Managing professional services

Blue Ocean Strategy is a popular business strategy book by two INSEAD professors W. Chan Kim and R Mauborgne in 2005. It has gone on to sell over 3.5 million copies. The book, together with their follow-up, Blue Ocean Shift, is designed to help you achieve significant growth in your organisation by finding your 'blue ocean.' The blue ocean is in essence the new market space. A red ocean – the place you want to move from – is the old, heavily competitive one.

W. Chan Kim and R Mauborgne quote an interesting example of a blue ocean shift in a legal firm based in central asia called Centil.  

When legal firms think of growth they often think of adding legal specialisations. Sometimes this comes from the observation that they find themselves referring existing clients to other firms to provide legal services they don't specialise in.

Centil took a very different tack. It significantly reduced its areas of specialisation to just two – very atypical behaviour for a law firm. Next it analysed areas of dissatisfaction for clients or pain points. They actually found that what clients needed wasn't more legal services. What they wanted was a law firm that could provide complementary non-legal analysis.

So, instead of expanding into other legal specialisations, they invited a group of economists and analysts to join the team, establishing an economic and business advisory unit. The unit offers clients market analysis, cost-benefit analysis, policy impact assessment and strategic planning and bridged the knowledge gap that was a pain point for so many clients in the region.

W. Chan Kim and R Mauborgne articulate a growth methodology focused on four steps:

  1. Eliminate
  2. Reduce
  3. Raise
  4. Create.

The law firm Centil applied this approach in the following way:

Change management approach: humanness
According to W. Chan Kim and R Mauborgne, the key to executing your strategy is to focus on the "emotions and psychology of your people, instead of putting most of your energy into manipulating the mechanistic levers of structure, punishments, and rewards. If you can move people by inspiring and building their confidence to own and drive your new strategy, they will be committed to seeing change through and overcoming the organisational constraints you confront." They call the concept humanness.