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1. Identify the key businesses or product/service offerings in your portfolio

- Identify your key businesses/offerings and choose the people who would participate in the process

- At a minimum, the group should include the heads of each of the organization's units (often, the selected people may wish to bring 1-2 of their key people into the group - very helpful/reassuring as it means they can calibrate their thinking with others from their unit when it's time to plot their offering)

2. Identify which offerings are pioneers, migrators and settlers

- Goal: arrive at a reading of where each business/offering stands in terms of VALUE and INNOVATION (not in terms of MARKET SHARE or INDUSTRY ATTRACTIVENESS)

- Each offering should be assessed from the point of view of buyers, not in terms of your organization's other offerings (that is, how would buyers judge your offering: as a pioneer/migrator/settler, compared to the other offerings available to them in the market

- Value: forces one to not be complacent and assess each of your businesses based on the value it currently deliver to buyers (the value you deliver today drives buyer behaviour, which determines your future growth prospects, whereas the value you delivered yesterday determines your current market share)

- Innovation: allows one to overcome existing industry conditions. Without innovation, companies are stuck in the trap of competitive improvements. With innovation, even a once-declining industry can be turned into a highly profitable growth market. (ActiFry's strategic move turned a highly unattractive commodity industry (electric home French fry makers, which have been declining in value 10% per year) into a high-growth, high-margin, new market space.) (citizenM Hotels transformed the stagnant low-profit midrange hotel industry into a high-growth, highly profitable, new market space of affordable luxury accommodations.)

-- Industries, in the end, are what we make them. Do more of the same and watch the industry's attractiveness decline. Offer variety, innovations, and vibrancy.

How strategically vulnerable or healthy your portfolio is, is assessed on how much innovative value your product/service offer buyers. Understand this:

- Which of your offerings or businesses are "me-toos" that offer only imitative value

- Which are better than competitors but only marginally so, delivering improved value

- Which, if any, are value innovations that deliver a true leap in value

To capture this, the pioneer-migrator-setter map is divided into 3 segments:

- Pioneers: businesses/offerings that represent value innovations, they have fans, not customers. Offer unprecedented value that opens up a new value-cost frontier. These are the businesses/offerings that hold the key to renewing your portfolio, their strategy breaks away from the competition, and they are poised for strong, profitable growth

- Settlers (the other extreme of pioneers): offer value imitation, compete by making incremental changes to an offering or its price, their strategy converges with the rest of the industry. Unless the industry itself is growing and profitable, settlers have little or no prospect for growth.

-- Microsoft: over the last decade or so, Microsoft has earned more than US$100 billion in profits, yet its stock price has remained relatively flat, and is no longer the talent magnet it once was: almost all its profit comes from just 2 products (Microsoft Office and Windows), both of which are now decades old and settlers. Stock market and talent no longer see the company's next big killer app or any other pioneer. Although its R&D labs are among the most impressive and well-funded in the world, the company is not translating its advances in technology into value innovation offerings.

- Migrators lie in between: represent a value improvement over the competition and may even be best in class, but don't offer innovative value.

A successful blue ocean process is based on an "earn the right to grow" approach, i.e. selecting one settler offering, applying the blue ocean shift process to it, seeing the results, and based on this experience, roll out the process to other businesses/products/services in your portfolio.

Step 1: Get Started

Chapter 5 - Choosing the Right Place to Start

Where to begin?

- Scope out the initiative, i.e. working out which business/product/service offering you're going to tackle

- For start-ups or organizations with only 1 predominant offering, choosing the right scope is straightforward: to ensure that it gets launched in the blue ocean (not the red), start-ups need to focus on the offering that it's setting out to create

- For focused organizations and small entrepreneurs (owners of a single restaurant, plumbing service, or a local dental practice) should concentrate on their existing offering

- For existing organizations with multiple offerings (e.g. GE, IBM, Procter & Gamble whose corporate umbrellas cover many large businesses, each with wide product and service offerings. E.g. Consumer Lifestyle Division of Dutch electronics giant Philips offers products ranging from electric shavers to electric toothbrushes and air flosses, to blow dryers, curling irons, and women's electric epilation devices) - use the pioneer-migrator-settler map which allows you to assess your current portfolio of businesses/offerings in one simple graphic, hence see beyond today's performance, gain a clear picture of your organization's value innovation pipeline (or lack thereof) and the prospects for growth inherent in your portfolio

Traditionally, 2 measures were used to assess the strength of one's portfolio of offerings:

- market share

- industry attractiveness: the thinking goes - the more attractive the market, the larger the piece of it you have, the healthier you are and *the less need there is to change course* (strategy)

However, market share is a lagging indicator - it's a reflection of past, not future, performance.

Examples:

- Kodak: market leader of photographic film industry at the precise moment digital film was taking off, Kodak's market share was staggeringly large but its strategic vulnerability was high

- Apple's share of the smartphone marker was tiny when iPhone was launched, while BlackBerry's share was commanding - Apple's small market share was a product of its recent entry into the industry, not a predictor of its future success, just as BlackBerry's large market share was a product of its history that masked its strategic vulnerability.

- Symptoms: Feelings of anger or discomfort

E.g. your friend asked you for a favour to send her to the airport, and you respond by saying, “Hmm, I’m actually pretty busy but okay, I’d send you there.” - followed by feelings of anger/discomfort because you’ve gone against your will, which indicates that you failed to protect your personal boundaries.

Why can’t one protect one’s personal boundaries:

Misconception #1. If I reject someone, it means that I am selfish.

Truth: We can never fulfill every request that is posed to us. Sometimes, we have to reject someone else in order to fulfill our own needs.

Misconception #2: If I go against/disagree with someone, particularly an older person, it means that I am disobedient/not right.

Truth: One can have one’s own opinions and thoughts. It is not wrong to have a different opinion from others.

Misconception #3: When someone crossed my boundaries, it is not good for me to feel angry or offended.

Truth: Anger is normal/natural to regulate one’s emotions.

Misconception #4: If I reject others, I would feel guilty.

Truth: Sometimes we might take on more responsibilities than we can handle, some of which might not even be taken on by us. Hence, one shouldn’t feel guilty, but instead, reconsider the responsibilities and tasks before agreeing to take them on.

Misconception #5: If I reject others, I would be disliked.

Truth: If one has to go against one’s own will in exchange for/for the sake of a friendship, it would not be a healthy relationship.

How misconceptions are formed:

During childhood, a child’s power and dignity might not have been respected in society (because children are expected to be obedient by not having their own ideas and opinions) when the child disagrees or expresses his/herself and is in turn, criticized or not being taken seriously.

Sometimes, a parent/adult may expect a child to take on certain responsibilities that are not what the child should take on, e.g. conflict between parents which may cause a child to feel that he/she should take on the responsibility of maintaining the home situation.

Not being able to differentiate between which responsibility belongs to the child and which does not, it may result in the child taking on other people’s responsibilities as well when the child grows up.

Note: Parents might have unconsciously caused the above situation without ever realizing it, so it start from yourself, in order to break this vicious cycle.

Setting healthy boundaries:

1. Start by saying no: start from the basics such as your attire, your relationships

2. Practise/ get used to the discomfort that arises from saying no to others

It is normal to feel uncomfortable to implement a change from a long term habit. Use the aforementioned misconceptions to evaluate, for instance, do I feel guilty because I am unreasonably taking on too much by helping others and taking on their responsibilities instead?

Remember, it is not selfish to reject others - when one goes against one’s will to help others, one is neglecting one’s own wants and needs.

3. Practise accepting the consequences

When one has been accepting of others’ requests, other people would also be aware of one’s sudden change in attitudes, and exert more pressure on one so that one would continue to accept their requests and demands.

In this case, be assertive and say no. If the other person cares about you, he/she would respect your decision and gradually accept it. However, those that meant to take advantage and use you, they will disappear from your life once they realize that they can no longer do that.

4. It is normal for others to make requests, so do not criticize them but instead, say it from your own stand by using, “I”, “me” to assert your thoughts and opinions. It is one’s own responsibility to protect his/her personal boundaries.

If the other person does not respond respectfully to your rejections, it is the other person’s responsbility to regulate their emotions and reconsider their own opinions.

To abstain from crossing other people’s boundaries, put yourself in others’ shoes and consider from their perspectives.

Someone who appears to be demanding and force their requests on others, may seems to get what they want, but maintaining and building relationships is a basic human necessity, and not being able to have healthy relationships may in turn result in one not being able to keep any sincere/healthy relationships in the future/long run.