Blue Ocean Strategy And Coaching

Through intuition, trial and error or just plain luck, people stumble on strategies that have a proven track record of success. An amazing strategy for creating new markets through value innovation has been dubbed the blue ocean strategy after a book by that name. Although not likely intentional, this was the strategy that started the coaching profession.

Thomas J. Leonard, a former financial planner, is considered by many to be the father of coaching. Leonard founded Coach U in 1992, the International Coach Federation in 1994 and was the founder and CEO of CoachVille. Leonard can certainly be credited as the person who pioneered packaging and popularizing the coaching profession. He opened the door for thousands of individuals to earn a living as professional coaches.

In a 2003 article in Fortune Small Business, Joshua Hyatt describes his interview with Thomas J. Leonard:

http://money.cnn.com/magazines/fsb/fsb_archive/2003/05/01/343394/index.htm/

By now, because of Leonard's exhaustive efforts, no one needs a definition of what a business coach is. That's mainly because most of us have given up trying to figure it out. Think of it this way: Coaches are like motivational speakers, except that they listen instead of talking. Is it possible to turn to someone else for self-help? If it is, that's another way to define what these sounding boards do. They offer support and guidance, serving as friends for CEOs who deservedly have none.

Several of Leonard’s colleagues had this to say:

"Thomas turned coaching into a viable business," says Jeff Raim, a 48-year-old coach based in Angel Fire, N.M.

Typically, coaches encourage their clients to scour their inner selves and "be the source of their own answers," as Dan Kennedy puts it
...

"Coaching draws from people some clarity about what needs to be done and how best to make that happen," says Kennedy. "There are people who would really rather be told what to do. Coaching is not for them."

A coach serves a distinctly different role from other professions that offer, what initially appear to be, similar services. Stephen G. Fairley and Chris E. Stout in their book “Getting Started in Personal and Executive Coaching” use the following graph to illustrate what they believe to be the key differences between a coach and roles such as friend, facilitator, mentor, trainer, manager, consultant and therapist.



Fairley and Stout believe there are two key dimensions that distinguish these roles: 1) who is considered the expert, whether that is the client or the professional and 2) what the professional actually does, whether it be predominantly asking questions or providing answers.

Coaching occupies a unique position in this matrix. Both coaches and therapists ask more questions than they provide answers, but they serve different people with different challenges. Therapists typically serve people in need of healing who have psychological or personality issues. Coaches generally deal with healthy people who are interested in performing at a higher level.

Coaches also differ from the numerous roles that offer expert advice in one form or another. A fundamental assumption of coaching is that the client is creative, resourceful and whole and is the expert in their life and consequently, should set the agenda. The coach and client are generally thought of as collaborators creating an alliance between two equals. The role of the coach is to encourage/support people on the path to making important decisions and empower them to find their own answers for achieving their goals. Consultants and the other roles in the lower right quadrant are hired for their expertise and their ability to provide answers to specific problems.

People generally choose coaches if they are stuck in a rut, want to affect change in their business but are experiencing difficulty or have important goals they want to achieve that are currently out of reach. Until the coaching profession was started, this was a market not being adequately serviced by other providers.

In the Fortune Small Business article, Joshua Hyatt states:

Unlike most entrepreneurs, he didn't spot a gap in the world around him and then set out to fill it. Instead, he found a business by looking inside himself. Leonard, who seemed to have a heightened awareness of his own demons, created the tool that he needed. "You often learn to teach what you most need to know," observes Raim.

From Hyatt’s interview with Leonard, it appears there was no deliberate strategy. Nevertheless, the steps that Leonard took parallel the initial implementation of a blue ocean strategy. That is not surprising since people rediscover tried and true strategies all the time. What is a blue ocean strategy anyway?

Most companies try to outperform their rivals through incremental changes in price or quality - assessing what their competitors do and striving to do the same things better. Cost and value are seen as trade-offs. As the market space becomes more crowded, supply overtakes demand causing products and services to become commoditized, encouraging price wars and rapid feature duplication among rivals. Grabbing a bigger share of the market becomes a zero-sum game and profits gradually diminish across the entire industry. The airline industry was a perfect example of this where price wars resulted in numerous bankruptcies and almost non-existent profit margins.



Markets that are well explored and already crowded with competitors are called "red oceans". They are called red because the only way to increase profits is by taking away market share from the competition. This usually results in bloody battles where few companies emerge unscathed. However, since the dominant focus of strategy research has been on competition-based red ocean strategies, this is not uncommon or unexpected.

"Blue oceans" on the other hand represent uncontested market space - pools of demand and customers that have not been reached by any competitor. Blue oceans have always been around. Just look back a few decades, and you will find that many industries we now take for granted – such as mobile communications or biotechnology – that simply didn't exist. Technological advances represent one reason blue oceans are developed, but another one is creative thinking that discards conventional wisdom and current product/service design.

Blue ocean strategy was made famous with the following book:

Blue Ocean Strategy
W. Chan Kim and Renee Mauborgne
Harvard Business School Press



These two authors studied 150 strategic moves representing over thirty industries and spanning a timeframe of more than 100 years to discern how these companies became successful through value innovation. The authors uncovered common factors leading to the creation of blue oceans and the key differences separating winners from mere survivors.

So why is this important aside from the historical curiosity regarding Thomas J. Leonard stumbling onto a blue ocean strategy for developing the coaching profession? The coaching profession has proved to be a very challenging business with a significant number of coaches earning less than they desire despite considerable effort. While Leonard’s work represents an outstanding beginning to the implementation of a blue ocean strategy, it falls short on several key issues. The Strategy For Coaches webcast in May 2010 will provide a detailed examination of the blue ocean strategy and how a more complete implementation of the strategy could make the coaching profession far more lucrative for the coaches while providing clients with an even better value proposition. This is one webcast you don’t want to miss.

A presentation of this post can be found on our YouTube channel:
http://www.youtube.com/watch?v=eyNDjPGzFXo

Systems Thinking Applied To The Blame Game

A common situation that occurs in business and personal life is the blame game. Something goes wrong and we naturally start looking for who is at fault. Blame usually leads to punishment of the offender. To the casual observer, it appears that the problem has been identified along with the appropriate solution.

W. Edwards Deming, a pioneer in quality control, management and systems thinking, found that 93% of the time, problems in organizations can be traced to the design of systems, structures and processes. Only 7% of the time did people cause the problems and in about half of those cases, the issue could be rectified with additional training.

Much of what we identify as problems are really indicators or symptoms. They are the resultant effects of underlying causes. H. William Dettmer on root causes remarked: "Treating an undesirable effect alone is like putting a bandage on an infected wound: It does nothing about the underlying infection, so its remedial benefit is only temporary. Eventually the indicator resurfaces, because the underlying problem causing the indicator never really went away. Eliminating undesirable effects gives a false sense of security. Identifying and eliminating a critical root cause not only eliminates all of the undesirable effects that issue from it, but also prevents them from returning."

The blame game is so common, that it is unlikely a coach hasn’t run into it with a client at some point in their practice, regardless of the coaching specialty. So if the blame game is often unproductive, why do so many people engage in it? People engage in this behavior because it offers benefits – it provides a scapegoat, a quick fix and a deflection of responsibility. The blame game fits a common pattern seen over and over again called "Shifting The Burden".

In our inaugural webcast, we introduced systems thinking. A system is just an interdependent group of items forming a unified pattern. Basically, systems thinking involves seeing overall structures, patterns and cycles in systems, rather than only specific events. This broad view can help you to quickly identify the real causes of issues and know just where to work to address them. The internal structure of a system is generally more important than the events that generate the issue. An event orientation rarely gets you to the root cause of a problem. You generally find that one event is caused by another event, which is yet caused by another event and so forth.

A more productive approach is to look for patterns of behavior that characterize a particular situation. Amazingly, similar patterns of behavior show up in a variety of different situations and the underlying structures that cause these patterns are well known. These patterns of behavior are generally referred to as archetypes.

A “Shifting The Burden” archetype usually begins with a problem indicator that prompts someone to apply a "solution". The "solution" appears obvious and tends to relieve the problem indicator quickly, but in reality, just diverts attention away from the root cause of the problem. We can represent a "Shifting The Burden" archetype with the following diagram:



The diagram contains two loops – called balancing loops. In our inaugural webcast, we defined a balancing loop as any attempt to move some current state (the way things are) to some desired state (goal or objective) though some action (whatever is done to reach the goal). In a "Shifting The Burden" situation, the two balancing loops representing a different type of "fix" for the problem indicator. The upper loop represents a symptomatic "quick fix" and the bottom loop represents measures that take longer, may be more difficult, but ultimately address the root cause of the problem. The double line in the arc on the lower left represents a possible delay in seeing the result of the action taken.

The blame game is an example of a "Shifting The Burden" archetype. You experience a problem and search for the person to blame. Blame is the quick fix that diverts your attention away from long-term interpersonal or structural solutions. Blame provides some immediate relief and a sense of doing something; it can make us feel powerful and can keep us from examining our own role in a situation. Unfortunately, blame has undesirable side effects such as eroding communication, generating fear and destroying trust. In the long term, this reduces the flow of information about the current reality and hinders actual problem solving actions, which lead to more errors, which perpetuates the blame game.

What are the recommended responses for dealing with a "Shifting The Burden" archetype? There are three:

• Look for unintended consequences for actions thought to relieve problem symptoms.
• Look for the root causes that are really responsible for the issue.
• Take actions to resolve BOTH immediate pain (if appropriate) AND long-term root causes.

Let’s apply these recommendations to the blame game. The focus of blame is generally on the individual with punishment the usual intent and with the unintended consequence being cover-up, increased fear and reduced trust. A better response is accountability. Blame and accountability are vastly different. Blame means to find fault with whereas accountability means to be counted on. Accountability emphasizes keeping agreements and performing tasks as required. The focus of accountability is generally on the problem and not the person. The intent of accountability is generally performance and not punishment. When done right, accountability helps people become aware of their own mistakes and shortcomings so they can take ownership of them and use them as opportunities for learning and growth.

However, it is difficult to be accountable for something over which you have no control. Accountability is a contract to achieve measurable results, but an individual cannot keep their promise if circumstances beyond their control change. Consequently, holding people accountable must be done in the context of clearly defined outcomes adjusted regularly to reflect changing realities. When desired results are not achieved, one must concentrate on uncovering the root causes that are really responsible for the issue.

Comprehensive systems analysis is what is needed and that is a topic deserving of it’s own presentation. Briefly, systems analysis is an explicit formal inquiry carried out to help a decision-maker identify the appropriate course of action. It comprises both analysis and synthesis – breaking down a system to see its component parts and assembling the system to see how the parts interact and inter-relate. Systems analysis tells us why a process fails to achieve its intended objectives or produces a surprising result. Without addressing root causes, problems always recur. Systems analysis strives to uncover the root causes.

The hallmark of a systems problem is when you encounter a situation where continually replacing a position with different people results in the same behavior and failure to achieve the objectives desired. One should conclude that it is not a matter of finding the "right" person for the job, because the person is likely not the issue. A simpler way to look at this is to try and discern the forces that are acting on a person in a particular situation. How would a typical person respond under these conditions? If the expected response is not the desired response, you are now getting closer to uncovering the information you need to make the necessary adjustments.

This discussion is not meant to imply that all problems are system problems or that blame has no role to play in good management or everyday life. By understanding the difference between blame and accountability and understanding how the structure of a system can encourage undesired behaviors and interfere with achieving the outcomes sought, responses to issues can be much more nuanced and tailored to both the situation at hand and the needs of the individuals involved.

A presentation of this post can be found on our YouTube channel:
http://www.youtube.com/watch?v=g4ufWZvn64M

How Will Globalization Affect Coaching?

Wikipedia defines globalization as: "a complex series of economic, social, technological, cultural and political changes seen as increasing interdependence, integration and interaction between people and companies in disparate locations."

The primary objective of CEOs is to maximize profits to their shareholders, and as a consequence, CEOs are always looking to rein in labor costs and the escalating cost of benefits such as healthcare. CEO's are interested in finding productive labor wherever it might be as shown by their significant investments in countries like India, China and the Philippines.

Outsourcing is one facet of globalization. Outsourcing is fueled not only by the drive to increase profits, but it is also fueled by the consumer-driven passion for affordable prices. Destination countries benefit by developing a globalized economy based on highly sought-after skills and delivering services using the internet.

The inaugural webcast has a scenario of coaching being outsourced to India. It does appear that white collar skilled labor is being outsourced right now. A stunning example is the outsourcing of lawyers. Most lawyers thought this would never happen because laws vary considerably by locale so law was thought to be a local profession and immune to globalization. That is not the case:

http://www.washingtonpost.com/wp-dyn/content/article/2008/05/10/AR2008051002355.html

When Aashish Sharma graduated from law school two years ago, his father had visions of seeing him argue in an Indian court and eventually become an honorable judge.

Instead, Sharma, 25, now sits all day in front of a computer in a plush, air-conditioned suburban office doing litigation research and drafting legal contracts for U.S. companies and law firms. He is part of a booming new outsourcing industry in India that employs thousands of English-speaking lawyers such as him to do legal work at a small fraction of the cost of hiring American lawyers.

...

"Ninety percent of a lawyer's work is legal research and drafting, and all this can now be offshored to India," said Russell Smith, who worked in a Manhattan law firm called SmithDehn before moving to India to set up an outsourcing company in 2006. "A large portion of our fees in the U.S. is because of office rent. It is often a big decision to hire one attorney in the U.S. In India, we can hire 10 at a time and train them all at once."

This example has shown that globalization can affect white-collar professions, previously thought immune to foreign competition, in the same way that the manufacturing jobs have been affected for years.

The inaugural webcast uses a scenario planning exercise to explore how globalization could affect coaching. This is clearly an issue that should be front and center in the minds of most coaches.