Applying Intelligence…to the Iconic Blue Ocean Strategy
Winning in the 21st century
One of the biggest mistakes business leaders make is sticking to competing within the confines of their existing industry, and trying to acquire customers from that existing competition. This is not a growth strategy by any means and in the 21st century, it’s a sure way to be left behind. Creating new demand, seeking uncontested market space, and making the competition irrelevant is how winning is achieved in the digital age. This is what the iconic Blue Ocean Strategy is about — winning! Competing in overcrowded industries, in the bloody red oceans is counterintuitive and counterproductive. Furthermore, the real transcending opportunities of our time, are the ones that can drive innovation and exceptional value creation. Therefore, in a hyper-competitive world, applied intelligence will be essential to competing successfully.
Blue Ocean Strategy is evidence-based, requiring research and analysis in identifying real demand trends. Therefore, sailing to find a blue ocean without proper intelligence-navigation will leave the enterprise lost at sea. Douglas Blackwell believes that the Blue Ocean Strategy can be improved or optimized through the supportive utility of data science — artificial intelligence (AI) and machine learning (ML).
Post 21st-century, business leaders had been able to develop expertise and niche skillsets within their respective specializations. However, they now face challenges as innovation rapidly evolves and increasingly becomes more demanding. So, the charismatic and trailblazing business leaders who were once long-time successful specialists are now confronted with a new technology reality, one where value-added tasks can be done at the stroke of a keyboard. Machines do it faster, precisely, and at minuscule fractions of the cost. Accordingly, the realization of data science’s effectiveness and value towards decisioning on factual information against intuition has become more evident than ever.
Therefore, for future business success, it is imperative to utilize intelligence-based technologies’ extraordinary enterprise worth and apply it to the right value-advancing tasks. So, with its ability to deliver tremendous value, AI can span across many domains, driving value through specialized algorithmic solutions, customized for the specific enterprise.
In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid.
— W. Chan Kim and Renee Mauborgne, the creators of Blue Ocean
Therefore, Douglas Blackwell’s proprietary applied intelligence demand-side- application acts as an ultra-effective supportive utility when applying the Blue Ocean Strategy. The applied intelligence process is a computational, quantitative, and qualitative one based on the premise that what you don’t know can often produce more value than what you already know. Therefore, engaging scientifically, in processes of discovery is highly logical in creating new value through newly acquired knowledge. So, applied intelligence couples well with blue ocean because both are about finding new information, and insight that can create meaningful competitive advantages. This knowledge is then value optimized through a disciplined process of industrial engineering and relentless iteration.
Although it is a defined terminology, “Blue Ocean Strategy” is nothing new in the history of business and industry. Looking back 100+ years, advancing innovations have always driven new industries, new markets, and knowledge has underwritten change. According to W. Chan Kim and Renee Mauborgne, if history is any predictor of the future, many companies will have significant capacity to create new industries and re-create existing ones. However, in the new hyper-globalized economy, the landscape has changed, and the game has risen to become more complex and sophisticated. Therefore, the effective utility of applied intelligence in creating value becomes an indispensable tool for the winning enterprise of the future.
Therefore, as it was in the past, the successful companies of the future will be the blue ocean executing ones. However, in the 21st century, they must recognize the benefits of applying intelligence for maximizing financial performance, and sustainable growth.
A study of business launches in 108 companies found that 86% of those new ventures were line extensions — incremental improvements to existing industry offerings — and a mere 14% were aimed at creating new markets or industries. While line extensions did account for 62% of the total revenues, they delivered only 39% of the total profits. By contrast, the 14% invested in creating new markets and industries delivered 38% of total revenues and a startling 61% of total profits.
So, the blue ocean strategy is highly effective but if coupled purposefully with applied intelligence, its potential is even greater in creating extraordinary added value for the enterprise.
The core value proposition for combining applied intelligence with the blue ocean strategy is to apply intelligence-based applications and processes that can create meaningful competitive advantages. The second objective is to augment human intelligence through the utility of intelligent technologies’ extraordinary decisioning worth and apply it to the right value-advancing tasks and processes.
Holistically then, the combined Blue Ocean & applied intelligence approach tells us that Strategy is paramount, and often the deciding factor in success. Nevertheless, a strategy without data science — intelligence-based applications can lead to business irrelevance and eventual demise. So, applied intelligence focuses on calculative decisions amidst ambiguity, and uses industrial engineering, underpinned by data science, to form highly useful strategy decisioning foundations.
Therefore, those business leaders of the future must also lead the future. A more complex and transformational future with changing realities, which is driven by profound economic, political, social, and technological change; calling for new 21st-century leadership. The old world, old white guy network, dominating the universe type of leadership or systemic environment is not fit to lead the future. Leadership must look like the future. With increasing computing power and information everywhere, competition will just get more intense, we need only the best-of-the-best at the helm. From diverse backgrounds, representative of the real globalized world. The old “captains of industry” is an archaic, top-down, authoritarian style, one-dimensional leadership that can’t align with the new realities of a fast-moving, diverse, and dynamic world. New leadership must be representative of the new world realities, with a focus on practicality and the usefulness of ideas as primary— combining applied intelligence with emotional intelligence to maximize future growth in a transforming world.
Hence, applied intelligence inputs vision, strategy, and performance, into data science and is underpinned by technology utilization to produce winning blue ocean-based outputs. It’s a highly practical application that builds big picture views to understand the landscape and confirm the POV. It utilizes AI and ML for opportunity spotting — new demand trends and identifies risks to present the most efficient, and optimal business execution strategies, necessary for winning. Therefore, as Einstein once said: we can’t solve our problems in the same dimension it was created in. Accordingly, in this new complex technology-driven universe, a new level of dimension is required to solve problems, and applied intelligence is built for this higher dimension.
