Imperatives of a Great Strategy Vol.7

Customer-Centricity

featuring "Blue Ocean Shift" by W. Chan Kim and Renée Mauborgne.

Crafting and executing a successful strategy is a fundamental aspect of organizational leadership. The imperatives of a good strategy design and execution have been explored and articulated by many prominent contemporary strategists whose insights have become widely accepted in the business world.

Suppose we can understand the foundational imperatives commonly shared by these thinkers and identify the recently emerged imperatives that will significantly impact the future. In that case, we can offer a new synergistic and holistic strategy thinking that builds on the foundations and addresses what is needed today.

This is why I analyzed a representative set of books and authors discussing strategy.

I selected ten that had the most significant impact on today's business practices or will have it soon. I targeted to identify and delve into the common imperatives recommended by these selected strategists, drawing from their influential books and studies.

In my research covering ten books and the thinking of their authors, I found ten common imperatives to craft and execute a great strategy:

1.???? Understanding the landscape

2.???? Distinctive Competence and Competitive Advantage

3.???? Strategic positioning

4.???? Agility and adaptability

5.???? Innovation and disruption

6.???? Alignment and Execution

7.???? Customer centricity

8.???? Data-Driven Decision Making

9.???? Continuous Learning and Feedback Loops

10. Ethical Considerations

I covered the 6th imperative, "Alignment and Execution" featuring the book "Execution: The Discipline of Getting Things Done" by Larry Bossidy and Ram Charan in the 6th article. Now we move to the 7th imperative and the specific book and the author who covered this specific imperative extensively in the book:

7. Customer-Centricity:

The customer-centric approach has gained increasing prominence in contemporary strategic thinking in recent decades. In "Blue Ocean Shift," Kim and Mauborgne emphasize the importance of understanding and catering to customer needs. A successful strategy involves creating value for customers distinctively from competitors.

In the realm of strategic management, where competition is fierce and markets are often saturated, W. Chan Kim and Renée Mauborgne, in their influential work "Blue Ocean Shift," underscore the paramount importance of understanding and catering to customer needs. The book offers a comprehensive framework for organizations seeking to break away from competition-focused strategies and venture into untapped market spaces, known as 'blue oceans.' Central to this transformative approach is a deep and empathetic understanding of customer needs as the catalyst for innovation and value creation. The book is a sequel to “Blue Ocean Strategy” built on the same foundational insight going deeper into the customer centricity and execution of the strategy.

Both of their books actually resonate a lot with the overall sigmoid curve philosophy. ?To figure out the next sigmoid leap, you must find an untapped market territory where you can create and capture a big enough new value to your customer’s unmet needs or pain points, possibly before even s/he is aware of it. This would require a new way of strategic thinking and leadership. This new way of thinking goes beyond the existing boundaries of the market, industry and the target customer definitions. This new way of thinking must create a new market and possibly redefine the industry boundaries and the target consumer. This requires asking different business questions and conducting different market research. The agility and adaptability of your leadership would play a huge role in making this happen.

We will discuss the need for this new type of leadership later on.

Shifting from Red to Blue Oceans:

In the conventional business landscape, companies find themselves in 'red oceans' characterized by cutthroat competition, often leading to the commoditization of products or services. The authors argue that the key to sustained success is creating 'blue oceans,' representing unexplored markets devoid of direct competition. To navigate this shift successfully, Kim and Mauborgne emphasize the necessity of putting customers at the heart of strategic decision-making.

The Customer-Centric Approach:

A cornerstone of the 'Blue Ocean Shift' strategy is a customer-centric approach that transcends the limitations of traditional market analysis. Instead of relying solely on existing market data, the authors advocate for engaging directly with customers to uncover latent needs and desires. By doing so, organizations can move beyond incremental improvements and leap to innovative solutions that resonate with customers profoundly.

Value Innovation:

The concept of 'value innovation' is pivotal in the Blue Ocean Shift methodology. Kim and Mauborgne posit that true innovation occurs when companies align their offerings with what customers truly value, often redefining industry standards. Understanding customer needs becomes a proactive pursuit, enabling organizations to identify pain points, unmet desires, and areas of dissatisfaction that may have been overlooked in traditional market analyses.

The Six Paths Framework:

Kim and Mauborgne introduce the' Six Paths Framework to guide organizations in uncovering new market spaces and understanding customer needs. This framework encourages companies to explore alternative industry dimensions, challenging conventional boundaries. By systematically questioning industry norms, companies can unearth opportunities for differentiation that directly address customer pain points and preferences. We had covered this framework in the 3rd imperative of “Strategic Positioning” featuring the book “Blue Ocean Strategy” by the same authors.

Practical Application and Real-World Examples:

"Blue Ocean Shift" lays out a strategic framework and provides real-world examples to illustrate its principles. From the Cirque du Soleil revolutionizing the circus industry to the Nintendo Wii disrupting the gaming market, the book showcases how companies that deeply understand and cater to customer needs can successfully create blue oceans and achieve sustainable growth.

Adapting to Changing Customer Needs:

The book also recognizes that customer needs are dynamic, evolving over time. Therefore, successful organizations must understand current needs and anticipate and adapt to emerging ones. This adaptability ensures that companies stay ahead in the market and continue to provide innovative solutions that resonate with their target audience.

Building Customer Loyalty and Advocacy:

By going beyond mere customer satisfaction, "Blue Ocean Shift" encourages organizations to create experiences that foster customer loyalty and advocacy. When products or services align closely with customer needs, they meet and exceed expectations, creating a positive feedback loop and contributing to sustained success.

"In Blue Ocean Shift," Kim and Mauborgne deliver a powerful message about the transformative potential of understanding and catering to customer needs. By placing customers at the forefront of strategic decision-making, organizations can break away from the constraints of traditional competition and navigate toward uncharted territories where innovation and value creation thrive. The book guides leaders aspiring to shift their organizations from red to blue oceans, fostering a culture of continuous customer-centric innovation that propels long-term success in dynamic business landscapes.

And It is perfectly in line with the philosophy of the Sigmoid Curve metaphor.

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Cheers,

C.Firat Caliskan