I don’t remember who originally told me to read Blue Ocean Strategy but I’m glad they did because this simple recommendation would substantially shape the course of my life and my career. The first record I have of myself reading it is one word in a blog post from 2008. I just wrote GREAT. As a writer and a marketer, the book’s impact was immediate: Avoid competitive existing markets and seek to create your own (I even write about this in Perennial Seller). As a person it was the same lesson: Don’t try to be like everyone else, be the person that only you can be.
I’m not the only one who had that reaction. The book has had a phenomenal run since its publication in 2005 with translations in over 40 languages, a bestseller on every continent, and total sales approaching four million copies worldwide. It is, quite possibly, one of the best selling business books ever published. As you know, I don’t normally rave about specific books on this column, but over the last few months I’ve been lucky enough to meet Professors W. Chan Kim and Renée Mauborgne and actually work with them.
Below is my feeble attempt at interviewing them to try to distill what made the book a success, how they initially conceived the idea, how they marketed it, and how one attempts to follow up such a massive hit (as they are doing with their new book, Blue Ocean Shift). The interview is a case study for any author looking to create a timeless and perennial work that stands the test of time and so are the lessons in their books. Enjoy!
Blue Ocean Strategy was originally published in 2005 but if I understand correctly the origins go back to a 1997 academic paper on value innovation. Can you give us a bit of background in terms of how the ideas came together? Did you have any idea what you were onto at the time?
Our ideas started very early, in fact, all the way back in the mid-1980s. At the time we were both at the University of Michigan in Ann Arbor, just outside of Detroit. This was a really tough time in American corporate history. It was the first time that America’s economic might, which had been indomitable until that time, was seriously being challenged by a new set of global competitors, Japanese corporations. In industry after industry, American companies were being forced to downsize, lay people off, and shut their doors. Consumer electronics, cars, textiles, earthmoving equipment—you name it—all were hurting, with many in the red or close to it. That’s when the Midwest shifted from being the vibrant economy it once was to the ‘rustbelt’ of America. It was a very sad moment.
Being based outside of Detroit at the time, we not only read about the devastation, we could see and feel it firsthand. It was right before our eyes. The once automobile capital of the world—Detroit—had become a ghost town. The Big Three—General Motors, Ford, and Chrysler—were hemorrhaging jobs. Houses were boarded up, few people were on the streets and those that were had no spring in their step. Their heads were hung low. Stores were empty; parking spots abound on virtually every street. And people were moving out as jobs were disappearing. People were scared. And many were angry too.
As students of the global economy, this moment felt like a turning point. We were convinced that global competition was not going down. It was just starting up. As we saw it, the economy of the developed world was shifting to a new phase. From one of demand outstripping supply following World War II to a tougher game of supply outstripping demand, which meant ever-greater competition. American companies may have been the first to feel the brunt of this emerging challenge, but we believed it was only a matter of time before companies throughout the developed world would face it too—including the Japanese. Unless prepared, it was our belief that they would fall as once-powerful Detroit was crumbling before our eyes.
With this perspective, and disheartened by what we saw, our research journey began as we set out to understand what it would take to thrive, not merely survive, as competition heated up across the globe. With growing clarity and focus, our research questions emerged. Specifically, how can a company break out of this red ocean of bloody competition and earn strong profitable growth? What does it take to reach beyond the best, seize new growth and make the competition irrelevant? That is the genesis of the now nearly thirty-year research journey we have been on.
To your question, did we know we were on to something so big? We never really thought about it like that at that time. We were young with the lofty aim not to be rich or powerful but to make a difference. We were rather quixotic. But now that you’re asking, on reflection here’s what we knew, which inspired us beyond measure. Everything we read was portending heightened competition. The game was shifting from the Little League to the Olympics. Putting our heads in the sand, or complaining that we wish competition would go away were not paths—as we saw it—to creating a strong vibrant economy or strong vibrant companies, confidence and growth. What we also knew was that the costs of not being prepared to meet this new challenge head-on were and would be devastating. Devastating to our communities, to families, and to the fabric of our societies. As we saw it, this was an issue that was not just central to a particular industry or company. It was relevant to all of us.
Now here we are nearly thirty years later, and our conviction on these issues not only stands, but has only gotten stronger as all new players have entered the global economy with a speed that no one before could have even imagined. Along with our many other articles in academic journals on strategic management and fair process, our 1997 value innovation article in Harvard Business Review constitute core arguments of our blue ocean theory.
Obviously the essence of Blue Ocean Strategy is avoiding competition and creating new markets. Was that something you thought consciously about when you were writing the book? Is there anything you did to make sure this reached new audiences—perhaps people who didn’t normally pick up business books?
That’s an interesting question. As you noted, one of our initial articles that came out of our research was our 1997 Harvard Business Review article, “Value Innovation: The Strategic Logic of High Growth.” What we found fairly early on in our research is that companies focused on beating the competition were not the ones seizing new growth. They were the ones stuck in the trap of competing, making incremental improvements over one another and duking it out, while the ones who were opening up new market spaces and seizing new growth paid little heed to what the competition was doing. Their focus instead was on offering buyers a quantum leap in value that would make the competition irrelevant.
Why do we say this? Because in writing in our first book Blue Ocean Strategy, and certainly in writing our just-released book Blue Ocean Shift—and please understand we are not saying we achieved it—but we have never veered from one overriding aim, or more accurately, one overriding obsession—and that was to deliver huge value to any person who reads our work. In the case of our first book, even with a series of bestselling Harvard articles behind us, it took our publisher five years of asking before we agreed to write the book. Why? Because we didn’t believe our ideas had matured to the point that we could really stand behind the book and believe it was our best and would make a difference to people. The same goes for our just-released second book, Blue Ocean Shift, which we are really excited about. After the success of our first book, publishers and agents came out of the woodwork urging us to write a second book ‘to capitalize’ on our first book’s success. ‘It’s sure to be a hit,’ we were assured. While flattered for sure, in truth we never gave these suggestions much of a second thought. Instead we put our heads to the grindstone and spent the next ten years doing research that we felt was required to open the blue ocean our first book created far wider. Why? Because while we could have written something earlier, we didn’t believe we had done the real research needed to make a meaningful contribution that would help organizations and would stand the test of time. The result of that decade of new research is Blue Ocean Shift. Of course, the world will be the judge of its value, but we are even more excited about it than we were with our first book. But one thing we know, as with our first book, we put everything we had within us into that book.
Talk to us about the launch of the book originally. Was it a success right out of the gate? Today, you’re knocking on the door of selling 4 million copies, can you talk to me about how those sales were distributed in terms of time and geographically?
Our publisher Harvard was a strong believer and supporter of the book from the get-go due to the sales of what had by then become a series of bestselling articles we had published in Harvard Business Review. Blue Ocean Strategy was the number one book in their new release catalogue that they were pushing. But we were also both based in France at the time at INSEAD. And while INSEAD is one of the world’s top business schools, back in 2005 beyond the top business elite it was hardly known in the States. To boot neither of us had simple easy names that felt familiar. The reality is that up till that time, no business author based in Europe had ever successfully penetrated or made a dent in the US business book market let alone become a bestseller. So while Harvard believed in the book, we received a lot of other feedback that penetrating the US market would be tough if at all possible. In the preface of our book we refer to ourselves as “two wet rats in drain” as a nod to that and to the many other challenges we faced as we published our ideas, many of which challenged the fundamental ideas the field of strategy was built on.
It must have been around early fall of 2004 leading up to the book’s launch in February 2005, that our publisher reached out to us saying it was imperative that we attend the Frankfurt Book Fair. We couldn’t understand why. We are not natural networkers and industry events, unless for research, were not something we were inclined to do. It was then that we learned that the book had won the award for the best business book of the year and that the book already had more than twenty foreign language rights sold, which at the time was a rarity. We flew home from the Fair glad but perplexed. What happened didn’t really sink in. In retrospect, we never fully appreciated the significance of the moment or what it might portend. Our knee-jerk reaction was the same as always. Heads down, back to work. Shoulder on.
Since the book came out in February 2005, it’s success has escalated steadily. That summer, as our book came out in Asia, our foreign publishers arranged a tour through Taiwan, Korea, Japan, and China. There were TV cameras, journalists, major talk shows, radio shows and crowds everywhere we went. Heads of industry and even state met with us. Our book started to outsell Harry Potter in Korea and for a brief moment the Da Vinci Code in Italy. As each language was published, the book took off in almost every market. Whether in Iceland, China, Brazil, or Denmark it soon made bestseller lists. Today the book is in 44 languages. In terms of sales, they were truly global. But since our royalty sheets are virtually impossible to read—so much so that we’ve given up trying—it’s hard to be more specific than that. Till this day, which is twelve years out, Blue Ocean Strategy continues to hit over 100 most recommended and bestseller lists around the world annually and is now part of the business vernacular in most languages. We’re not sure if we’re known. But the concepts of red and blue oceans are.
Was there anything that you felt was particularly effective marketing wise? I forget who told me about the book but I know I heard about it because someone recommended it to me. I imagine word of mouth was a huge driver of sales for this idea?
That’s a question we get asked quite often. We’re of the school of thought that the best marketing is strong content. Whether we achieve that or not is for our readers to judge. But as both Harvard and Hachette, the publisher of Blue Ocean Shift, can attest, we are tenacious to almost an unreasonable extent when it comes to content and by that we are not only referring to every word in the book. But also the copy on the jacket, the inside flaps, and even the way the table of contents renders. We would rather not publish than compromise.
That said, we did take on a publicist. We didn’t have an agent who was pushing for us as almost all authors do, so our publisher encouraged us to get a publicist for the launch, as it was our first book. So we did and that certainly helped, although we didn’t get a particularly large amount of coverage by any means. Whatever the reasons that we still don’t fully know, within months the book started getting talked about and picking up buzz pretty much on its own. Within some time, Prime Ministers, presidential hopefuls, CEOs, cool dudes like you, Tim Ferriss, and Daymond John were flagging it not mention religious organizations, museums, chefs, students and even gold medal swimmers.
Ten years after the original, you released an expanded version of the book. Why did you do one, and when do you think an author is ready to expand an original work?
After the publication of our first book, the financial crisis hit and organizations were hurting, with profit and growth stagnant if not shrinking. The red ocean of bloody competition was getting bloodier. And the world could not seem to shake off the downturn, which cast a long shadow of over our economies.
At the time, we were actively wrapped up in the research for our second book, Blue Ocean Shift. People were pushing us to publish the book early because it addressed the precise challenge nearly every organization—for-profits, nonprofits, public sector and even governments—faced. That was how to move beyond competing, build people’s confidence and seize new growth with proven steps anyone could follow—whether they saw themselves as particularly creative or not. We initially contemplated getting the book out. The timing seemed right. But again we decided against it. We were almost there with our research, but we weren’t where we wanted to be in being able to articulate and share through theory and real-life diverse cases what it takes to succeed on that journey. Our aim was for Blue Ocean Shift to provide a leap in value for people beyond our first book and we weren’t willing to compromise that.
The result was to create an updated and expanded edition of our first book which ended up neatly coinciding with its ten-year anniversary. That allowed us to update all the cases in the book and show how to create a sustainable blue ocean as virtually every company in the book had continued to outperform the market, the financial crisis notwithstanding.
Peter Thiel’s famous line, “competition is for losers,” almost sounds like it could have been pulled from your research. I’m curious of two things. One, as authors how have you thought about the competition for business readers? Two, now that you’re releasing a sequel, Blue Ocean Shift, how are you thinking about overlap between the titles? One is theoretical and one is more practical?
We didn’t think about our competitors. Our focus was on delivering overwhelming value to our readers. How we defined overwhelming value to our readers can be found in our answer to the subsequent question.
Blue Ocean Shift is as much of an idea book as it is about providing a practical roadmap any organization can use and act on to shift. It is an idea book as it expands and deepens the conceptual underpinnings of market-creating strategy outlined in the first book. By building a holistic model of market-creating strategy, Blue Ocean Shift aims to bring market creation to the core of strategic thinking along with market competition. At the same time, Blue Ocean Shift is a practical book as it shows business leaders how to use this model in practice to build their people’s confidence and achieve growth. Through the experiences of companies across the globe that made the shift by applying the very tools and process in the book, business leaders can learn what to expect at each step including what works, what doesn’t and how to avoid the potential pitfalls. Hence, it is fair to say that Blue Ocean Shift not only advances the theory outlined in the first book, but also offers a practical guide to putting that theory into practice.
If someone came up to you today and wanted to write a business book that is truly remarkable that would stand the test of time (as opposed to the many books which are quickly forgotten), what would be some of the questions that you’d push them to ask themselves?
There are three key questions to answer for any idea to make lasting impact. The first is about relevance: does this idea address an issue of central importance and universal appeal to business and companies? However theoretically powerful an idea, it won’t gain mainstream acceptance unless it is relevant to real and crucial problems people and organizations face. The second is about actionability. Can you act on the idea? Does it offer useful tools and processes with which organizations and individuals can put it into practice? Is it descriptive or prescriptive? The third is about rigor. Is this idea grounded in robust research? What are its theoretical and empirical grounds? If your answers are yes for all these three questions then your book has a good chance to stand the test of time.
Did you have a timeline for a follow-up book? Tell us about the process of thinking about and then knowing that you had the material, research and the subject matter for the next book. How did you know you were ready?
In writing Blue Ocean Shift, as we noted, we were aiming to answer executives and entrepreneurs overriding question ‘how do we do it? How do we shift our team, ourselves, and our organization from the red to the blue ocean in a way that our people own and drive the process so we succeed?’ This is the question left unanswered by our first book. Hence, our timeline for Blue Ocean Shift hinged on our goal of codifying proven steps that any organization could apply. Which meant we needed to include research on 1) organizations that are applying the blue ocean ideas and tools in real time to see what works, what doesn’t, how to put the right team together and how to avoid potential pitfalls along the journey, and 2) we needed a diverse and rich sample of organizations to be able to identify steps that any organization—large or small—could measurably benefit by using, with wise advice that would work across a range of real world settings. That takes time, but that’s also what it takes to be able to provide a meaningful systematic process.
In the process of answering the question ‘how do we do it’, we found that we needed to address three key issues. The first issue was about the current obsession with the need for disruption and creative destruction to create blue oceans. This obsession is misdirected, as it explains only half of the story of the creation of blue oceans. The other half, the more important half, is what we call nondisruptive creation. No one was paying attention to it, yet it holds huge opportunities for new growth for organizations. So Blue Ocean Shift needed to embrace the notion of nondisruptive creation.
The second issue concerned with people’s confidence. We had seen companies struggle to create blue oceans when they failed to get the people element correct. This element has to do with our basic need for security, respect and dignity. Blue Ocean Shift deals expressly with what we call the humanness of people, not in a mushy feel-good way, nor with carrots and sticks, but by providing real tools we can all use to earn our employees’ commitment, trust and cooperation so they go the extra mile.
The last issue was that we wanted to share a variety of rich, real-life stories about organizations of every stripe putting the process and tools outlined in Blue Ocean Shift into practice, and the results they achieved. This variety was important for people to relate these stories to their situation, and, at the same time, be inspired by learning from organizations that faced far more severe constraints than they did and yet shifted from red to blue. Like a $6million dollar healthcare company who applied the approach and saw its business boom before being sold just two years later for $185 million to Johnson & Johnson; how the bravest orchestra in the world was created in war-torn Iraq using the approach; how a 100 year old French multinational in small appliances applied it, got Oprah tweeting, and grew the market by 40%; or how one of, if not the, most profitable hotel chains in the world was created by applying the very tools and approach in the book, thereby opening up the new market of affordable luxury hotels.
It was when we could address these issues that we felt Blue Ocean Shift was ready. This has taken us more than a decade of new research. This journey is our life’s work. With supply exceeding demand in virtually every industry, we believe the future will belong increasingly to those who understand how to create, not compete. We believe that entrepreneurs, executives, managers, or any other type of leader, cannot afford to miss Blue Ocean Shift if they want to build a compelling future for themselves and their organizations.
As a last question, because I imagine it’s something that both of you have had to think about, when you are coming off a huge success as you were, how does a creator avoid being intimidated? Did you learn any lessons or tricks that would be helpful to someone looking to top something they’ve done?
Our answer to this question is the same as the above. We have been asking the above three questions about relevance, actionability and rigor while researching and writing Blue Ocean Shift. We have been pushing ourselves until we are able to answer those questions yes with confidence. When we passed this general test, we asked our Blue Ocean Strategy theorists and practitioners the following question: does Blue Ocean Shift address the questions unanswered in the first book? If yes, how satisfied are you with our answers? While writing Blue Ocean Shift, a sequel to our first book was a challenging experience intellectually and emotionally, answering the above questions was very helpful for us. The lesson here is to concentrate on why you are creating your sequel by answering these questions.
Ryan Holiday’s latest book, Perennial Seller: The Art of Making and Marketing Work that Lasts is a meditation on the ingredients required to create classic books, businesses, and art that does more than just disappear. His writing has been translated into 28 languages and sold half a million copies worldwide while his creative firm, Brass Check, has worked with companies like Google, Taser and Amazon. You can join the 80,000 people who get his weekly articles.
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