Senate’s Democratic Health Insurance Reform bill titled the ”Patient Protection and Affordable Care Act” aims to revolutionize the health insurance system in the United States. The 2074 page document is available for downloading and previewing at Senate Democrats website http://democrats.senate.gov. Reading through, comprehending and understanding a 2074 page document..? Thats a daunting task not just for the interested general public, but also for the government officials and even the congress men and women. Many of us would only find the time to browse through only a few pages, or maybe the table of contents and then try to find a summary of the document.
Wouldnt it be great if there was a big picture tool to describe in easily comprehendable form the overall structure and strategy the bill proposes? How much better and more effective it would be to communicate the underlying agenda, if instead of a 2074 page document, there were a few strategy canvases that graphically depicted the current strategic landscapes and the action framework.
The strategy canvas, developed by Professors Kim and Mauborgne of INSEAD can quickly capture, in one simple picture, the value factors an industry (Health care) invests in, the offering level of each factor that buyers ( Citizens of the United States of America) receive, and the strategic profile of the company (Government of United States) across the key value factors. The “as is” strategy canvas can capture where the Government stands today and the “to be” strategy canvas can depict government’s proposed future strategic profile.
To have a big picture view of the Democratic Health Insurance Reform Bill, it should be described using at least three strategy canvases representing the three critical propositions:
1) the value proposition that provides exceptional new and reformed value for the Citizens;
2) the profit proposition that enables the Government to lower its cost structure and control the budgetary deficits;
3) the people proposition that motivates all stakeholders that need to work with the Government, to voluntarily participate and successfully execute the strategy.
It might be necessary to have multiple value, profit and people curves to appropriately depict the strategy and its expected outcomes for all stakeholders. For example, its important to depict separately the value curves for senior citizens, the currently uninsured Americans as well as for insured working class. Similarly, multiple value curves might be needed to depict the people propositons seperately for health insurance companies and medical care providers.
This set of strategy canvases can quickly show in one “big picture view” whether the proposed strategy is coherent and strong and whether it has the potential to deliver unprecendented value. The canvases need to show what value factors are being eliminated and reduced that bring the industry cost strucutre down for the Government to benefit. They also need to show what value factors are being raised or new ones being created that offer exceptional value for the Citizens of United States.
A strategy’s success hinges on whether there is strategic alignment among the three propositions. So…Is the Democratic Health Insurance Reform Strategy upto this challenge? Is it offering a quantum leap in value for the Citizens, the Government and all stakeholders? Is that value being communicated effectively through the 2074 page document?
Wednesday, December 2, 2009
Wednesday, October 28, 2009
How to formulate Blue Ocean Strategy for non-profits?
In addition to a powerful strategy for profit making businesses, Blue Ocean Strategy is just as applicable to the non-profit sector.
Consider the New York Public Library (NYPL). From 2002 - 2004, NYPL funding was cut by 20% due to a budget crisis in the city of New York. At the same time, the level of competition was intensifying as the internet, the new super-size bookstores like Barnes and Noble and Borders, and other modern media were capturing a larger share of the shrinking market. Libraries were increasingly seen as dull and lackluster. In short, the NYPL was operating in a structurally unattractive industry with a shrinking budget and new tough competitors. Following the traditional view of strategy - structure determines strategy that leads to performance - the best the NYPL could have hoped for was to go head-to-head against these new rivals to maximize its share of a declining market.
Yet in less than 10 months, from 2004 to 2005, with just two staff, a miniscule budget, and scant additional marketing, Paul Holdengräber, the Director of Public Programs, made the New York Public Library one of the hottest venues in town. All new demand was created as attendance climbed by close to 400 percent. Nearly every public program event is sold out with tickets even trading for price premiums on eBay much like for rock concerts. And New Yorkers are turning again to the library for their source of knowledge. Once again, the library has become one of the most relevant institutions in the City.
In short, in the midst of a once structurally unattractive industry, Holdengräber created a blue ocean of new market space. Through his strategic actions, Holdengräber reconstructed the market, creating win-win performance consequences as scores of once non-customers - people who had never entered the library-rapidly converted into enthusiastic attendees, nourishing their minds and souls in the process.
Just like NYPL, companies and organizations of every stripe - be they in the profit or non-profit domain - can break free of the head-to-head zero-sum competition that characterizes most industries today, to open up blue oceans of new market space.
So, how do we formulate Blue Ocean Strategy for non-profit organizations. Taking the systems view of Blue Ocean Strategy as a strategic systems alignment of value, profit and people propositions, the understanding of value and people propositions remains the same as in the case of profit making businesses. The profit proposition is however handled differently. The profit curve in the non-profit case represents the underlying objective of the non-profit organization (e.g citizen’s welfare, eradicating illitracy etc) instead of the typical maximizing profits objective of the for-profit organizations.
Contact me at zunaira@strategizeblue.com for more information, or visit our website http://www.strategizeblue.comfind/
Consider the New York Public Library (NYPL). From 2002 - 2004, NYPL funding was cut by 20% due to a budget crisis in the city of New York. At the same time, the level of competition was intensifying as the internet, the new super-size bookstores like Barnes and Noble and Borders, and other modern media were capturing a larger share of the shrinking market. Libraries were increasingly seen as dull and lackluster. In short, the NYPL was operating in a structurally unattractive industry with a shrinking budget and new tough competitors. Following the traditional view of strategy - structure determines strategy that leads to performance - the best the NYPL could have hoped for was to go head-to-head against these new rivals to maximize its share of a declining market.
Yet in less than 10 months, from 2004 to 2005, with just two staff, a miniscule budget, and scant additional marketing, Paul Holdengräber, the Director of Public Programs, made the New York Public Library one of the hottest venues in town. All new demand was created as attendance climbed by close to 400 percent. Nearly every public program event is sold out with tickets even trading for price premiums on eBay much like for rock concerts. And New Yorkers are turning again to the library for their source of knowledge. Once again, the library has become one of the most relevant institutions in the City.
In short, in the midst of a once structurally unattractive industry, Holdengräber created a blue ocean of new market space. Through his strategic actions, Holdengräber reconstructed the market, creating win-win performance consequences as scores of once non-customers - people who had never entered the library-rapidly converted into enthusiastic attendees, nourishing their minds and souls in the process.
Just like NYPL, companies and organizations of every stripe - be they in the profit or non-profit domain - can break free of the head-to-head zero-sum competition that characterizes most industries today, to open up blue oceans of new market space.
So, how do we formulate Blue Ocean Strategy for non-profit organizations. Taking the systems view of Blue Ocean Strategy as a strategic systems alignment of value, profit and people propositions, the understanding of value and people propositions remains the same as in the case of profit making businesses. The profit proposition is however handled differently. The profit curve in the non-profit case represents the underlying objective of the non-profit organization (e.g citizen’s welfare, eradicating illitracy etc) instead of the typical maximizing profits objective of the for-profit organizations.
Contact me at zunaira@strategizeblue.com for more information, or visit our website http://www.strategizeblue.comfind/
Tuesday, October 27, 2009
Red Oceans, Blue Oceans
The metaphor of red and blue oceans is used to visulaize the strategic landscape that companies operate in.
Red oceans denote all existing markets, where companies engage in head-to-head competition - they fight for competitive advantage, battle for market share and struggle for differentiation. In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of the existing demand. It is like sharks engaged in a bloody fight over the customers. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities, and cutthroat competition results in a bloody “red ocean” of rivals fighting over a shrinking profit pool.
The blue ocean, in contrast, is an analogy to describe the calm, wider, and deeper potential of market space that is not yet explored. Blue oceans denote all the industries not in existence today-the unknown market space, untainted by competition. There are no sharks there. In the blue ocean, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. The image of the vast blue ocean conveys the infinite possibilities for profitable growth that exist with Blue Ocean Strategy.
Red oceans denote all existing markets, where companies engage in head-to-head competition - they fight for competitive advantage, battle for market share and struggle for differentiation. In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of the existing demand. It is like sharks engaged in a bloody fight over the customers. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities, and cutthroat competition results in a bloody “red ocean” of rivals fighting over a shrinking profit pool.
The blue ocean, in contrast, is an analogy to describe the calm, wider, and deeper potential of market space that is not yet explored. Blue oceans denote all the industries not in existence today-the unknown market space, untainted by competition. There are no sharks there. In the blue ocean, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. The image of the vast blue ocean conveys the infinite possibilities for profitable growth that exist with Blue Ocean Strategy.
Wednesday, October 14, 2009
What is Blue Ocean Strategy?
Blue Ocean Strategy is a proven system for making competition irrelevant by creating new marketspaces through simultaneous achievement of differentiation and low cost.Instead of being locked in red oceans of fierce, bloody competition, you can apply Blue Ocean Strategy to move to clear, uncontested waters of highly profitable growth.
The concepts of Blue Ocean Strategy were developed by Professors Chan Kim and Renee Mauborgne of INSEAD and published in the form of a business-book by Harvard Business School Press in 2005. The book is an international best-seller and sold more than a million copies within the first year of being published. It has been translated into 41 foreign languages uptil now.
Blue Ocean Strategy is based on a rigorous research of more than 150 new market-creating strategic moves spanning over a hundred years in more than 30 industries. The research looked for patterns and similarities that seperated successful innovative moves from the failed ones. Value Innovation was found to be the underlying logic behind all successful moves studied and formed the cornerstone of Blue Ocean Strategy. The patterns and similarities found were than translated into analytical frameworks, tools and methodologies, that make creating uncontested marketspaces a systematic, learnable, repeatable process.
Blue Ocean Strategy provides a systematic approach to achieve strategic alignment of value, profit and people propositions to make competition irrelevant , create uncontested marketspaces and achieve highly profitable growth.
Blue Ocean Strategy is useful not just to for-profit businesses, it is just as applicable to other types and levels of strategic issues ranging from a country’s national strategy; to a multinational corporation’s international success; to a small business’s local success; to an individual’s career development and all the way even to success in personal relationships.
Contact us on zunaira@strategizeblue.com or +1 (858)-324-1997 or visit http://www.strategizeblue.com/
The concepts of Blue Ocean Strategy were developed by Professors Chan Kim and Renee Mauborgne of INSEAD and published in the form of a business-book by Harvard Business School Press in 2005. The book is an international best-seller and sold more than a million copies within the first year of being published. It has been translated into 41 foreign languages uptil now.
Blue Ocean Strategy is based on a rigorous research of more than 150 new market-creating strategic moves spanning over a hundred years in more than 30 industries. The research looked for patterns and similarities that seperated successful innovative moves from the failed ones. Value Innovation was found to be the underlying logic behind all successful moves studied and formed the cornerstone of Blue Ocean Strategy. The patterns and similarities found were than translated into analytical frameworks, tools and methodologies, that make creating uncontested marketspaces a systematic, learnable, repeatable process.
Blue Ocean Strategy provides a systematic approach to achieve strategic alignment of value, profit and people propositions to make competition irrelevant , create uncontested marketspaces and achieve highly profitable growth.
Blue Ocean Strategy is useful not just to for-profit businesses, it is just as applicable to other types and levels of strategic issues ranging from a country’s national strategy; to a multinational corporation’s international success; to a small business’s local success; to an individual’s career development and all the way even to success in personal relationships.
Contact us on zunaira@strategizeblue.com or +1 (858)-324-1997 or visit http://www.strategizeblue.com/
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