How building a business case too early can ruin your Blue Ocean Strategy project

This article is the 4th in a series of 6 common pitfalls to implementing a Blue Ocean Strategy— and how to avoid them. If you missed the first three, go back and read them here, here and here. And don’t forget to sign up for my newsletter so you don’t miss any of them.

One of the key steps of Blue Ocean Strategy is generating fresh ideas which create new value in new market spaces. But if you think “brainstorming” is part of your Blue Ocean process, think again.

Many strategic planning sessions start with generating as many new ideas as possible. But what sets Blue Ocean Strategy apart from other strategic approaches is how much time is given to the ideation process in order to maximize value creation for the customer — that is, if it’s done correctly.

The problem many companies face in their Blue Ocean Strategy project is that they shortcircuit the ideation process as soon as they find the first promising idea.

The result? Less innovative ideas, less value creation and fewer growth opportunities.

In this article, you’ll learn how to correctly conduct ideation as part of your Blue Ocean strategy project – and why building a business case at the wrong time can kill your project. The insights I share come from 12 years of helping companies implement Blue Ocean thinking — including helping them set up effective ideation workshops.

But before we jump in, let’s start with a case study.

The cost of crunching the numbers too early

Blue Ocean Strategy calls for multiple rounds of ideation, which allows ample time to dig for offerings that are unlike anything the company has done before.

The biggest pitfall when it comes to finding new ideas for value innovation is jumping prematurely on good ideas and crunching numbers too early, rather than trusting the process. For example, take one of my clients, a large pharma company.

Like most companies implementing a Blue Ocean strategy, the steering committee for the project was made up of a group of executives. This group was talented at making quick decisions and jumping on opportunities with whatever information was available to them.

During the ideation phase of the project, several committee members learned about a few new ideas and immediately wanted to move forward with one of them. Instead of allowing the process to continue so more ideas could be uncovered, they jumped on an idea they liked and immediately asked the team to start crunching the numbers to assess its viability.

The result?  The team stopped focusing on how to create value. They stopped exploring new ways  to uncover even more potential for growth, because they were now focused on the numbers.

Pitfall: Choosing an idea as “the one” and crunching the numbers too early in the process

Companies that short-circuit the ideation part of their project are forgetting a key principle of Blue Ocean Strategy: it’s all about searching for new ways to create value using a systematic process which pushes us outside of our usual industry boundaries over and over again.

Jumping on the first promising idea and crunching the numbers stops the value innovation process in its tracks.

Companies looking for Blue Ocean opportunities during the ideation phase should be asking, “How can we create a superior experience for this customer?,” not “How can we get better returns?”

Putting the focus on the financial side of the idea too early kills the creativity and openness that are essential for truly innovative value creation. Once people start crunching the numbers, the focus shifts from creating value for the customers – or more accurately, the NON-customers – to the company’s returns on the idea.

Think of the Blue Ocean Strategy ideation phase like digging for gold. If you stop digging as soon as you find a little piece of gold, you risk missing the motherlode that’s hiding just a bit deeper. Of course, companies should capture those golden ideas as they come, but that shouldn’t stop them from continuing to dig to see what else they can uncover.

Allowing ample time for ideation saves time in the long run

Building a business case for an idea too early in the process not only kills the creativity, it also can be a waste of time.

The process for value innovation involves fieldwork, generating many ideas, and then sharing a range of ideas for feedback. Only then can the team narrow down the ideas based on their proven value to customers and/or non-customers.

That means that crunching numbers on ideas during the ideation phase skips the feedback phase– which is critical for assessing which ideas have the most potential. Number crunching and building the business case should only take place after the idea-sharing event– not during or even right after the ideation sessions.

By crunching numbers too early, companies risk wasting time and resources developing a business case for an idea that might not be as good as they think. They might put energy into an idea that will be rejected in the next step of the process.

Companies need to trust the Blue Ocean process, without trying to rush it or thinking they know what’s best prematurely. This means that the Steering Committee members need to suspend their judgment during this phase – which may be counter-intuitive to them. (See my first article in this series about the importance of training your Steering Committee!)

Trust the process– whether you have a great idea or not

Trusting the ideation process is also critical when ideas aren’t flowing the way a company expects. While many companies rush the process because they have a good idea early on, others give up on the process too early. Take one of my other clients for example, this time in the IT B2B industry.

While in the idea generation phase of our project, the project team was coming up dry during the 3rd round of ideation. The team hadn’t managed to dig any deeper to find a fresh idea, and questioned whether it was worth spending the additional time needed to do the 4th and final round of ideation.

Deciding to trust the process, they somewhat hesitantly agreed to give it a try – and found one of the best ideas that would go on to be chosen for implementation at the end of the project.

By pushing through the frustration and trusting the process, they were able to uncover a truly innovative idea that they would have never seen had they not put in the extra time.

The bottom line

When conducting the idea generation phase of your Blue Ocean Strategy project, make sure you allow for several rounds of ideation and assessment before jumping on one idea and building a business case for it. By trusting the process– whether or not good ideas are uncovered right away– you’ll have a better chance of finding innovative, non-obvious solutions that create fresh value for customers in new ways.


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