I don’t usually write strongly negative reviews of books, because most of the time, when you encounter a bad book, it is usually obviously bad from page 1 on. Intelligent readers don’t need help figuring that out. Blue Ocean Strategy is a bad book, but it is not your usual bad book. It is a dangerous bad book because it takes some thinking to figure out why it is bad, despite its success, and despite the fact that its key metaphor of blue ocean vs. red ocean has made it into the business lexicon and titles of innovation projects. This means that harried workers and managers, even really smart ones, who digest this on a short plane ride, might very well be led down very dangerous paths by it. So here is the first ever skewering of a book on ribbonfarm. Call it a ritual sacrifice. If you already read the book and didn’t find any serious flaws, read on for a detox course. If you haven’t read it, I hope I am able to turn you off. If you still insist on buying it, please use the affiliate link on this page, so at least some good comes from it. A better use of your hard-earned money might be buying me a cappuccino when you are done reading the review. Or buying one of the alternate recommendations at the end.
Blue Ocean Strategy, by W. Chan Kim and Renee Mauborgne
Though I am late to market with my review, it is only now that the book (published in 2005) has seeped into companies to the point where it is influencing strategy, so I might still be in time to save some lives.
Here is a quick summary of the main message of the book: “do something really new.” That’s it. The message is that trite, and it takes the authors 216 pages to deliver it. Wait! You might argue. Doesn’t the book introduce a compelling metaphor and frame a valuable new concept? Isn’t the road map reasonable? Isn’t it at least useful for the collection of anecdotes it contains? No, no, no and no. And I’ll tell you why. Better still, I’ll write this review in the form of a 7 deadly sins list. I’ll tell you why, even if you follow the book’s road map and succeed, that does not validate the book. You succeeded in spite of the book, not because of it. Finally, I’ll point you to some better stuff to read. So here are the sins of the book, in order of increasing seriousness.
Sin #1: The Blue Ocean Squatter Metaphor
The basic metaphor of the book is this: uncontested market space (which of course you can easily get to using the “roadmap” and “tools” prescribed) is like a blue ocean, where other sharks aren’t swimming around competing with you for prey. Regular markets are red oceans, where the water is bloodied by combat with other sharks. The metaphor is incoherent and confusing. Among other things, blue ocean is a naval term to be contrasted with littoral, and if you are a normal person, the term probably conjures up an image of deep oceans, far away from land, not a bloody/non-bloody contrast. Even accepting their framing, the ocean might be blue because there’s no krill out there, as a colleague pointed out (a criticism that is set up in strawman form and peremptorily dismissed in the book), unless you are an oceanic white tip shark (aside: I’ve been watching the Discovery Channel “Shark Week”). But these are not the main problems with the metaphor.
It’s main problem is that it gets you nowhere, and actually needs more explanation than the abstract phrase uncontested market space or even just new market. A good conceptual metaphor should have a lot of implications that really enrich your thinking, highlight the pattern of key features in the domain, and get you farther than the raw abstractions or literal examples would. Hobbes Leviathan, for instance, is a great conceptual metaphor, because it conveys the subsuming organic nature of a complex society. The blue ocean metaphor says nothing more than leave the competition behind.
So what’s so bad about a bad metaphor? Well, it causes a squatting problem. Like somebody squatting on an Internet domain name. The idea that you should try to create and dominate uncontested market space is an obvious one, and every manager in the business world understands it. And yes, they could all use a really good metaphor to understand it better. Now unfortunately, there is an incumbent bad metaphor to displace. I suspect we’ll be using this metaphor for a while, and then throw out the baby (of focusing on uncontested market space) with the bath water of a metaphor that dampens and distracts rather than energizing thinking. I hope somebody comes up with a better metaphor and kicks this squatter off prime intellectual real estate.
Sin #2: Conceptual Emptiness
It is my practice, when reading a business book, to ask, “what would be left of this book if I took all the anecdotes out?” The answer is an assessment of the conceptual framework and model of the book. For this book, the answer is “nothing.” Worse, many of the anecdotes are rehashed, so you probably saw half of them before anyway (like Southwest).
Early in the book, the authors hint at a potentially powerful line of development, when they assert that the strategic move rather than the great company is to be the unit of analysis. I perked up and said, “Aha! Now we’re getting somewhere.” The idea that there are no permanently great companies has been around for a while (for instance, in Clockspeed as pointed out by a comment on my review of Competing on Analytics). But what do we find?
“We studied more than one hundred fifty strategic moves made from 1880 to 2000 in more than thirty industries… we searched for convergence among the group that created blue oceans…we tried to discover the common factors leading to the creation of blue oceans and the key differences separating those winners from the mere survivors and the losers adrift in the red oceans” (page 11)
Hmm… alright, we’re with you so far, though you’d better watch out for the Lincoln-Kennedy-assassination common factors effect. So what did you find?
“The creators of blue oceans, surprisingly, didn’t use the competition as their benchmark. Instead they followed a different strategic logic that we call value innovation. We call it value innovation because instead of focusing on beating the competition, you focus on making the competition irrelevant by creating a leap in value for buyers and your company.” (page 12)
Oh my God! How did we all fail to realize this? This is almost as brilliant as the harried bureaucrat in an R. K. Laxman cartoon in the Times of India decades ago, who is saying to his ministerial boss from behind a huge pile of paper, “Minister, I’ve completed a thorough study of the grave flood situation in Kerala. It shows that the flood situation in Kerala is grave.” It gets worse:
“Value innovation is a new way of thinking about and executing strategy that results in the creation of a blue ocean and a break from the competition.”
That’s it right there. They claim to have the secret sauce, and even give it a name. Hard work, inspired visions, blood and sweat, luck and uncertainty not needed. Follow the cookbook and you’ll get there. There is more gobbledygook that I won’t bother to quote.
The conceptual framework really is that trite. There appears to be more, but as I’ll explain in a minute, the more substantial stuff actually came from elsewhere (from sources like Clayton Christenson and Malcolm Gladwell). If somebody uses the phrase value innovation at me, I will throw a stapler at him/her.
Sin #3: Fooled by Anecdotal Randomness
If the authors couldn’t invent a good theory, maybe they at least did their multiple regressions right? Nope. Think about the hard problem they’ve set themselves: analyzing dramatic (and successful) strategic moves that turned companies around. You’d think that sudden, discontinuous changes in the trajectories of high inertia entities like companies would merit more respectful treatment. You don’t want to pretend you can predict, retrospectively explain, or produce earthquakes when perhaps the best you can do is identify some sort of coarse pattern, like the power law that Gutenberg and Richter found.
The problem with analyzing a set of 150 short-sharp-shock type events is that there are a huge number of variables, and you are almost certain to find commonality patterns (among successes and failures) and discriminating factors (between successes and failures) if you look hard enough at any large enough subset of variables. They do that all the time in the stock market. Tired though the complaint is, people still don’t seem to get it, even sophisticated Minitab users. Correlation ain’t causality.
Given this, we need a whole lot more explanation than we get. Did they think about whether their variables were the right ones? Did they account for randomness and path dependence effects? Did they come up with an explanation and necessity/sufficiency arguments? Sorry, go elsewhere for those.
On second thoughts, don’t bother. Their conclusions about the pattern they found aren’t interesting enough to need explanation: reconstruct market boundaries; focus on the big picture, not the numbers; reach beyond existing demand; overcome key organizational hurdles; get the strategic sequence right.
The only one that is not 120% obvious to most managers I’ve known is the last one, and that’s obvious to about 80%.
Anecdotes are among the most powerful weapons of the business writers. They provide easy wins and easily packaged value. That makes it all the more important that they are analyzed thoughtfully and tastefully. At least hindsight ought to be 20/20.
Sin #4: The Vaguely Plausible Roadmap and Proof Case
Yes, the book does provide a “road map” and a bunch of visualization “tools.” By themselves, the tools are neither brilliant nor particularly bad. You and I could invent similar diagramming techniques. Chances are, since you and I are honest enough to not create pointless fluff, where possible, we’d avoid inventing new “techniques” unless faced with a clear inadequacy in current tools and terminology.
But no, we are subjected to the torture of chapter after chapter of new “tools” and useless conceptual clutter (since, per Sin #2, there are no real concepts in the book). We have, among other profundities, the “Eliminate-Reduce-Raise-Create” grid and the “Strategy Canvas” and the “Six Paths Framework.” Call me Stuart Smalley and give me my daily affirmations please. Excellent for retrospective analysis and grabbing credit. Not much help if you are actually sitting over coffee, nursing a splitting headache from having thought for hours, with reams of crumpled paper and acres of scrawled white boards, about a tricky business situation.
And is there any humility and acknowledgment that other techniques might work as well or (gasp!) better, or that hard creative work can’t be bottled up? No, we are informed that: “Chapter 2 introduces the analytical tools and frameworks that are essential for creating and capturing blue oceans” (emphasis mine). Clearly, the players behind the 150 moves from 1880 to 2000 that they studied just got incredibly lucky, since they lacked these “essential” tools.
What about their proof cases, like the minor leap made by Yellowtail wine (a fairly trivial innovation that the authors glibly classify with major revolutions like the Model T Ford or Southwest Airlines). Here we see confirmation bias and bad experimental design at its worst. It would take too long (and too much work, given their caginess about details) to point out the problems with the way they claim success for their methods. But here’s the honest experiment. Give a bunch of equally creative teams the same clear directive (say, “find us some new billion-dollar nascent growth options where there is no competition”), and send them off on a 2-day retreat, letting them pick their own tools and methods. You’d find, I suspect that the team using the Blue Ocean methods would do no better than the average team using any reasonable method. Quite possibly (see Sin #6), it will do worse. Which would tell you that it is the creativity and chemistry of the team, and the ideas that are already floating around, that matter. Not the diagramming techniques they choose to use. Of course, doing the honest experiment is close to impossible, which makes their theory unfalsifiable. For an honest look that gives credit where credit is due, and honestly admits what cannot be bottled up, take a look at the narratives and analyses in Katzenbach’s The Wisdom of Teams.
Sin #5: Not Giving Credit Where Due
The normal practice in business books is to cite other authors and books inline, except for academic references. The authors do that liberally — to call out books they think get it wrong (these include “the company is great” premise books like In Search of Excellence and Built to Last). But when it comes to giving credit where credit is due, we get inconspicuous endnote references.
Clayton Christenson’s idea of disruptive innovation, which the authors glibly repurpose and repackage (many of the examples in the book are far better explained by The Innovator’s Dilemma than by Blue Oceans), is not explicitly mentioned or discussed at all (it probably deserves a whole chapter in a book like this). I kept searching for a mention, since the ideas were obviously borrowed from Christenson. Finally I gave up and looked in the bibliography, where I did find it. I never found the place in the text where it was cited. That’s buried for you. In fact, if you take away the stuff explained by disruption, and take the authors at their word (page 13) that they are talking about something other than “technology innovation” and “market pioneering,” you are left with no examples that map to “blue oceans.” Much of what remains is in fact minor differentiation that could rapidly be copied and therefore belongs in the Red Ocean.
Malcolm Gladwell, likewise, is an obscure endnote. At least Gladwell gets indirect credit, since the authors decided to coin the term “tipping point leadership” (thank God for small graces; we aren’t subjected to “Tiger Shark Leadership.”)
If you haven’t read many other business books, you could be forgiven for thinking the authors are geniuses. They invent so many new terms for old ones, and minor tweaks of old definitions, you can easily get awed.
Sin #6: Promoting a False Sense of Security
We’re getting to the last two, most grievous sins. If you read the book, use its tools, its “six paths” and walk its road map, you might very well succeed, sing its praises and recommend it. In that case, congratulations. Luck and your own natural abilities to work with any non-random framework won out.
The problem is that the book might very well give you a false sense of security, and seriously derail you. You’d scuttle your effort and, thanks to survivorship bias, not live to tell your tale.
The book might actually delude you into thinking you are on track dealing with a phenomenally hard problem. The hardest business problem in existence in fact: reinventing the business model of your company. You might well convince yourself that it takes just a couple of weeks worth of drawing “strategy canvas” diagrams. I hope you are smarter than that.
This is serious. An honest business writer acknowledges the risks of the market, the complexity of business models, the true nature of the hard work required, and the limitations of any set of tools. In fact, this sin might well be considered an ethical/moral sin as opposed to sloppy thinking or intellectual sinning. As a colleague who shares my opinion of this book pointed out, it is fundamentally disrespectful to the hard work and dedication of people working diligently to change companies, to reduce their labors to trite retrofitted “strategy canvas” diagrams.
Sin #7: Ignoring the Real Problem
Here is the real problem. How do you reinvent a business? How do you come up with that truly great new idea, that next big thing that will return your company to growth and away from brutal competition? How do you create the passion around great ideas, tempered by a pragmatic acceptance of market uncertainties? How do you create the courage it takes to face them?
Blue Oceans has no answers. The one tiny glimpse of the idea that creativity and courage might be required is reduced to a shoddy discussion of the third of their “three characteristics of a good strategy” – focus, divergence and compelling tag-line. The first two are trite. The last is where the meat is: what they think is just effective advertising is actually the high concept of a clear and elegant value proposition. You don’t just come up with any old idea and look for a “compelling tag-line.” Only truly great ideas will actually admit a powerful “high concept” description. I’ll point out a more modest and more effective book that helps you get there, in a bit.
Unfortunately, there are no complete answers. These questions are as deep as the deepest questions about life, and it is simply dishonest to pretend you know the answer. At best you have some techniques that improve part of the process, reduce some of the uncertainty.
Ultimately, the problem Blue Oceans attempts, and spectacularly fails to address, is the problem of creativity itself. They are not to be blamed for failing. They ARE to be blamed for pretending they know the answer.
What to Buy Instead
- Try Katzenbach’s The Wisdom of Teams to see some real stories of looking for uncontested market space.
- Try Christenson’s The Innovator’s Dilemma to understand at least one class of such ideas
- Try Daniel Pink’s A Whole New Mind: Why Right-Brainers Will Rule the Future to understand the true creative thought and work that needs to go into powerful new ideas. You’ll see the vast amount of depth behind what Blue Oceans dismisses as “compelling tag-line” and the lumps into the “create” bucket of its “Eliminate-Reduce-Raise-Create” framework.
- And finally, try Paul Feyerabend’s Against Method to understand the intricacies of trying to explain revolutionary change with retrospective models.