Wednesday, January 4, 2017

Book Summary: Blue Ocean Strategy

 Kim, W. & Mauborgne, R. (2015). Blue Ocean Strategy (Expanded Edition). Boston: Harvard Business School Press. ISBN 13:  978-1625274496


The Market space is divided into the Red oceans, where the competition is stiff and defined, and the Blue oceans, that is unexplored with new customers and without competition. The creation of blue oceans need a new approach, called as Value Innovation, to execute the strategy of maximizing the customer value and breaking from the competition through innovation. Use of analytical tools and action frameworks such as, Strategy canvas, four actions framework, Eliminate-Reduce-Raise-Create grid, would minimize the risk in the execution of a good blue ocean strategy that is focused on business objectives with a compelling tagline and that is divergence on competition.


Reconstructing the market boundaries using the "six paths framework" is useful to develop a successful blue ocean strategy that focuses on the big picture, not on the numbers alone. That strategy, through a step by step visualization, is used to unlock the people's creativity as well as to influence the company’s decision makers to successfully adopt within the company. Finally, build the strategy in the sequence of buyer utility, price, cost and adoption strategies and quantify its effectiveness to go for the largest catchment of buyers who were deemed as non-customers.

There are four organizational hurdles: cognitive, resource, motivational and political hurdles that need to be overcome to successfully execute the blue ocean strategy. After overcoming those, align the three strategy propositions i.e. value, profit, and people, as well as establish a viable fair process based on Engagement, Explanation, and Clarity of Expectations. Even when the organization is sailing in the blue ocean, there will continuous be challenges from the imitators for which there is need to constantly renewing the blue ocean strategy as well as putting various barriers such as: propositions alignment of value, profit and people; cognitive and organizational barriers; strong brand image; economic and legal barriers, etc. Finally, the author identifies the ten most common myths and traps of red oceans that the organizations need to be aware of to avoid falling into them. These traps label the blue ocean strategy as: customer oriented strategy; synonymous to differentiation and disruptive strategy; innovation and new technology only; low-pricing; be first in the market, move away from core business.

Book Summary: The Lean Startup

 Ries, Eric (2011). The Lean Startup. New York: Crown Business. ISBN-13: 978-0307887894


The entrepreneurs had given up the traditional management practices due to the lack of positive result that created a vacuum of any defined process to make a Startup: a human initiative designed to create a product under extreme uncertainty, less susceptible to failure. To fill that gap, the Lean Startup utilizes the Build-Measure-Learn feedback loop to create the optimal product through a constant tune up of the strategy while keeping the overarching vision unchanged. Validated learning, the practice of identifying the desires of consumers and adjusting the product and strategy, helps to resolve the great riddle of any startup whether it should build the product in a sustainable business model. Experimenting the hypothesis, both value and growth, with a minimum viable product and doing it early is the key to a successful startup, be it small or large scale. Alternate to that is to plan in isolation that can only happen in a stable operating environment, which is becoming a rare state of affairs.


Successful entrepreneurs are beyond just being at the right place at the right time, but they have the ability to validate the “leap of faith” assumptions using the value and growth hypothesis. Entrepreneurs should go and see for themselves, “Genchi Gembutsu” in Japanese, to design the right customer archetype instead of circling in analysis paralysis and use the Minimum Viable Product (MVP), designed to be imperfect, without the fear of being copied over by competitors. Entrepreneurs should use Innovation Accounting to effectively assess the progress of an entrepreneurship using the three learning milestones: Establish the baseline to get real baseline data in its growth model; Tuning the engine by improving its drivers of growth model; Pivot or persevere using “actionable metrics” instead of a “vanity metrics”. Every Startup needs a periodic assessment of whether to Pivot or Persevere i.e. validating the “Strategic hypothesis” and then Pivot, when needed, by using some of the common Pivot strategies: Zoom-in, Zoom-out, Customer Segment, Customer Need, Platform, Business Architecture, Value capture, Engine of growth, Channel, and Technology Pivots.

The Lean startup model encourages using smaller Batch Size (e.g. single-flow process), Continuous Deployment regardless of whether it is a software or hardware product. The sticky engine, viral engine, and the paid engine are the engines of growth of a startup with four sustainable growth drivers, such as, new customers that come from the actions of past customers, words of mouth, a side effect of product usage, and through paid advertising and repeat purchase. To make the organization adapt to the changing environment, the “Five Why” tool is useful to identify areas to make a proportional investment. Startup style initiative in a large organization should create a sandbox of innovation and be independent enough to take disruptive innovation decisions and execute them with the right resources and budget. Finally, managing startups contradict with Frederick Taylor’s scientific management theory where people are put first, not the system to avoid the danger of turning the business systems too rigid to exploit the opportunities in the market.

Book Summary: The Myths of Innovation

Berkun, Scott (2010). The Myths of Innovation. Sebastopol, CA: O'Reilly Media. ISBN: 978-1-449-38962-8

Contrary to the popular belief of epiphany and of lone inventor working in isolation, the major innovations are the outcome of a chronological progression made by combining or mixing prior inventions by a series of inventors.Though the history of inventions tells us that there are only winner or losers in the journey of innovation but the reality is that there is a range of contributors to a particular innovative product or service. There are no definite method or a systematic process to manage innovation, but an effective manager who is not traditionally trained, can foster innovation by understanding the challenges that the inventors face. Though there are no shortage of good ideas surrounding us that can be turned into good inventions, but the bitter reality is that most people are not comfortable with new ideas because of the innate nature of human psychology that resist changes. The abundance of good ideas will continue to flow as long as we do not shut the door of new ideas and accept the notion that the best innovative product or service may not come from the very first idea.


Most successful innovation is the product of systematic process executed by talented and genius people. The source of innovations are a finite set of situations: Unexpected occurrences, Incongruities, Process Needs, Industry and Market Changes, Demographic changes, Changes in Perception, and New Knowledge, that triggers the talented people to search for innovative ideas in an entrepreneurial endeavor. The success or failures can’t be predicted for sure, but it can be said that the best innovation comes from the people who meticulously follow their passion in a disciplined methodical way. 

Discovering the right problem is more important than the solution itself and the successful adoption of the innovation is not necessarily driven only by how novel or great that idea is but how simple it is to explain the innovation for public to grasp. Though every Innovations come with promises of wellness to the masses but, innovations have side effects or unintended consequences that may not be predicted upfront. Executing the innovation needs financial support and it is key to be thoroughly prepared with your pitch to get that support, through: refining the idea and the pitch itself, rehearse the delivery of pitch, hitting the right audience, learning from previous pitch's mistakes, etc. Creativity is crucial for innovation and here are few quick tips to be creative, such as: de-romanticizing the creative legends, acknowledging creativity as combination of other ideas, keeping a journal of ideas, being physically active, giving subconscious a chance, being conscious about the time when one's creativity is turned on, etc. Finally, hold your motivation through tough time but there’s no singular factor or set of factors that keep everyone motivated, nonetheless, some of the generally accepted motivations are: Anger on the wrong things that surround us, accept that all great innovation requires mundane and boring ground works, being proud of one’s own work and prove that to the world, life is short so pursue on the passion now or never, It’s really fun to follow one’s passion, etc

Book summary: The Second Machine Age

Brynjolfsson, E. and McAfee, A. (2014). The Second Machine Age. New York: W.W. Norton & Co. ISBN 978-0-393-23935-5.

The human history of progress has seen astonishing development since the beginning of the industrial revolution, powered by technological innovation that boosted physical power, and is expected to continue with the current digital revolution by boosting mental power. We’re at the Inflection point where the distinction of human advantages of doing cognitively creative and seemingly small unpredicted activities over machines is expected to disappear soon. The constant doubling of computing power in nearly every two years, as predicted in Moore's law, is making the science fictions a reality. The fuel behind the digital revolution, the Information and Communication Technology (ICT) is a General Purpose Technology (GPT) that excels through recombining ideas which doesn't get used up through usage. More and more of our everyday stuffs, such as, books, maps, human interactions, etc. are going digital and is creating an enormous opportunity that defies the traditional economics of scarcity and creates the digital economy of abundance.

Artificial Intelligence has matured to the point where we now have “machine” that can think - the very notion that was solely attributed to a human being. The billions of connected people in the world with access to the world's stock of knowledge, is creating the opportunity of infinite computing thus enabling endless innovation. Just like the first machine age did with the power of steam and internal combustion engines, and electricity, this second machine age with digital power has increased the productivity in manifold. But this is not reflected on GDP as most of the assets created are intangible in nature or virtually free. The second machine age, armed with digital technology, has created the Winner-Take-All economy where it is now possible for a very small number superstar people to acquire a vast amount of wealth due to the accessibility and economy of scale and making the age old social problem of growing inequality to its worse state.

The bounty of the second machine age is causing the spread to increase and ultimately putting the progress of the prior machine age at risk. Though there's debate among the economists whether technology brings the employment down or not, but the recent data shows that the digital technology has proved to increase the productivity independent of the need of job growth. To overcome that challenge, we have to reinforce the skills, such as, Ideation, large-frame pattern recognition, etc. at the individual levels, as well as revisiting some of the policies that will strengthen the society, such as, teaching our kids, supporting our scientist and teachers, upgrading the ailing infrastructures, restructuring taxation and, potentially, enacting the basic income guarantee. In the long-term, creating jobs for human should the center of gravity to avoid the unwanted consequences of joblessness. The future is fuzzy and often looking grim, but if we are mindful about what we value for our society and as individual, we can shape our destiny.