Wednesday, February 08, 2006

The Innovation Perspective

I was thinking recently about innovation, and especially the ideas put forth in the book Blue Ocean Strategy. If I understand the premise correctly, the idea put forth in Blue Ocean Strategy is to change the perspective or the way you view the market, and establish or frame new markets where the competition is small or non-existent, rather than chip away at market share in heavily competitive markets. I hope to read the book soon, but hopefully I've captured some of the overall meaning of the book.

If that generalization is true, then it strikes me that this form of innovation is very similar to an old joke that sales people use. Two shoe sales men are assigned a new territory - an island in the Pacific which is long known to be inhabited but never visited by shoe salesmen. The first arrives and recognizes that no one on the island wears shoes. He writes back to headquarters to ask to be brought back. His rationale? No one wears shoes on the island. A second sales person is sent to the island. He writes back to headquarters thanking them for the great opportunity. Turns out, no one on the island wears shoes, and his only competition just left.

The point of the joke is that your perspective matters. The second sales person sees opportunity in the fact that no one wears shoes, and sees big sales for himself, while the first salesperson was discouraged by this fact. One sees potential customers, the other sees no customers at all.

A good example that is often used, and I think used in Blue Ocean, is Southwest Airlines. Now, I have a bit of an inside view of Southwest as my lovely spouse worked there once. I think Southwest was started by people who simply wanted to improve the ability to get around in Texas - really not much more than that. If you have ever been in Texas you'll know there are three major cities (Dallas, Houston and San Antonio) and it is very time consuming to move between them. Texas is after all a large state. There were no inexpensive means to move between these cities, and a lot of business is conducted between these cities.

Herb Kelleher and others wanted to break the monopoly and poor schedules of the existing airlines, so they built their own. I don't think the original intent was to provide basic, low cost airfare for the common man, but to make business travel cheaper and easier within Texas.

What happened over time, though, is that Southwest recognized a huge opportunity to shift the frame of "air travel". For a long time, air travel was expensive and considered to be a luxury. Well, in the Southwest, where you can drive 10 hours and still be in the same state (believe me I've done it), long distance travel isn't a luxury but a necessity. Southwest eventually identified a core group of prospective customers who would normally drive or take the bus, and decided to bring those people to air flight. These were underserved customers that the major airlines did not think were potential customers. Eventually, Southwest became for all intents a bus that flies, offering good schedules, short hops, low fares and pleasant but minimal service. I'm not sure that was the intent from the start, but Southwest eventually created its own "Blue Ocean".

Now, this is all a matter of perspective. Southwest did not fundamentally change air travel. Pilots still sit in the planes, and baggage handlers still load and unload planes. Southwest's planes still fly between cities. What they did change was the fare structure, to make it more affordable to fly in a region where long distance travel was just accepted as a fact of life. Southwest never could have been formed in the Northeast of the United States, since you can drive or in some cases take a convenient train between most major cities.

In this instance, and in many others, innovation is a matter of perspective. What customers aren't served, and how can we serve them? What markets aren't open and how can we open them? Who needs to travel long distances and how can we change their travel paradigm?

Innovation does not have to be about new products and services. Southwest is doing what Braniff and Continental and American and TWA and so on have done for years. They simply defined a market and built a company to serve that market.
AddThis Social Bookmark Button
posted by Jeffrey Phillips at 4:53 AM

46 Comments:

Blogger Betsy Palmieri said...

Jeffrey, enjoyed your essay. Makes me want to read the book now, too. Southwest has always been a fascinating company to watch. They make it look easy don't they? But we know that simple doesn't mean easy. Thanks. Posted a link at http://ContraryValley.typepad.com.

11:01 AM  
Blogger bruno said...

hey what a nice site . your blog is great .

regards
quick payday loans

12:13 PM  
Anonymous Anonymous said...

I have good news at payday loan online for you to see. It is showing you a whole lot!
You are invited to check it out if you get time at payday loan online

9:31 PM  
Anonymous Anonymous said...

I read. I don't read fast, I just read all the time, all kinds of things.
What I think about what I've learned can be found in some oy your and mine pages at refinance mortgage .

8:04 AM  
Anonymous Anonymous said...

So, if this is your first time, or you are a returning visitor, please sign my guest
book and tell me about yourself at fast loan

8:40 AM  
Anonymous payday loans online said...

Leave me your blog address at payday loans online and I'll be sure to add
it to my blogroll and come visit you. It's just over there on the right - just click
to add your pin to the map.

2:44 AM  
Anonymous Anonymous said...

how do you come with so many ideas. i am trying to write on my Online Cash Advance , but can get much out of it .hope this helps me out. thanxs

3:08 AM  
Anonymous home insurance policy said...

It's hard enough for the blogger to be the object of gossip by those around him or her, for all the things he or she had written frankly in the blogspot page; the ideas, the opinions, the personal stuff. So, being okay with a bit of ridicule is a small give-and-take home insurance policy

4:01 AM  
Anonymous Anonymous said...

I am currently working on finding the latest information on whole life insurance when I came across your site. My passion is in the area of whole life insurance and after finding your blog, I believe we have a real synergy and that my subsrcibers would benefit from your perspective on the topic.

4:56 AM  
Anonymous Anonymous said...

Appreciated your thoughts. Thanks and visit us at Travel Tips

7:12 PM  
Anonymous Anonymous said...

Sometimesyou must be similar in character will have suffering enough from the stern still ploughing and foaming through the press, take things calmly. I liked reading this. I bookmark your blog. Keep up the good work. I am sure you will get some thumbs up :) & give your valuable feedback on http://limosbusesjets.com

2:50 AM  
Anonymous Online Generic Viagra said...

Nice innovative post......
Keep posting ideas.

10:31 PM  
Anonymous Inversiones en oro said...

hello, this day I've been searching for information on various issues, this I found very good and I would like to congratulate you for your work.
Invertir en plata

8:28 AM  
Anonymous how to stay erect said...

i agree with you. i had similiar problem and i used what you ave taught and it worked like magic

10:46 PM  
Anonymous wisata kuliner bandung said...

i agree with you. i had similiar problem and i used what you ave taught and it worked like magic

10:46 PM  
Anonymous belajar internet marketing said...

i agree with you. i had similiar problem and i used what you ave taught and it worked like magic

10:46 PM  
Anonymous delayed orgasm said...

i agree with you. i had similiar problem and i used what you ave taught and it worked like magic

10:47 PM  
Anonymous delaying ejaculation said...

i agree with you. i had similiar problem and i used what you ave taught and it worked like magic

10:47 PM  
Anonymous how to last longer in bed said...

i agree with you. i had similiar problem and i used what you ave taught and it worked like magic

10:47 PM  
Anonymous how to avoid premature ejaculation said...

i agree with you. i had similiar problem and i used what you ave taught and it worked like magic

10:47 PM  
Anonymous how to prevent premature ejaculation said...

i agree with you. i had similiar problem and i used what you ave taught and it worked like magic

10:47 PM  
Anonymous how to prolong ejaculation said...

i agree with you. i had similiar problem and i used what you ave taught and it worked like magic

10:48 PM  
Anonymous Air Compressor Buyer Guide said...

what a great work mate

11:30 AM  
Anonymous Invertir en oro said...

I think that this post is one of the best that i have read in my life, congrats you did a great job,.

7:46 AM  
Anonymous konsultan seo said...

I read. I don't read fast, I just read all the time, all kinds of things.
What I think about what I've learned can be found in some oy your and mine pages

12:15 AM  
Anonymous asuransi pendidikan said...

I read. I don't read fast, I just read all the time, all kinds of things.
What I think about what I've learned can be found in some oy your and mine pages I read. I don't read fast, I just read all the time, all kinds of things.
What I think about what I've learned can be found in some oy your and mine pages

12:15 AM  
Anonymous coach indonesia said...

I read. I don't read fast, I just read all the time, all kinds of things.
What I think about what I've learned can be found in some oy your and mine pages

12:15 AM  
Anonymous jadi artis said...

I read. I don't read fast, I just read all the time, all kinds of things.
What I think about what I've learned can be found in some oy your and mine pages

12:16 AM  
Anonymous cara dapat duit said...

I read. I don't read fast, I just read all the time, all kinds of things.
What I think about what I've learned can be found in some oy your and mine pages

12:16 AM  
Anonymous kerja sama investasi said...

I read. I don't read fast, I just read all the time, all kinds of things.
What I think about what I've learned can be found in some oy your and mine pages

12:17 AM  
Anonymous coach indonesia said...

I read. I don't read fast, I just read all the time, all kinds of things.
What I think about what I've learned can be found in some oy your and mine pages

12:17 AM  
Anonymous jajanan bandung said...

I read. I don't read fast, I just read all the time, all kinds of things.
What I think about what I've learned can be found in some oy your and mine pages

12:17 AM  
Anonymous coklat valentine said...

I read. I don't read fast, I just read all the time, all kinds of things.
What I think about what I've learned can be found in some oy your and mine pages

12:18 AM  
Anonymous Panduan SEO said...

I read. I don't read fast, I just read all the time, all kinds of things.
What I think about what I've learned can be found in some oy your and mine pages

12:18 AM  
Anonymous konsultan perusahaan said...

I think people fear idea management and innovation because there's a significant number of ideas that simply won't plan out.......Nice statement.....keep posting

9:44 PM  
Anonymous belajar internet marketing said...

this day I've been searching for information on various issues, this I found very good and I would like to congratulate you for your work.

9:44 PM  
Anonymous parcel lebaran said...

I think that this post is one of the best that i have read in my life, congrats you did a great job,.

9:45 PM  
Anonymous delayed orgasm said...

the difference between the content spammers and most corporate innovators is that the smaller

9:45 PM  
Anonymous how to avoid premature ejaculation said...

I'm writing to you because I just came across a business that I think has great potential. It lets you save money on almost everything. Make money from almost everything,

9:45 PM  
Anonymous konsultan seo said...

If growth is important to a firm, and if growth is dependent on offering existing products and services to new customers

9:45 PM  
Anonymous tabungan pendidikan said...

innovation is very natural and happens in the "real world" as new plants and animals colonize new ecological niches.

9:46 PM  
Anonymous mengecilkan perut said...

I wonder how you got so good. This is really a fascinating blog, lots of stuff that I can get into. One thing I just want to say is that your Blog is so perfect

9:46 PM  
Anonymous how to teach dogs tricks said...

We generally think most specifically about the risk associated with a new product introduction

9:46 PM  
Anonymous easy way to get pregnant said...

I would be aware that as somebody who really doesn’t comment to blogs a lot (in actual fact, this may be my first put up), I don’t think the time period “lurker” is very flattering to a non-posting reader.

9:47 PM  
Anonymous christinetjan said...

What a nice reading, your blog is really great

6:20 AM  
Anonymous alat ternak said...

thanks for sharing

9:12 AM  

Post a Comment

<< Home