In the lecture this week Peter talked about strategy and competition; about establishing your company in a segment of Porter's Generic Strategies and working within that. But how do we make the decision to choose one strategy over another? What is the 'right' choice?
In previous courses I have briefly studied the concept of a blue ocean strategy and, because I am not the entrepreneurial type, I have had difficulty devising a strategy that fits into the blue ocean of a marketplace. In Mike's Bikes it is hard to consider what the blue ocean may be when no one knows exactly what the market is going to look like until new bikes are produced. The aim is to create uncontested market space (Kim & Mauborgne, 2004) but in our game is it possible? I'm not entirely sure whether it is – but like I said earlier, I'm not exactly the next Steve Jobs. As Mauborgne says, Blue Ocean isn't just about creating a brand new market, but pushing the boundaries of an existing one; in Mike's Bikes the markets are defined for us and we work within one or a few or all segments – does this automatically place everyone in a Red Ocean? To push the boundaries I guess we'd have to create demand in areas of the market where demand didn't really exist – but is this overly risky? Will anybody push out their production to reach the outer circles of the demand map? It will be interesting to see how decisions progress and strategies adjust.
Choosing the right strategy is something I've had difficulty with since forming our team – making the decision on which strategy to follow and being confident with the decision. Fundamentally, as the Director of R&D, I have a lot of input into the choice we make; however, in practice I have had difficulty being the one making that verdict. I'm not sure yet whether this is because I am apprehensive about the responsibility that has been assigned to me, or whether I prefer to be more democratic and work as a team to make (what I think are) vital decisions. What is interesting about this is, at last week's meeting, we decided to make decisions as a team, yet on Monday we changed our mind. Now it is up to each member to determine what they need in their own area and talk to the team about whether everyone agrees. In theory this sounds like a legitimate approach – each member should be taking responsibility for their own job – but when it is put to the test is the result always better?
I'm not saying that it couldn't work, or in fact that in the long run it won't work, just that at this stage I¿m not sure how I feel about it. Perhaps this is because naturally I like to have a say in what's happening – particularly if my learning is involved. So when I have to rely on other people sometimes I get a bit worried. However, I do realise that each person can't do everything, so trust in my team members' abilities is important. I also realise that I've moved away from strategy and back into last week's issue of decision making; I'll get back on track shortly. In my team I feel comfortable raising my opinion on decisions made in areas besides my own, but at the end of the day I have to accept that R&D is my responsibility, and marketing is a team mate's responsibility and so on. It's all about having faith in team members' knowledge and commitment to the course, so once again I need to stand down if there is something I am pushing intuitively, but they know it factually. Again I am learning to reign in my control-freak tendencies.
Back on track. Decisions and strategy are undoubtedly intertwined; we make the decision to follow a particular strategy, and then make decisions based on our strategy. Perhaps this is why my journal has overlapped the two – because one cannot be achieved without the other. On Monday our team decided on a particular strategy (once again changed from what we thought the week before) and this week we have worked towards, and within, the bounds of this strategy. The question of whether this is the 'right' strategy is something I'll have to come back to as the semester goes on, because right now there's just no way of knowing which strategy is going to work best. And anyway who says that our strategy has to be strapped down and tied around a concrete pole? Flexibility is important in business and being able to adjust is something that each team should be ready to do. After all, in the real world Blue Oceans don¿t stay Blue for long.
Kim, W. C. & Mauborgne, R. (2004). Blue ocean strategy. Harvard Business Review, 82(10), 75---84
Mankins, M. C. & Steele, R. (2006). Stop making plans start making decisions. Harvard Business Review, 84(1), 76--84