Friday 29 Mar 2024
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This article first appeared in Forum, The Edge Malaysia Weekly, on September 5 - September 11, 2016.

 

Today, Malaysia is ablaze with the National Blue Ocean Strategy (NBOS). The NBOS received extensive coverage following an international symposium that was held from Aug 16 to 18. The conference also provided some encouraging evidence of how the government was using the strategy.

The Blue Ocean Strategy (BOS) was proposed more than a decade ago and it was then thought to be a clever way to look at strategic management decisions. The BOS is based on the premise that the best strategy is one that avoids getting caught in the fray of the masses. Instead, one is to look for areas where competition had not built up. It is always best to be ahead of the pack, to distinguish oneself, to stand out in a crowd.

The best approach, so the BOS goes, is to draw on untapped demand, to place oneself where there is no competition, to be the uncontested lord of the fiefdom.

How does one do that? BOS experts give us a few magical keys to open the doors to infinite wealth and success. These include looking at the big picture, redefining the market, going beyond the present delineation of the market.

And most important of all, creating value and innovating. But none of this is new.

In fact, C K Prahalad’s The Fortune at the Bottom of the Pyramid, which was published in 1998, takes a somewhat similar tack in that it proposes looking at untapped demand, venturing where no one else has, going low cost and getting the big picture right. However, it is not packaged in quite the way that BOS is. Prahalad directed his lens at the poor and the underprivileged, concentrating on the marginalised markets in developing countries. This must have hampered the reach that his ideas could have otherwise had.

A more fundamental approach could be created using economist Amartya Sen’s capability method. This has been used in developing the Human Development Index, a measure used by the United Nations Development Project to assess a country’s development and capabilities.

Sen did not propose a particular, generic list of capabilities but rather thought that any list that is favoured should be context-specific. He was, of course, thinking of countries, not companies.

But I think Sen’s approach can be applied to companies. It would be a framework that is solidly based on strong philosophical and economic reasoning rather than woolly metaphors.

The government takes pride in having set up the Urban Transformation Centre (UTC), which is cited as an example of how the BOS was effectively applied to improving Malaysians’ well-being. One could arrive at the UTC, or some such idea, if one tried to improve people’s capability to participate in society or the bureaucratic process.

Martha Nussbaum, a philosopher who teaches at the University of Chicago, and a scholar who has written on Sen’s framework, offers a wide list of capabilities that are worth securing. She includes things such as being able to live long, live a healthy life, laugh, have good relationships and so on.

Sen’s capability approach is broad enough to be expanded and to include other capabilities, such as the ability to be creative, imaginative and empowered, and to live a life that is deemed worthwhile.

He is not a management consultant. He did not frame his approach in the trendy fashion that the likes of Alvin Toffler and Kenichi Ohmae have done. But his framework has the bandwidth to encompass all that would go towards improving the quality of one’s life.

When I wrote the book, Sen’s Capability Approach and Institutions, I did not quite realise the flexibility of his thinking. Sen’s strength lies in being able to attend to foundational issues. That is something that needs mending in Malaysia.

It is good to venture into uncharted waters, as proposed by the BOS. But before one does that, one has to be well equipped. We need good and accessible education and healthcare, a sense of security and other fundamental capabilities that would form the basis to flourish. The BOS lacks this perspective.

We cannot afford to delude ourselves into thinking that we can be creative and innovative when the building blocks are not in place.

We need to have the right foundation but we cannot stop there. We need more — creativity, value, innovation. Only then will we have what I would like to call “the capable economy”.

It is only the capable economy that can take us into 2030 and beyond. Otherwise, we will be paddling in the oceans — blue, red, green, pink or purple.

 

Dr Shankaran Nambiar is a senior research fellow at the Malaysian Institute of Economic Research. The views expressed in this article are his own.

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