Buzzword of the Week: Boardrooms Look For Blue Ocean

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Black is beautiful and yellow is mellow, but when it comes to emotionally powerful colors it's hard to beat blue. From singing the blues to sailing the ocean blue, surviving blue Mondays to smiling at blue skies, blue can convey a dizzying array of moods and feelings. Keeping that in mind, it's hardly surprising that, when it comes to buzzwords, America's boardrooms often work blue.

While there are quite a few blue terms wandering around corporate suites, the current favorite is probably "blue ocean." Coined by business professors W. Chan Kim and Renée Mauborgne, the term came to prominence with their 2005 book, Blue Ocean Strategy. As a method for business leaders to inject creativity into their companies, the blue ocean perspective divides business environments into two categories: red oceans and blue oceans. Red oceans are filled with "sharks," desperate businesses that are fighting each other for a few bloody scraps of market share. Blue oceans, by comparison, have little or no competition.

A New Term for an Old Idea

There are several other, evergreen terms for this sort of strategy -- including the massively overused "thinking outside the box" and the generically blank slate of "white space." However, Kim and Mauborgne's method augmented the well-worn idea of business creativity with a fresh metaphor and a handy four-point methodology. Not surprisingly, blue ocean thinking quickly gained the attention of the business community: recently, the Wall Street Journal touted the approach, saying it is "one of the most successful" methods that a company can use to create a dynamic strategy.

Blue ocean is currently rippling its way across MBA schools and throughout the business sphere. China Mobile, for example, is seeking blue ocean in the Chinese cellular phone market, while analysts warn there is "no blue ocean for Samsung" in a smartphone market that is crowded by Research In Motion (RIMM) and Apple (AAPL).

Of course, as soon as a phrase becomes popular, it also becomes misinterpreted. Executive recruiting expert Jason Warner suggests headhunters "Make 2011 the Year of Blue Ocean Recruitment." While one might expect that his strategy would involve searching for employees in strange, less-likely places, Warner's actual approach involves speeding-up recruitment time and treating applicants decently. In other words, blue ocean recruitment isn't revolutionary but reactionary, a flashback to a time of good manners and reduced bureaucracy.

From Water to Sky

While aggressive businessmen search for blue water, their more imaginative brethren may be investing in "blue sky" thinking. The term dates back at least a hundred years, and originally referred to laws that protected against business scams. Since the 1980's, however, it has increasingly become synonymous with a sort of creative, free-form brainstorming that disregards traditional thinking. Recently, Ben Bernanke admitted that he encourages his employees at the Federal Reserve to engage "in what I call 'blue sky thinking' -- generating many ideas." Admittedly, while blue-skying can generate a lot of thought, not all of it is useful. And as Bernanke admitted about the ideas his team developed, "Most were discarded."

Still, in a business environment where creativity has become rare, effective blue sky thinking is highly valued. Wired magazine recently singled out Xerox's Palo Alto Research Center as a major site for blue-skying, quoting one researcher who said that "The best way to predict the future is to invent it." And Felix Kramer, founder of the California Cars Initiative, says thinkers need to do a lot more blue-skying about the future of petroleum -- because, as he pointed out, blue-skying can lead to blue skies.

Some critics say that blue skying often produces unrealistic or unusable plans. But the simple fact is, the only way to real blue water is through some serious blue sky. In other words, without free form thinking, we'd all be singing the blues.


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