The Theory of Blue Ocean Leadership

Instructor: Elisha Madison

Elisha is a writer, editor, and aspiring novelist. She has a Master's degree in Ancient Celtic History & Mythology and another Masters in Museum Studies.

Blue Ocean Leadership Theory discusses how management should see their employees as customers to whom they are offering a service of effective leadership.

New Ideas for Business

How can corporations get away from confrontational competition with other businesses and still be successful?

  • One idea is to look for open markets outside the norm.
  • Another idea is to treat your employees as though they were customers buying your leadership.

The first idea aligns with Blue Ocean Strategy, and the second with Blue Ocean Leadership. Let's look at both in more detail.

Blue Ocean Strategy

In 2005, Renee Mauborgne and W. Chan Kim came up with the Blue Ocean Strategy, which tries to find other open markets to sell to, instead of purely focusing on the main market.

The ''Six Paths Framework'' for this process consists of the following practices:

  • Observe other industries outside your regular market
  • Observe competitors within your market
  • Change your customer base by opening your market to unique consumers
  • Redefine and market to this new customer base
  • Determine and change the emotion of your products
  • Involve yourself and influence your industry

This whole strategy essentially advises a company to think in a different way. The theory of Blue Ocean Leadership develops this even further.

Blue Ocean Leadership

The Blue Ocean Leadership Theory attempts to completely revolutionize how a company works by starting from the inside. Instead of just focusing on the sale, it focuses on the people working within, with the idea that if focused on satisfying employees, this will in turn create more sales.

Say you are a manager. Blue Ocean Leadership states that instead of thinking of your employees as just workers, you should consider them customers. You are offering a service of leadership to these employee customers, and, like any other product, they can purchase it or leave it.

'Purchasing' infers that your workers follow you and appreciate your management style; they buy in to your thoughts and ambitions. However, if they are unsatisfied customers of your leadership, then they can offer bad service to market customers, disrupt the workplace, or even leave the company altogether.

Managers with disengaged employees need to adjust their behavior to reach them as customers. This manager is simply adapting to a new market and trying to reach their consumers in the way those consumers need.

The Four Pillars

Blue Ocean Leadership advises four ways to change manager-employee relationships using the ''Four Pillars''. These are:

  1. Focus on Action - The manager needs to change not who they are, but certain actions to work better with their employees.
  2. Collaboration - Management needs to be engaged with their employees and ask them what they need to succeed. Unmet employee expectations can create obstacles and put unnecessary strain on the company. Expectations cannot contradict themselves across the company.
  3. Leadership At All Levels - Companies that have only upper level management tend to be so far removed they are clueless as to their consumers needs. Leaders at multiple levels (like mid level and lower level) are more likely to succeed with employees and consumers.
  4. Reassess Activities and Adapt - Management needs to assess their day-to-day functions and eliminate the ones that don't provide much to the company. Once removed, more action-oriented and employee-focused activities can be added.

How to Use It Effectively

Each pillar has a function in this theory, and can be applied in any environment. Pretend BetterCallPaul is a company with a call center environment. It has large teams, no communication, and a mass of upper level management that is unaware of what their employees or consumers need.

First Pillar Example

To put the theory into practice, BetterCallPaul would first need to look at their leadership and assess behavior with employees. Are they the same? Are they different? If managers do not have the same actions, then employees are going to gravitate to the more effective leaders, which frustrates everyone. So first:

  • BetterCallPaul should make sure every leader uses the same actions with their employees. Their personalities and values can be unique, but how they react and behave with their employees should be the same.

Second Pillar Example

Next, they can assess the expectations of each employee. Do these requirements actually support the BetterCallPaul's goal? What are the expectations the employee has for management - what do they need to succeed?

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