The Blue-Bag Opportunity: Interpret Outside Events
Most creative business propositions have not come from brilliant inventions but from keen observation and creative interpretation of external events, yet many companies focus on refining their proposition or solution for a business challenge and defending it from outside invaders. Ideally, they should be continuously screening thehorizon for totally new opportunities to deal with the customer need the product or service satisfies, and they should be prepared to destroy their old solution and replace it with a totally new one.
In virtually every company, the external changes—in terms of evolutions or discontinuities in market needs, technology, or distribution—are staring management in the face, but management has not interpreted the implications of such changes into new product/service solutions.
The idea of Blue Bag Opportunities stems from one of the most famous discontinuities in the sports world: the Fosbury Flop. The high jump sounds like the epitome of a stable competitive market without any fundamental scope for change. After all, the most important factor—the force of gravity—can be relied upon to be constant. Nevertheless, the jump technique evolved over time, primarily because of the one other significant factor: the drop zone.
Competitors originally landed on a relatively hard surface, and aimed to land on their feet to prevent injury.The latter half of the 20th century saw an improvement in the quality of the landing zone, starting with a rather clumsy heap of mattress leftovers and ending with a nice, comfortable foam mattress, more than a yard high and neatly encased in a bluebag.
High-jump technique evolved along with the landing zone from feet first to straddle to scissors to belly roll. Then, however, there was a pause of more than 10 years until Dick Fosbury won gold at the 1968 Olympics in Mexico City using a technique that was dubbed the Fosbury Flop—and now is used by everybody doing the high jump—in which the athlete goes over the bar head first and lands on his or her shoulders.
Blue Bag Opportunities become all the more important in a world where change is pervasive in virtually all dimensions of competition. Regular brainstorming for alternative ways of doing things and scanning significant changes in environmental conditions is one way of ensuring ongoing competitiveness or even all-out leadership for sometime.
To start theprocess of reflection in any organization, put a few people from different departments together for two hours and ask them: “What in our environment has changed that maybe relevant for our organization?” They should systematically scan the various categories: consumer/client behavior, geographical markets, design, production and distribution technology, cost of materials, and so on. Eliminate all constraints and allow for extremes. Most great innovations come from creative people thinking the unthinkable.
- Most creative business propositions come from interpreting external changes relevant to the productor service.
- At any point in time, there are several external changes staring management in the face—either in terms of market opportunity or product/service delivery that offer opportunities for significant competitive performance enhancement.
- Regular scanning of outside events and brainstorming of totally new approaches are a prerequisite for maintaining competitive leadership.
Case: Rushing Up Mount Everest
Everest expeditions typically have consisted of a climbing team of about 5 to 10 summiteers and dozens of Sherpa porters.The porters’ task is to help the team to establish and stock the base camp and ascent camps, up to camp number 6 or 7, from which the final assault on the summit starts.
The planning, altitude acclimatization, and execution of the summit attempt consumes several hundreds of thousands of dollars and takes about six months to complete. In the late 1970s, Reinhold Messner and Peter Habler decided to attempt toreach the summit using the Direct Alpine approach, consisting of a base camp, rapid ascent to a bivouac close to the summit, and ascent to the peak on the next day.
The Total Production Time (TPT) of the attempt went from months to a couple of weeks.Their superb physical condition; the short time spent in the “death zone” above 8,000 meters; and their eschewing of oxygen equipment enabled them to climb to the summit in two to three days.
Their TPT reduction to create a new supply chain removed all except base camp stocks, drastically reduced the need for Sherpas and their food and supplies, and eliminated the cost of oxygen equipment and gas. As aresult, expedition supply chain costs shrank by over 90 percent! And they did survive.
Excerpt from Chapter 3 from “Management Made Simple. Ideas of a Former McKinsey Partner” by Mickey Huibregtsen. For more information, visit: https://www.amazon.com/Management-Made-Simple-McKinsey-Partner-ebook/dp/B07HMZL354
Mickey Huibregtsen worked for a major part of his career with McKinsey & Company. While he continues to be involved as a member of the McKinsey Advisory Council, he has redirected his efforts toward a variety of social initiatives. Born in Rotterdam, Huibregtsen studied in Leiden and Delft, where he obtained engineering degrees cum laude in theoretical and technical mechanics. Prior to joining McKinsey & Company in 1970, he worked several years for Stork, a diversified engineering company, and ultimately as general manager of its Gas Turbine Division. With McKinsey & Company, Huibregtsen has served a large and diverse number of leading international organizations, both in the private and government sector. His work covered the full range of strategic, operational, and organizational issues. In addition to his work in the Benelux, he has served industrial corporations and government organizations in France, Germany, Scandinavia, Turkey, the United Kingdom, and the United States. Amidst a diverse range of community activities, Huibregtsen was a board member of international business school INSEAD; founder and president of personal training company Topshape; and founder and president of The Public Cause, a broad movement in the Netherlands directed at reenergizing society and revamping the political system. He recently initiated a movement called MaatschapWij (SocieWe) directed at rebuilding and reenergizing the main actors in society—government, citizens and organizations—bringing together the five largest national sporting federations, the five largest societal organizations—such as the Dutch equivalents of triple A, Consumers Union, and the Red Cross—and five large corporations, as well as a National Dotank of young professionals to help spread the mindset of a civil society to which all contribute.