Articles—Issue 18, January 2007 Back to Article Index Is Your Business in a Red State or Blue State? You must operate your business much differently in a red state than a blue state. In this case I am not talking about Democrat or Republican states, but rather your state of evolution as a business. Kim and Mauborgne wrote a marvelous book on business strategy in 2005 (Blue Ocean Strategy) that articulates the challenges of being in a red ocean (bloody waters signifying a highly competitive environment) vs. a blue ocean where you have separated yourself from the crowd and have little if any competition.   As I’ve mentioned before, I am always entertained when “new and improved” business strategies are espoused—usually accompanied by a high priced book and ensuing workshops—when they are really repacked Peter Drucker or Michael Porter or some other long standing business principle. It could even be repackaged hockey. You might remember that when Wayne Gretzky was asked why he was so good, he responded the he didn’t skate to where the puck was; he went where the puck was going to be. In this case, one could argue that blue ocean strategy is merely Michael Porter’s differentiation in another costume. However—if you will excuse the pun—it is deeper than that.   It is extremely difficult to develop new ideas that revolutionize an industry, or better yet, create a new one. However, the challenges of competing in a red ocean are significant and over time become almost insurmountable. Commoditization, extreme competition and price wars build the landscape of many industries. The tools of competition in this arena are benchmarking, cost reduction, competitive analysis, reengineering, etc. Most of us will need these tools and many more.   However, if you can separate yourself from the pack, your challenges are more about how you can staff and equip your business fast enough to manage the growth. The possibility of accomplishing this only takes place by having frustrating, lengthy collaborative conversations. The chance of success is low. However, doesn’t senior leadership have an obligation to look for open waters? No companies are successful forever. Some are successful longer than others because they have been able to create uncontested market space.   Realistically, a company needs to have the skills to compete in a competitive environment. Most, however, do not even bother to ask the question, “How could this be different?” Do you? (c)2007 by Tood Ordal. You are welcome to share this informational article with others. Todd Ordal is a business consultant helping executives struggling with execution. Prior to founding the consulting firm Applied Strategy LLC, Todd spent over 25 years in management and executive roles such as President and CEO. You can contact Todd at todd@appliedstrategy.info