Strategic plan has you seeing red? Try blue.

When most of us think about how to get an edge, we look around at our competition. We strategize about how to outperform our peers and raise more funds from the same donor pool.

Blue Ocean Strategy authors, Chan Kim and Renée Mauborgne would argue that approach is exactly why you’ll fail.

Instead, they ask you to imagine a market universe composed of two sorts of oceans: red oceans and blue oceans. Red represents all the industries in existence today or our current market space. Blue oceans denote all the industries not in existence.

The red ocean or existing market space gets crowded as more compete for a greater share of existing demand. Cutthroat competition turns the ocean red. Blue oceans, in contrast, consist of untapped market space where there is opportunity for sustainable growth and where competition becomes irrelevant.

Ringling versus Cirque:

The premise of Blue Ocean Strategy is aptly described by the authors through the exploration of Cirque du Soleil, one of Canada’s largest cultural exports. In less than 20 years, Cirque has achieved revenues that took Ringling Bros. and Barnum & Bailey—the global champions of the circus industry—more than 100 years to attain. What makes its success remarkable is its achievement in a declining industry. Cirque has succeeded by creating a new, uncontested market space that has made the competition and declining circus market irrelevant. They have appealed to a whole new group of customers: adults and corporate clients rather than children.

While you may feel like you run a three-ring circus that happens to have a 501c3 status, you’re not alone. Kim and Mauborgne encourage you to quit competing with so many peers, and instead, create your own uncontested market space.

A nonprofit planning perspective of Blue Ocean Strategy®

We asked Heather Gowdy, coauthor of The Nonprofit Business Plan: A Leader’s Guide to Creating a Successful Business Model (2012), to discuss the merits of Blue Ocean Strategy with us in light of her unique perspective on business planning.

CausePlanet: Heather, thank you for serving as our guest author for this interview. As a member of the La Piana Consulting team and coauthor of The Nonprofit Business Plan, you bring a unique and welcome nonprofit perspective that’s especially relevant to this business book and to building a successful business model. What do you appreciate most about Kim and Mauborgne’s Blue Ocean Strategy®?

Heather Gowdy: First and foremost, I love the emphasis on stepping back and taking the time to truly think strategically about your market, your customers and your noncustomers. So often organizations get trapped in the same grueling competitive cycles, searching for ways to incrementally adjust what they do to better meet the needs of clients, customers, individual donors or institutional funders. There is real value in thinking “out of the box” and looking for blue ocean strategies that might better enable you to advance your mission–strategies that may not be at all obvious now, but will lead to greater impact and sustainability in the long term.

In what color ocean does your current plan have you swimming? What appeals to you most about the Blue Ocean Strategy®? In my next post, watch for more interview excerpts with Heather and why you should be seeing blue instead of red.

See also:

Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant

The Nonprofit Business Plan: The Leader’s Guide to Creating a Successful Business Model

Which comes first: the partnership or the plan?

Image credit: Cirque du Soleil

7 responses to “Strategic plan has you seeing red? Try blue.”

  1. Natasha says:

    I truly believe this is the best advice any business/nonprofit could ever get. Stop worrying about what everyone else is doing and focus on how you can build a distinctive, unique, memorable, purple-cow brand that people are excited to interact with. Doing the same as everyone else is not being competitive, it’s being boring. Loved this!

  2. The truth is that you must always be aware of what your competition is doing. That’s good business. However, no one is going to build loyal constituents, increase awareness and win awards by being a follower or being reactive.

  3. This is a great approach to thinking about fundraising, too. If you could see yourself in the blue ocean of endless possibilities verses the red ocean of limitations and overextended resources, what would you accomplish? Love the two oceans!

  4. Hanna Cooper says:

    Focusing on opportunity vs. scarcity always lead to more…. don’t keep your head in the sand about what’s around you but focusing on your unique offer will draw others to you naturally!

  5. Thanks for the concise overview of a term/concept that I have heard in passing several times at recent conferences. I look forward to future posts on the topic and will hope to see some strategies to incite blue ocean thinking as well as case examples.

  6. Emily Davis says:

    The visual component of this is probably a piece that will resonate the most with folks. Great idea!

  7. Denise says:

    Thanks, Michael. We’ll definitely continue to share insights from Blue Ocean Strategy. In the meantime, visit http://www.blueoceanstrategy.com. They have incredible visuals and terminology contained in the book.

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