Blue Ocean Strategy Making a Blue Ocean Shift

Red Ocean Strategy • • • Compete in existing market space Beat the competition Exploit existing demand Make the value-cost trade-off Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost

Blue Ocean Strategy • • • Create uncontested market space Make the competition irrelevant Create and capture new demand Break the value-cost trade-off Align the whole system of a firm’s activities in pursuit of differentiation and low cost

Thunder Bay Public Library 100, 000 people in north western Ontario A budget of $6. 5 million A staff of 56 FTE Actively used by 29 per cent of the population Over three million interactions with the community p. a. • Personal visits and physical circulation have fallen by over 30 % in the last ten years • • •

Overview • What blue ocean strategy is, when it’s been used, who has used it, who has not used it, and why • How TBPL has adopted blue ocean strategy and made a blue ocean shift • The benefits that TBPL has seen as a result of making this blue ocean shift

Systematic Approach • • • Reconstruct Market Boundaries Focus on the Big Picture Reach Beyond Existing Demand Get the Strategic Sequence Right Organisational Hurdles Build Execution Into Strategy

Reconstruct Market Boundaries • We reconstructed market boundaries to reframe TBPL as democratic public space – a space which is owned by nobody and therefore owned by everybody; a space where you don’t need a reason or a level of income or a certain lifestyle to be there

Focus on the Big Picture • Personal visits to TBPL (the number of people walking through the door of the library) fell from a peak of 682, 200 p. a. in 2011 to just 439, 982 p. a. in 2017. • Physical circulation (the number of items physically checked out of the library) fell from a peak of 941, 526 in 2006 to just 698, 662 p. a. in 2017.

Reach beyond existing demand • We reached beyond existing demand to engage with the three tiers of non customers • The soon to be non customers • The refusing non customers • The unexplored non customers • To boost library membership

Get the Strategic Sequence Right • We got the strategic sequence right by aligning the structures, systems and organizational culture of TBPL with the strategy. • These elements were mutually reinforcing and driven by a five year Strategic Plan

Organisational Hurdles • We overcame the four main organisational hurdles • Limited resources • Unmotivated staff • Opposition from powerful vested interests • An organisation wedded to the status quo • By using disruptive innovation to create a new paradigm of permanent change

Build Execution Into Strategy • We built execution into strategy by employing fair process • Engagement • Explanation • Expectation clarity • To ensure that when the time came to execute the strategy staff members would exceed expectations because they were self initiated

Blue Ocean Shift • • • Get Started Understand Where You Are Now Imagine Where You Could Be Find How You Get There Make Your Move

Get Started • The Pioneer-Migrator-Settler Map • Pioneers offer value innovation - they don’t have patrons; they have fans • Migrators offer a value improvement over the competition but do not offer innovative value • Settlers offer value imitation - they compete by making incremental changes to the service

Understand Where You Are Now • The Strategy Canvas • TBPL versus Online Services • Key factors - free, variety, brand, service, access, expertise, convenience, space, sharing • Red Ocean - convergence (competition) with online services • Blue Ocean - divergence (value innovation) from online services

Imagine Where You Could Be • The Buyer Utility Map • The Six Stages of the Patron Experience Cycle – visit, purpose, activity, support, renewal, return • The Six Patron Utility Levers - customer productivity, simplicity, convenience, risk reduction, fun and image, environmental friendliness

Find How You Get There • Four Actions Framework • Eliminate – Pinterest, fines, Hoopla, non strategic activities, duplication of effort • Reduce – displays, desks, programs, rules, print media, Technical Services • Raise – return on investment, profile, aesthetics, self service, open hours • Create – community led creative space

Make Your Move • Review the previous four steps and gather key learning points • Decide on a number of potential Blue Ocean moves and select one for piloting • Conduct rapid market tests to cross-check public reactions and refine the idea • Formal launch – partners, streamlining and innovation, energy and contributions

Benefits, Impacts, Outcomes • Synergy of purpose, vision and values • Capital and operating investment in the future development of the community hub • Improving TBPL personal visits to the library and physical circulation • Streamlining and innovating operations • Multiplying people’s positive energy and contributions

Questions • jpateman@tbpl. ca • W. Chan Kim & Renee Mauborgne (2005) Blue Ocean Strategy: how to create uncontested market space and make the competition irrelevant • W. Chan Kim & Renee Mauborgne (2017) Blue Ocean Shift: beyond competing - proven steps to inspire confidence and seize new growth