in the agriculture industry are looking for more efficient ways to produce the maximum yield. Additionally, the values of society are continually changing. Consumers are demanding to know where their food came from. The reasons vary from safety concerns to the quality of the product. The world is also moving toward a globalized economy. These three factors impact the need for innovation in the agriculture sector. I will discuss how some future trends in the industry which are a response to these market changes compared to a technology that is also new in the last ten years, drone imagery.

One concept that is becoming increasingly important in the agricultural industry is traceability. The demand for a traceable product is in response to the consumer becoming more health and safety-conscious. Quality and safety are essential to many people. We often hear about crops being affected by bacteria. Being able to pinpoint the location the product originated helps to persuade consumers that the industry has control of the crisis. The agricultural sector is becoming less fragmenting every day due to globalization. However, right now, it is still largely fragmented, and organizations and individuals within the supply chain have to answer to their customers. Knowing where a product originated can be challenging when growers, processors, distributors, and retails are all separate operations.

Processes are essential in maintaining a traceable supply chain. Technology has allowed for the ease of being able to trace products along the supply chain. Not all producers have caught up to this trend, but one day we might be able to scan a QR code and trace the chain our food followed from farm to end-user.

Drone imagery businesses can take advantage of this trend. Since damage from bacteria or pests is one of the top reasons for the desire to trace food sources, drone operators can contribute to the future of agriculture. Detecting when and where an infestation or infection has occurred can drastically reduce the possibility of unsafe food moving along the food chain.

Large fields can now be monitored through satellite imagery. As the agricultural industry becomes more vertically integrated, farms are more extensive than they used to be. Satellites can cover large areas in a short time. However, the frequency of the scans is not as often as would be required to decide to treat the crops. The resolution is not as good as in a ground scan. In addition to those obstacles, cloud cover can prevent a satellite from gaining imagery at all. The future of satellite imagery in agriculture uses nano-satellites that visit a particular coordinate with increased frequency. This technology exists now but not frequently used.

When asked what technology will be the best source of crop imagery in the future, industry experts say the answer could be “all of the above” (Hest, 2014). This statement makes the point that there is still a place for ground drone survey businesses. Farmers still require flexibility and frequency that satellite imagery cannot provide at this point.

There is much research into the use of microbes in the soil of crops. Usually, microbes and bacteria are bad for the growth of the plant. However, Using microbes to release nitrogen in the ground causes healthier plants to grow faster. This is just one example. Advances in DNA sequencing and machine learning have helped the process of analyzing microbes and identifying those that are best suited to target key crop stressors. For example, specific beneficial microbes can allow a cotton plant to withstand drought conditions. Test from all around the world and the DNA sequence is turned into 1s and 0s so the machine learning can take over the analysis (Hammerich, 2018). Microbes can be manipulated in an infinite amount of ways to benefit the crop.

Drone imagery businesses can support this technology. It will be essential to continue to monitor the crop to confirm that the microbe is performing its intended function.

The agricultural industry will continue to respond to consumer demands and the desire for more profitable operations. Society will benefit from the innovations made as a result. Ground-based unmanned aerial systems (UAS) will have a place to support these new technologies. It will be necessary for the operators of such systems to sell the value of working together in a relationship that will help the other technology in a way that makes each more valuable.

https://www.economist.com/node/21698612/ec-cookie-message/0, Retrieved on 2/10/2020

Hammerick, T., Future of Agriculture Podcast, (2020), FOA 189: Farmers Solve Their Own Problems Through Open Source Technology

Bottemiller, H. (2013), Putting Food Safety at Consumers Fingertips, https://www.foodsafetynews.com/2013/05/putting-food-traceability-at-consumers-fingertips/, Retrieved on 2/12/2020

Opara, L. (2002), Traceability in agriculture and food supply chain: A review of basic concepts, technological implications, and future prospects, https://www.semanticscholar.org/paper/Traceability-in-agriculture-and-food-supply-chain%3A-Opara/4f632b6ec4bd1ebdc53a0fcf295b1cd3800ed11e, Retrieved on 2/12/2020

Hest, D, (2014), Satellite Imagery Boom for Farming, https://www.farmprogress.com/precision-farming/satellite-imagery-boom-farming, Retrieved on 2/15/2020

Sozzi, M, Marinello, F., Pezzuolo, A., Sartori, L., (2014), Benchmark of Satellites Image Services for Precision Agricultural Use, https://www.researchgate.net/publication/326417596_Benchmark_of_Satellites_Image_Services_for_Precision_Agricultural_use, Retrieved on 2/15/2020

Lightbody, K., (2017), How Tiny Satellites are Changing the Way We Do Business, https://www.fastcompany.com/40425808/how-tiny-satellites-are-changing-the-way-we-do-business

Opara, L., Traceability in Agriculture and Food Chain Supply: A Review of Basic Concepts, Technological Implications, and Future Prospects, (2012), Food, Agriculture, and Environment, Volume 1, WFL Publisher, https://www.semanticscholar.org/paper/Traceability-in-agriculture-and-food-supply-chain%3A-Opara/4f632b6ec4bd1ebdc53a0fcf295b1cd3800ed11e, Retrieved on 2/9/2020

Ent 601 Week 5 Response to the Blue Ocean Strategy

The authors of the Blue Ocean Strategy (2015) discuss how pricing and cost factor into creating a “Blue Ocean.”  The authors suggest looking at pricing in a way that is completely different from what I am used to, but also makes perfect sense.  In many businesses, pricing is determined by “cost-plus” gross margins.  Take your cost and add how much you would like to make on your product or service.  It is very simple.  However, this formula may not lead to incremental growth in sales.  It is very inside-out thinking and the “Blue Ocean Strategy” encourages “outside-in” thinking.  “Outside-In” thinking takes a product and views in the lens of the market.  When creating a strategy, managers need to consider whether or not customers will purchase based on price compared to value.  Taking cost out of the equation and thinking solely in terms of sales of the product.  

Profit is still a factor.  Money needs to be made for the owners or shareholders.  The managers need to look at total costs and find a way to make the cost correct to achieve the expected profit margin.  This also is counter-intuitive to me.  I have always thought that the most successful companies do not make compromises.  Although this is true in many cases, the authors list several examples of how getting to the correct cost through process innovation or other means can create an open market.  One of the more interesting examples is the Ford Model T.  There were nine different models before the Model T.  I never really thought about other models before the “T.”  This is because history mostly discusses the Model T.  What made this model more successful and famous than the others is that is was the first model widely sold and available to the mass public.  Not everybody could afford a Model T, but most people could not afford the prior models.  To do this, Ford had to mass-produce the product.  Each could not be hand-built and only one color would be available which was black.  By compromising and in turn eliminating personally built vehicles, Ford was able to sell to a market that did not consider themselves potential car customers.  Those that got around by horse and buggy began to consider motorized vehicles.

Changes of the magnitude that many innovative companies go through are not accepted by all right away.  It may need to be sold to some people.  It is important to have employees, partners, and the general public on board with the changes first.  Any misconceptions about the before the rollout of the new way of doing things can result in possible derailment of the concept.  The authors discuss in general terms how to gain acceptance of the three broad groups, but I do not believe there is any simple way to do it.  There will always be some amount of risk.

“Blue Ocean Strategy” is changing the way I think about the topic of innovation strategy.  Innovation does not happen by accident.  A strategy needs to be implemented for any innovation to be fruitful in the market.  Implementation takes leadership.  With the two combined, a company can be unstoppable.

Kim, C. & Mauborgne, R. (2015), Blue Ocean Strategy, Harvard Business Press, 

ISBN 978-1-62527

Bloomenthal, A. (2019), Value Based Pricing, Investopedia, https://www.investopedia.com/terms/v/valuebasedpricing.asp, Retrieved on 2/8/2020

Dryburgh, A. (2017), Pricing Innovative Products, https://www.forbes.com/sites/alastairdryburgh/2017/09/16/pricing-innovative-products/#2c92e9981672, Retrieved on 2/8/2020

Past Forward Activating the Henry Ford Archive of Innovation, (2013), https://www.thehenryford.org/explore/blog/before-the-model-t-henry-fords-letter-cars, Retrieved on 2/8/2020

Ent 601 Innovation on a Napkin

Ent 601 Week 4 Reflection

In this week’s reading, the authors began looking at how to create a “Blue Ocean” strategy.  Chapter four is titled, “Focus on the Big Picture, Not the Numbers.”  This is good advice for anyone looking to scale their business.  The numbers do not always happen right away.  If the process is proven, then it should be followed.  

Comparisons among large corporations are primarily used, but the concepts can be applied to a small business.  In fact the principles used are simpler in a smaller organization.  Although a small organization might not have access to quality market data like a fortune 500 company, decisions can usually be made with less individuals involved.  Large businesses tend toward innovation strategy and small businesses lean toward risk taking strategies (Marom, Lussier, and Sonfield).  According to the study, it is because smaller businesses will aspire to grow and take more risks.  Once the business is large, the managers will rely more on innovation strategy to continue to grow as more risky decisions are not necessary.

The “Blue Ocean Strategy” requires the manager to go through four steps of strategy visualization.  “Visual awakening, visual exploration, visual strategy fair, and visual communication” all lead to create a new strategy.  It forces the manager to look how they are operating from all angles.  It takes an “outside-in” approach by looking at everything from how your competitors operate to analyzing customer desires.  Analysis are made by looking at the strategy before the awakening and after.

Companies that operate in the “Blue Ocean” are truly innovative leaders when the embrace the concept of “reaching beyond existing demand.”  This requires the manager to look at ways to reach a new audience in a new way.  It is a completely new concept to me to think of non customers as potential customers.  Finding the right way to reach this customer base is what will create a margin with a high profit margin potential. 

A method exists for creating a market that makes “your competition irrelevant.”  It is not a simple process, but through determination can be accomplished.  Detailed analysis of day to day operations are required to strategize for the future.  In addition, a humble attitude is necessary to truly affect change in a company.

References:

Marom, S., Lussier, R., Sonfield, M. (2019), Entrepreneurial Strategy:  The relationship between firm size and levels of innovation and risk in small business, Journal of Small Business Strategy

Kim, C., Mauborgne, R. (2015), Blue Ocean Strategy, Harvard Business Press Review, ISBN 978-1-62527-449-6