Moving To Blue Ocean Strategy: A Five-Step Process To Make The Shift

BOOK REVIEW

Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, Authors: W. Chan Kim and Rénee Mauborgne.
Blue Ocean Shift: Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth, Authors: W. Chan Kim and Rénee Mauborgne.

By Steve Denning – Instead of struggling to survive in the bloody shark-infested “Red Oceans” of vicious competition, why not move to the “Blue Oceans” where there was little or no competition?

What inspired the authors was not “dividing up markets or the globe,” but rather organizations and individuals that created “new frontiers of opportunity, growth, and jobs,” where success was not about fighting for a bigger slice of an existing, often shrinking pie, but about “creating a larger economic pie for all.” The book was a publishing sensation. It sold more than 4 million copies and has been translated into 44 different languages.

Now, 12 years later, the authors offer an exciting new book that synthesizes their experience in assisting with the implementation of Blue Ocean strategy.

In effect, Blue Ocean strategy involves market-creating innovation. It opens up new possibilities that are not available to organizations operating within the existing cost-value structure. It expands the universe as to what is possible, often enabling higher value at lower cost.

Perhaps the most important chapter is Chapter 3, which delineates the Blue Ocean mindset and the distinctive opportunity-based thinking that is at the foundation of Blue Ocean strategy.

It is a perspective that enables strategists “to ask a fundamentally different set of questions,” the answers to which “in turn enable them to perceive and appreciate the fallacies behind long-held assumptions and the artificial boundaries we unknowingly impose on ourselves.” more> https://goo.gl/hNPdDG

Beware The Perils Of Groupthink, Yet Meetings Can Still Be Useful

BOOK REVIEW

Wiser: Getting Beyond Groupthink to Make Groups Smarter, Authors: Reid Hastie and Cass Sunstein.
The Conversation – Traditional groups exacerbate some individual judgment and decision biases. Examples include the planning fallacy, in which people underestimate how much time will be needed to complete a task, and the sunk costs fallacy, irrationally investing more in a project because so much has been put into it already, when it would be better to just let it go.

But groups also cure some individual bad habits. Among these are anchoring (a tendency to rely on the first piece of evidence offered), availability (overestimating unlikely events) and some forms of narrow framing.

This is where the important role of leaders come into play, to prevent groupthink and bring out the best in their employees. more> https://goo.gl/tX215a

Updates from GE

A Better Way To Fly A Jet? Qantas Pilots Have An App For That.
By Amy Kover – As a flight crew fuel manager, Qantas First Officer Dave Summergreene was “blown away by the wealth of data” the airline possessed. “But as a pilot, we had no way of knowing how to improve our own operational flying efficiency because we didn’t have the data,” he says. “We needed to get this data into the hands of pilots.”

As it turns out, GE had the same idea in mind when it developed a prototype for a fuel-efficiency app for pilots. However, what GE was missing was pilots, who could provide the insight and everyday experience to make the idea work.

But in late 2016, everything clicked. Qantas and GE agreed to collaborate, and within a few months, 20 eager pilots signed on to test out the beta version of the app. The end result: FlightPulse, a new flight data and analytics application that enables pilots to measure fuel use during every stage of a flight.

John Mansfield, chief digital officer for GE Aviation and a former pilot, notes that even though the data remains anonymous, “we are all really kind of competitive. We want to get better at everything we do.”

With FlightPulse, pilots can now see data from every flight, illuminating how much fuel savings they realized, where they can make improvements and how their use of the tool compares with that of their peers.

Before FlightPulse, pilots just stuck to industry standards — model-based estimates of the most efficient ways to fly. Now, they can tweak their flying daily to precisely gauge the impact of operational decisions. more> https://goo.gl/b2nQYe

Is taxation theft?

BOOK REVIEW

Anarchy, State and Utopia, Author: Robert Nozick.

By Philip Goff – Outside of academia, almost everyone assumes that the money I get in my pay-packet before the deduction of taxes is, in some morally significant sense, ‘mine’.

This assumption, although almost universal, is demonstrably confused.

There is no serious political theory according to which my pre-tax income is ‘mine’ in any morally significant sense. Moreover, this matters: this confused assumption is a major stumbling block to economic reform, causes low and middle earners to vote against their economic interests, and renders it practically impossible to correct the economic injustices that pervade the modern world.

Your gross, or pre-tax income, is the money the market delivers to you. In what sense might it be thought that you have a moral claim on this money? One answer might be that you deserve it: you have worked hard and have done a good job, and consequently you deserve all your gross income as recompense for your labor. According to this line of reasoning, when the government taxes, it takes the money that you deserve for the work you do.

This is not a plausible view. For it implies that the market distributes to people exactly what they deserve for the work that they do.

But nobody thinks a hedge-fund manager deserves many times more wealth than a scientist working on a cure for cancer, and few would think that current pay ratios in companies reflect what philosophers call desert claims.

Probably you work very hard in your job, and you make an important contribution. But then so do most people, and the market distribution of wealth patently does not reward in proportion to how hard-working people are, or how much of a contribution they make to society. more> https://goo.gl/vTK8Vn

How The OECD Wants To Make Globalization Work For All

By Ronald Janssen – In its key issues paper for the Ministerial Council, the OECD recognizes that the frictional costs of opening to world trade have been much higher than so far assumed.

Workers losing their job because of competition with low wage economies were supposed to find new jobs elsewhere and do so quickly because the same process of globalization would be pushing up overall national income.

The OECD now openly admits that this assumption was wrong.

A second critical stance is taken on what the OECD calls a ‘plausible’ link between globalization and rising inequalities. Here, it explicitly admits that globalization has weakened the bargaining power of labor in advanced economies, invoking the threat of cheap import competition from low wage countries as well as that of moving investment and production there.

Trade and investment deals are often rushed through parliaments when all details have been negotiated, thus providing big business the opportunity to weigh on decision-making by massive lobbying of governments in the preceding trade negotiations themselves. The OECD specifically adds that ‘the cost-benefit balance of provisions such as ISDS look increasingly questionable, especially when both sides are advanced economies with low risk of discriminatory treatment of foreign investors and reliable judicial systems.” more> https://goo.gl/TM76h7

Our illusory sense of agency has a deeply important social purpose

BOOK REVIEW

The Cognitive Neuropsychology of Schizophrenia, Author: Chris Frith.

By Chris Frith – We humans like to think of ourselves as mindful creatures. We have a vivid awareness of our subjective experience and a sense that we can choose how to act – in other words, that our conscious states are what cause our behavior. Afterwards, if we want to, we might explain what we’ve done and why. But the way we justify our actions is fundamentally different from deciding what to do in the first place.

Or is it? Most of the time our perception of conscious control is an illusion. Many neuroscientific and psychological studies confirm that the brain’s ‘automatic pilot’ is usually in the driving seat, with little or no need for ‘us’ to be aware of what’s going on. Strangely, though, in these situations we retain an intense feeling that we’re in control of what we’re doing, what can be called a sense of agency. So where does this feeling come from?

Humans are social animals, but we’d be unable to cooperate or get along in communities if we couldn’t agree on the kinds of creatures we are and the sort of world we inhabit. … more> https://goo.gl/yohWCj

Updates from Aalto University

Collaboration and partners
By Pia Kåll – When I was still in high school and even during my matriculation exam, I was convinced that University of the Arts was the place to be for me. However, at the time of applying I changed my mind and applied to Aalto University to study applied physics because it sounded challenging. It also felt like the right thing to do – to let art be a hobby and get a job from another field.

After I graduated, I started my dissertation. However, I didn’t finish it because I visited a McKinsey recruitment event and decided to grab the opportunity to influence the development and strategy of large, global companies as a consultant.

When I was offered a seat on the Executive Board of Outotec, I just couldn’t decline the challenge. At first, I led Strategy and M&A and later on broader responsibilities including product development and development of business processes and operational models.

In that position I realized that I enjoy working in different situations and with different people in as many different fields, and among as various questions as possible. In private equity , these sides are combined. When I transferred to CapMan, I first worked as a Partner in Buyout, and starting from June 2017 I have worked as a Managing Partner. more> https://goo.gl/DzM5Na

Related>

Who Needs Washington?

On healthcare and climate change, governors step in where Congress can’t – or won’t.
By Susan Milligan – Congress may be unable or unwilling to pass major legislation.

Governors and states, lauded as laboratories of democracy at best and recalcitrant junior players at worst, are stepping up to fill the power void.

And while governors are more empowered to stop federal policies or legislation than to force their enactment, the state players can have a great deal of influence over how the whole nation – and not just their constituencies – live, experts say.

On climate change, too, governors in both parties are implementing environmental policies Trump has rejected as too onerous on business.

The sheer size and economic influence of states can push national policy and trends as well. Texas, with its big buying power in school textbooks, has an outsized influence on details such as questioning evolution in science textbooks.

And while California’s greenhouse emissions standard might not be much liked by industry, which one would refuse to do business with the Golden State, which has the sixth-biggest economy in the world? And when states can’t stop Washington from passing policies, they can slow-walk their implementation or scream so loudly Washington is forced to regroup. more> https://goo.gl/zU7ruc

The Next Crisis Will Start in Silicon Valley

By William Magnuson – It has been 10 years since the last financial crisis, and some have already started to predict that the next one is near. But when it comes, it will likely have its roots in Silicon Valley, not Wall Street.

Our banks are better capitalized than ever. Our regulators conduct regular stress tests of large institutions. And the Dodd-Frank Act imposes strict requirements on systemically important financial institutions.

But while these reforms have managed to reduce the risks that caused the last crisis, they have ignored, and in some cases exacerbated, the emerging risks that may cause the next one.

These financial technology (or “fintech”) markets are populated by small startup companies, the exact opposite of the large, concentrated Wall Street banks that have for so long dominated finance. And they have brought great benefits for investors and consumers. By automating decision-making and reducing the costs of transactions, fintech has greased the wheels of finance, making it faster and more efficient.

But revolutions often end in destruction. And the fintech revolution has created an environment ripe for instability and disruption. It does so in three ways. …

Wall Street is no longer the future of finance. Silicon Valley is. more> https://goo.gl/LK6CsY

Related>

Why religion is not going away and science will not destroy it

BOOK REVIEW

The Territories of Science and Religion, Author: Peter Harrison.
Narratives of Secularization, Editor: Peter Harrison.
The Future of Christianity, Author: David Martin.

By Peter Harrison – Scientists, intellectuals and social scientists expected that the spread of modern science would drive secularization – that science would be a secularizing force. But that simply hasn’t been the case. If we look at those societies where religion remains vibrant, their key common features are less to do with science, and more to do with feelings of existential security and protection from some of the basic uncertainties of life in the form of public goods.

The US is arguably the most scientifically and technologically advanced society in the world, and yet at the same time the most religious of Western societies.

As in India and Turkey, secularism is actually hurting science.

In brief, global secularization is not inevitable and, when it does happen, it is not caused by science. Further, when the attempt is made to use science to advance secularism, the results can damage science.

The conflict model of science and religion offered a mistaken view of the past and, when combined with expectations of secularization, led to a flawed vision of the future. Secularization theory failed at both description and prediction.

The real question is why we continue to encounter proponents of science-religion conflict.

Religion is not going away any time soon, and science will not destroy it. more> https://goo.gl/ZjLZJx