- Hi, everyone. I'm excited to get started with episode 18 of The Cerebrations Podcast, and I appreciate those who are dialing in to watch or listen to that episode.

- We'll talk about Blue Ocean Strategy today. This year is the 20th anniversary since the first article on this topic came out in the Harvard Business Review. I've been fascinated by that framework ever since I met Professor Chan Kim, one of the two authors of the "Blue Ocean Strategy" book.

- I took an elective class with him at NSEAD and at later point of my career when I was working at Rosetta Stone, our CEO invited folks from the Blue Ocean Institute to do an in-person workshop for top executives. I've been following the evolution of the train work and it's been my desire for a long time to have a deeper dive with an expert on this topic, so I can do my bit in demystifying this framework.

- I've invited for the task Dr. Zee Munir, a senior blue ocean strategist with a proven track record of creating blue oceans of uncontested growth in both consulting and executive roles. Zee has worked on a variety of high-profile blue ocean initiatives around the world, including at the national level for Malaysia. Zee is also the Executive Director of the nonprofit, Blue Ocean Student Entrepreneurs Corporation, where she manages the largest pitch competition in the world for high school students with participation from 146 countries.

- I look forward to my conversation with Zee today.

- Ladies and gentlemen, allow me to invite Dr. Zee Munir to the virtual stage today.

- Hi, Zee. Welcome to the "Cerebrations Podcast". How are you today?

- Hi, thank you for having me. Very well, thank you.

- It's an absolute pleasure to host you on this episode. Blue Ocean Strategy is one of my favorite topics, and actually, if I can confess here to everyone, the Blue Ocean Strategy topic was one of the original ones that I was considering when I was initially planning how to get started with this podcast more than 18 months ago. So, I'm really glad to have found a great expert on that topic in you. And thank you very much for accepting the invitation.

- Sure.

- Before we dive into the Blue Ocean Strategy topic, I just wanted to do the usual housekeeping announcements. Everyone who watches this podcast episodes or is listening to it can go to cerebrations.info to learn more about you and also find episodes that I've recorded with other guests on many other exciting topics on business leadership, management, and coaching. I have a CTA here at the bottom of the screen, so again, the website is cerebrations.info. Now, I'll ask you to define the actual Blue Ocean Strategy in just a little bit. But before we do that, just to warm up a little bit, can you please tell us a little bit about your blue ocean journey? How did you get introduced to that strategy and how did you get involved in it and what's your involvement been so far?

- Sure. Well, I'll share a little secret with you as well. Blue Ocean Strategy is my favorite topic as well. Not just yours. Yeah. So, getting involved with Blue Ocean Strategy, this happened when I was in my PhD program. It was in management science and engineering. Innovation was sort of a new topic at that time, but my professor really was pushing me hard to move into that and I was just doing a lot of background research on all these different methodologies related to innovation and wasn't really getting something that would stick with me. And then, I read this HBR article, the Value Innovation Blue Ocean Strategy article, and I thought, okay, this is it.

- Mm-hmm.

- The book was not published at that time, but I found where the professors were ordered the book, read the book. And so, that's how it started. Of course, then I started communicating with the professors. I got invited to INSEAD to work as a researcher into them and so on. And so, yeah, that's how it started. But ever since, it has been Blue Ocean Strategy, whether it is research or consulting or training or helping others understand it, that's all, yeah, my career has really revolved around or evolved around Blue Ocean Strategy.

- Great. Great. Thank you. I appreciate that. And it's interesting you mentioned that blue ocean has been around your life for such a long time in many different ways.

- Yeah.

- And I also agree that in a way, this framework, a lot of people think about it only as a business framework, but it could be applied to your life as well. I-

- Absolutely.

- Yeah, I remember one of the first times I saw Professor Chan Kim, one of the authors of the book, he used the example of how you can apply Blue Ocean Strategy to build your own personal brand or even in dating in that context.

- Yeah. That's right.

- So, it's a great framework, but just for the sake of making sure that everyone is on the same page, let's start a little bit with the basics, and especially considering that not everyone that's watching this or listening to this is necessarily a strategist by training. The key audience here is sales and marketing execs. Some of them maybe covered it in very brief ways in school or may have read the book, but not everyone may have the full foundational background into it. And I have no illusion that we can cover all of this here, but just to get a little bit of the basic facts around it. And especially around the time when the book came out, there was a healthy debate even at INSEAD when I was there. Whether blue ocean is indeed a strategic framework or is it just a marketing tool? So, what's your opinion about that? I asked a few questions here, but in general,

- Yeah. Yeah.

- how would you define the framework and what in your mind are the main elements of that?

- So, first and foremost, Blue Ocean Strategy is about a different way of thinking of how you think about your business, how you think about growth, and so on. I do not think it is just a marketing framework. I think of it as a complete strategic framework specifically because it is not just about the value proposition that you create, it is about people proposition, it is about the profit proposition for the business as well. But let me step back and define for your audience what Blue Ocean Strategy is and how can they think about it? So, normally, whatever business you may be in, generally, there is a tendency to look at your competitors and always try to see what they're doing, how you can do better than them. So, whatever industry you are in, you would define the industry, who's the target market, who are the competitors, what are the norms and the expectations in the industry? And then, you try to do better than the competitors. When you are in that frame of mind, we say that you are in the red ocean, because all these competitors are like sharks and they are all going after those same set of customers or the same target market. And so, blue ocean is the space where there are no competitors. So, it means it's like outside of that industry. If you can define an industry, it is red ocean. Blue ocean has to be that calm space where there are no competitors, right?

- Mm-hmm.

- So, it is about finding a way of how do you move away from competition rather than doing better than the competitors. How can you make the competition irrelevant?

- Mm-hmm.

- So, in a sense, you would not start with what are the customers of the industry? You are going to think about who are the non-customers of the industry? Why are they outside of your industry? What can you change so that you can go into the blue ocean? So, Blue Ocean Strategy then not just tells you first of all, to look outside of your industry, to grow it, to make it bigger, but also then gives you a set of tools, frameworks, the whole strategic framework of how you are going to do that.

- Mm-hmm.

- It's not going to be some like random innovation. It has to be a systematic process. So, Blue Ocean Strategy in that sense, provides you not just this thinking that you have to start looking outside of the conventional boundaries of competition, but also then gives you the whole framework of how you're going to do that. And then, I think you have followed the Blue Ocean Shift as well. It also gives you the whole process of how you're going to step by step, how you're going to go into that other space. So, in my opinion, it is sort of much broader than the marketing framework, because it's not that you already have like an offering and you're creating awareness about it, you're positioning it in the market or so. It is about, first of all, identifying and creating that uncontested market space where there was no market and you're going to create it. And how are you going to create it, that's what Blue Ocean Strategy shows you how to do that.

- I see. Okay. And a lot of the things that you mentioned in the last couple of minutes are already a segue into my next question, which is basically, when is the best time, when is the best situation to apply Blue Ocean Strategy? And if I hear you correctly, it's more or less at any point of time, like this should be your framework of thinking as a company and as a individual business leader. But do you want to comment a little bit more on that? I think a lot of people think about it mostly when they're either trying to get into a new space or they have something new to release and they are, okay, now we're going to apply blue ocean.

- Yeah.

- But you know, what is your take on this?

- So, the basic thinking behind Blue Ocean Strategy is that your actions can actually change your environment. I don't know if you know about that approach where you have the environment and it determines what your strategy is going to be and how you're going to strive in that, and so on. Blue Ocean Strategy tells you that it's in your mind and what you are going to do that's going to change your environment.

- Mm-hmm.

- So, first of all, it becomes like at times, when companies have their back against the wall, they absolutely need it, right?

- Yeah.

- When you have no other way around, they see bleak prospects for growth or so. That's a good point. But it doesn't mean that when you are doing good, it is not useful. Because even when you are doing good, you can still assess your market and think about your strategic landscape and identify newer areas to stand out. It is about standing apart. Standing apart and doing something that creates high value for your users, low cost for you, so that it is a profitable way to create growth. So, at times, I have seen that company feel compelled to go for blue ocean thinking when they are really in trouble. But why wait to get into trouble before

- Yeah.

- starting to think of new opportunities? Especially because now the markets and customer expectations, customer's needs, they're changing so fast. So, I think the companies should be thinking about it all the time.

- Yeah. And if I can add to this, and correct me if I'm wrong, but I think that also ensures that once you create a blue ocean, obviously, other people are going to try to catch up with you. Then, at one point, it's gonna become redder and redder and redder.

- Yeah.

- But if you keep thinking about blue ocean in the same framework, you will keep innovating and moving the needle and moving the boundaries and defining your new space.

- And that's why they had these tools. So, for example, there's the strategy canvas. You draw it, so that you see where you are, where your competitors are, whether there are any prospects for growth or is it just going to be like a fight with your competitors and lower margins over time, and so on. And so, you keep that strategy canvas always. Go back to it every year, have a look at it. How have the market dynamics changed? Do you need another blue ocean or are you still doing good or so?

- Mm-hmm. Okay, great. So, now that we covered what it is and when or how it should be applied, let's talk a little bit about common mistakes. What have you seen over the course of your professional experience with Blue Ocean Strategy in terms of the typical pitfalls in which companies and executives fall when they try to apply Blue Ocean Strategy?

- So, in the blue ocean world, we actually call them red ocean traps. And it is because even though we talk about the blue ocean perspective and we tell people to start thinking about things in a different way, but because you are generally so entrenched in your industry, many a times, you fall back into that red ocean thinking. So, what would be those red ocean thinkings? The red ocean thinking may be that it's a customer-oriented strategy, should be customer-oriented. Go and ask your customers what their problems are and try to solve them. Blue Ocean Strategy is not about making it better for customers, it is about bringing all those other people who your competitors are not going after, but they can... So, it's not customer-oriented, it is non-customer-oriented. But people would very easily fall back into that. Many a times, people would think about Blue Ocean Strategy and think about technology innovation or feel like there needs to have some cutting edge technology. And only then a blue ocean can be created. But again, that's like red ocean thinking. It's not that. And then, the most common thing I think would be that many a times, people go towards that creating that innovation or differentiation, and just focus on that, assuming that when they're going to create something different, it's going to cost more. There is bound to be a higher cost thing for them. But Blue Ocean Strategy is about creating value and lowering cost at the same time. So, it's not just differentiation, it's differentiation and lowering cost at the same time. So, when we think about what we need to create, at the same time, we also have to think about what do we need to eliminate to bring the cost down as well. And so, these are sort of things which are an integral part of that blue ocean thinking or a blue ocean perspective. But I've seen that businesses, because you are just used to, so very used to the red ocean way of doing things, that people sort of get back into that. Or for example, another one that's very prevalent, I would say, is the niche thing. So, you are always thinking about where is that little segment, which is like different than the rest. And maybe that's the segment that you can unlock. Blue Ocean Strategy is about desegmentation. It's not about finding differences between market segments, it's about finding commonalities between larger groups and so on. So, there are these things which are very different about Blue Ocean Strategy. And I think when we start applying them, many a times, I've seen that executives would be pulled back into that thinking that they have normally always worked with.

- I guess it's hard after so many years or decades of applying the same concepts to break apart from some of these.

- Yeah.

- And there's some small nuances I think as well. You mentioned don't go and ask your customers. So, I think they'll be immediately saying, okay, so does this mean no market research? If I understand you correctly, it's not that you don't need to do that, but just go and interview other people, not the ones that are within your immediate customer profile.

- I don't know if you remember, it always keeps coming back to my mind. Henry Ford at one time had said, "If I had asked the customers, they would've said they wanted a faster horse." Because the customers cannot tell you what can be improved in the product, because it always is we want more for less and so on. And that's why you either need to go into maybe that ethnographic sort of research where you observe people, how they're using your product or service or doing their daily things where your product is going to fit in, and then observe. So, yes, marketing surveys, yeah, I don't think they have too much of value for the blue ocean thinking. You do have to investigate, you do have to do surveys, you have to have those one-on-one interviews and maybe gain the life of a customer or non-customer sort of thing or so, but it's slightly different way of doing that research.

- Okay. Interesting.

- To uncover your pain points.

- Interesting. So, we also mentioned earlier, you mentioned the new books that came out. So, my next question is about how the strategy has evolved. And this year will be the 20th anniversary since the first HBR article came out. You mentioned that it had a huge impact on you when you were studying and you wanted to find a way

- Yeah.

- to apply what you see

- Yeah.

- in real life to some sort of strategic framework. So, what has happened since then? Obviously, 20 years is not a trivial amount of time. I know it's evolved. There are new books, there's the "Blue Ocean Shift", there's another book that just came out, "Beyond Disruption". So, can you tell us a little bit about that? Where do you think

- Sure.

- it's going? How is it evolving?

- So, when the first "Blue Ocean Strategy" book was written, like I said, innovation was sort of like a newer topic at that time, and so on. So, what the professors had done, Professors Chan Kim and Renee Mauborgne, they had looked back into history and thought about, and looked into looking at innovations. They were trying to figure out what makes an innovation a success and why is it that 99% of innovations are failing. And so, they were looking at patterns and similarities between things that had become blue oceans. They were not creating blue oceans, they were trying to extract those patterns from the historical moves or so. So, it was like 30 industries, 150 successful moves, and so on. And so, Blue Ocean Strategy brought that framework where they realized and knew that it is, always it was going outside of the competition. Always it was looking for non-customers, this and that. So, "Blue Ocean Strategy" book covered that. Then, once the "Blue Ocean Strategy" book was published, of course now, people want to use those frameworks and apply it in practice and see whether it is successful or not or whatever. And so, Blue Ocean Shift came after 10 years, but it was all about applying those things in practice. The professors applied them, consultants like me applied them, many executives applied them. So, Blue Ocean Shift is more about the application of blue ocean things, and then it highlights the whole process and what executives should be doing, what sort of team should be put together, who should be in the team, how should you do the market research, and so on. So, step by step, how do you make that Blue Ocean Shift, which means how do you move from red ocean to blue ocean? What is the step by step process of doing that? That's Blue Ocean Shift. That came about 10 years afterwards. The most recent book, it is called

- "Beyond Disruption"

- "Beyond Disruption". And because one of the things, because disruption has become like people think of innovation and they think of disruption. And they feel like always this innovation has to like, this has to have that disruptive thing, which means you destroy something that's existing, and then create new. So, Beyond Disruption is really about, yes, that's important, but there is also all this other way of creating new things that do not destroy what is existing. So, it is about what sort of problem are you trying to solve? If it is a problem that was already solved and you are going to solve it better, it is going to create disruption. So, you see all of these technological improvements or so, they are all disruptive innovations. And then, there can be the other side where it is that you go and find which are some of the problems that were never addressed before, and you solve that problem. So, it's not finding a better solution to an existing problem, it is identifying a completely new problem. In between there is also that space where you redefine the existing problem, and then find a solution. So, an example of it could be, for example, the book talks about, let's say you think about the credit card industry. The problem, everybody knows what you need to do, Visa, MasterCard, these are the companies, but then, there are all these spaces outside in the blue, which the credit card company thinks is not for that. For example, it would be if I'm going to make some payment to my son, Visa doesn't think I'm their customer. If I have to go and buy, pick up some flowers from a farmer's market, Visa doesn't think they are their customer. So, Square came in, right?

- Yeah.

- And they created something new, which is not destructing the existing payment mechanism. Maybe it is destructing like cash payments or something. But looking at all these non-customers and thinking about how could these electronic payments be in that space. So, it is a non-disruptive creation. It is not disrupting something existing. It is identifying a new problem that the industry had not earlier thought about. So, that's Beyond Disruption. It's always thinking about problems that were earlier, either not there or never identified. Always, it involves those non-customers. Blue Ocean Strategies can be in the disruptive space and can be in the non-disruptive space as well. So, Beyond Disruption is that when you are thinking about problems that need to be solved, it should not just be limited to existing problems, also think about new problems that need to be identified.

- Very interesting. I think that's probably the hardest part, to identify these non-existent problems, but I cans see-

- Yeah, so once you start thinking about who are the non-customers,

- Yeah.

- it becomes very easy. We have that three tiers of non-customers framework. You are in credit card industry, make a list of everybody who's not using the credit card. Why is my gardener not using the credit card to take the payment? Why am I paying my son not using a credit card? These are all non-customers. Then, you start thinking about how do you solve that problem. And so, again and again, in so many industries, you see those examples where once you start thinking about non-customers, the ideas for non-disruptive creation are... The whole idea is that it is, because when you create something new that is not destructive for the society, because people are not going to lose jobs for it. Older skill sets are not going to become like

- Absolutely. Yeah.

- redundant, because of it or so, which always happens when you are going with sort of like creative destruction or disruption. And so, this has more of a positive tone to it. That you can create new things without destroying what is already there. There is ample opportunity for creating new things, which do not destroy some existing things.

- That's great. I think it's very, it's aspiring as well from the point of view that first of all, like you said, there's this social aspect of you knowing that you're not disrupting someone's life, because you're releasing disruptive technology that will impact them. But on the other hand, it's also inspirational for those that may not be at the forefront of technology, they may not be engineers or data scientists and they may feel like, okay, how do I innovate if I don't know how to create a new robot or AI algorithm, whatever. But like you're saying, there's so much more that you could do to innovate that doesn't need

- Absolutely.

- to be in that world. So, you mentioned very quickly an example of blue ocean when you talked about Square and credit cards. I was hoping that we can discuss a few others, a few other real world examples that you've seen, you've come across. I know that, I'm sure you've come across interesting and non-conventional examples. One thing that comes to mind is you've mentioned in one of our conversations the Blue Ocean Student Entrepreneurs Competition. Can you tell us a little bit about that? Any other example that you Care to share?

- Yeah. Absolutely. Yes. Okay. So, let me tell you about this Blue Ocean Student Entrepreneurship Competition that I run. So, I'm the executive director for it. This is a competition that was started by a high school student some years back. Blue Ocean Strategy people go and study it in school or in business school. You came across it at INSEAD. We want to bring this knowledge down to high schoolers, to younger people, to appreciate and understand the concept and come up with new businesses. So, this high school student had started it like 10 years back. Now, it is like the largest pitch competition in the world. This year, we have, I mean, I just checked the numbers a little while ago. We have about 6,300 students registered from 153 countries. So, it has really become big now. It is just a pitch competition. The students get to, first of all, they do like the blue ocean mini course, so they understand the terminology. Then, we give them the tools, so that they can come up with great ideas. And you would be surprised how interesting ideas they would come up with. So, I'll share with you some of my favorites from the competition. And these are high school students who are coming up with this idea. So, two years back, the winner was a team called Universal. They were from Taliban. And their idea was that why is it that the blood group type O, which is so rare, why can't we find a way of converting every other blood type to type O?

- Interesting.

- And so, they had done all of this research and they had looked into all these publications, and so on, and reached out to professors, and so on, and had presented this model where I'm type A, my blood type A can actually be converted. How do you know, those enzymes get, whatever needs to be done, but it converts every other blood type to blood type O. And I thought, wow, this can have such a big impact, like worldwide impact. It's such a big thing. So, that was absolutely exciting. Another student, and again, these are high school students, and they came up with the idea and they were challenging, for example, the assumption that why is it that we have to use batteries that need to be charged? Always you use like these lithium ion this or that. Even in your phone, there are batteries and the concept behind a battery is that it needs charging. And so, they said, why should a battery be... Why can't we challenge this aspect that battery does not, should not be charged? Then, we also have these energy sources that are going to last for 87,000 years or so, which is the nuclear waste. And so, they are linking why batteries cannot be, and again, they're looking at these various technologies. It was like a diamond coating or whatever. And so, they are trying to tackle two problems with one stone. One, there is that nuclear waste that is energy that just doesn't discharge. And on the other hand, the whole world is running on batteries that always need to be charged every couple of hours. So, why can't these two be linked? And so, they come up with such excite... I would say ingenious ideas.

- It is ingenious. Yeah.

- These are just young kids. They don't even like... So, yeah, so student entrepreneurship, supporting young entrepreneurs, helping them develop this talent, that's really my big passion. And that's why we talked about it earlier as well, these nephews of mine who have started the business. And so, that's what I really love to do. But coming back to other blue ocean examples. So, I would love to talk to you about this company, OneScreen, which is, I told you, I've mostly been in consulting and advising and training and all of that. But then, I took time out to go and work in the company, which is our family business, but to see how does a blue ocean actually get implemented also. And we have a wonderful blue ocean that we created over there. Now, the company is in like 52 countries. It's educational technology. And so, we make these smart boards sort of equipment that go in meeting rooms, that go in classrooms. And so, the blue ocean that we created, it is, I told you about you need to eliminate something to bring your cost structure down, and then you need to create something that's absolutely new. So, the blue ocean that we created over there that I'm very proud of and excited about, it is that we have this EdTech as a service sort of thing. So, normally, when schools are purchasing technology or even when businesses are purchasing technology, there is a CapEx you have to go. The hardware has a cost to it. So, first of all,

- Yeah.

- we made it as a service. That means they don't have to invest that heavy amount to bring that technology. So, CapEx gets eliminated.

- Yeah.

- What we created was a three-year refresh in it. Because another problem in the industry is that you get new technology. Every couple of years, there is a newer model. You don't want to be using the older model. So, we have this subscription program in which a school gets the technology, that gets the latest model every three years, their older model is replaced with the newer one without an upgrade cost to them. So, huge value for them, because there isn't any CapEx for them. And they get always to keep the latest model of the technology. Lower cost for the company, because we don't have that huge customer acquisition cost. Once you get the customer, they are tied into your contract.

- Yeah.

- So, the big cost for the company really is customer acquisition. How do you go and get new customers and so on. So, that's how you see, I wanted to also explain how this elimination and creation work together. Because if it's only some high value that is not lowering the cost for the company, then the blue ocean doesn't get created. It's just differentiation. For it to be a blue ocean, it has to be differentiation and low cost together. So, I'm absolutely very proud of that. And we have high hopes for it to

- Great. Well, that's a great example. Both of these are really good examples. Thanks for sharing those. We are getting pretty close to the end of the conversation. I always ask at the end for a quick kind of summary, key takeaways. So, if you think about anyone who listened to this or watched it three, four months ago, and now they're thinking about it and are saying, okay, what was this episode about? What would you like them to remember? What are your final words

- Yeah.

- of advice for aspiring blue ocean strategists?

- So, what I would like them to remember this conversation with, is that whenever you look at the blue ocean, think about that's where you want to be. You do not want to be in shark-infested red borders, right? If you are driving somewhere and you see the ocean, just think about you want to be in that calm space, where there are no sharks. And it is not too difficult to get there. There is a process, there is a... So, think about the blue ocean perspective of how you can get out of that competitive mindset and go and create something new that creates high value for you, for your customers, high growth, and all of that. So, that's what I would like people to take away from this conversation.

- Perfect. Well, that's a great end to our conversation. Thank you very much, Zee. Really appreciate you spending time with me and I think it was a great and very insightful discussion. I hope to maybe host you another episode in the future on a different topic. But again, thank you very much for your time today.

- Wonderful. Thank you.