Fishing for a circus strategy

“The show must go on”, is a very common phrase in a show or performance. It means that the audience has to be kept entertained at all times. But, it doesn’t say what happens when the show gets old? How does a show performance keep selling tickets after repetitive shows and apply this phrase? But most importantly, how does the same performance creates new value for the same audience? In other words, no one wants to go to the circus twice to see the same show.

A circus for instance, would quickly run out of business if it the shows were constantly changing to keep spectators coming back. Renovation, show quality and improvisation could very well be a good description the main elements of circuses strategy. Their main objective it’s to give the audience value. Generate a positive emotional experience that is never to be forgotten, make them come back again and again. This is why the circuses still survive nowadays.

Interesting enough, a good circus show is known to be full of interactions. Animals, jugglers, clowns all have instant communication with the spectator which allows them to read the crowds’ energy. The instantaneous feedback from the crowd also makes them decide the turn of the show or improvise if necessary to favor the crow’s emotion to provide a better value. In the business world this is call co-creation.

Nowadays, a business also needs to interact with the public to be able to create positive emotional experience successful and quickly adapt before tomorrow’s show. The future of competition through co-creation gives us good examples of how business can relate to this co-creation faces. The authors point out how business can bury old business models in order to migrate to co-creation and generate value with for the “spectator”. The book makes it possible for us to recognize good examples in co-creation in through out it’s description in the study cases; ironically so many cases also create repetition after a few chapters.

Cirque du Soleil, the classic example from “Blue Ocean Strategy”, book by  Chan Kim and Renee Mauborgne, eliminated the outdated standards that were taken for granted for decades and co-created the new ones where they increased value for their target market while lowering their own costs.

Cirque du Soleil’s roots in street performance are a sign of open-minded risk takers that were considered marginal to society. Yet they displayed a tough business sense by creating this blue ocean of theirs. From taking risks and learning from mistakes, companies can learn to create greater credibility over the long term.

At Cirque du Soleil, the working environment is conducive to productivity, creativity and personal growth, considering that it is difficult to be creative in isolation. While Cirque du Soleil expects collaborative creativity, all team members need to be aware that the ultimate goal is the product –it’s  all about the show.

It is common knowledge that designers don’t like budget, deadlines or limited resources. These limits force to produce solutions that might not have been thought of before. By developing new creative products, Cirque du Soleil keeps the product fresh. That helps ensure that the product maintains durability and longevity.

Let’s try to extend  Cirque du Soleil’s example to the main ideas of Fast Strategy book written by Yves Doz and Mikko Kosonen in 2008. Though, the Fast Strategy book’s examples focus mainly on large IT, telecommunication businesses, the ideas presented in the book are very much applicable to other businesses as well. One practical issue with any change is in its implementation. Cirque du Soleil would have not succeeded without implementing the new innovations quickly.

Cirque du Soleil already found that it is in red ocean and it has to quickly find a blue ocean for itself, therefore, it already fulfilled the first requirement of Strategic Agility by being Sensitive towards its environment. It knew, it just could not beat the stagnation by improving operational efficiency.

The two other ideas – Collective Commitment, and Resource Fluidity the book puts forward may not be applicable when Cirque du Soleil was a typical circus business, but are applicable now as it has grown big enough. Big companies need to have Collective Commitment in order to successfully implement the change. The traditional (Top – Down) management does not always work as all the stakeholders, especially top managers from various functions, should collectively be committed in order to effectively implement the change or even to experiment with the change without the fear of failure. The main drivers for collective commitment are – more incentive weightage on global P/L for the top managers instead of their unit’s P/L targets, distributed leadership roles, transparent goals and fair processes, overlapping areas of expertise, informal dialogues, and role of the CEO.

The people at Cirque du Soleil need to have multiple skills which is in line with the third idea – Resource Fluidity, the book put forwards. Cirque du soleil already has a strong change process to maintain the fluidity of its resources. (Source: http://www.ft.com/cms/s/0/4191c332-500a-11e0-9ad1-00144feab49a.html#axzz28MKtpRDD)

If we implement circus theme in to SME’s business models it would mean that one area of expertise like trapeze artist represent one company. Along with the other act they provide focused services to the whole circus and its audience. They have to cooperate with others, be constantly evolving and maintain agility in variable customer needs order to manage to provide coherent show to the customers. By opening up their business models, co-creative  and act in transparent way SME’s will then gain profit and be compatible with other service providers from small to large companies. Benefits that SME’s have are their competence in competing against big firms. And their potential to become next successful circus act is only growing. When referring to Henry Chesbrough’s book about Open services innovation SME’s are growing importance for an economy’s innovative capacity. They have invested even more into their R&D development than large size companies. They have the foresight role when developing new ideas into the business plans and implementing them into usable service.

To learn and understand more of co-creation and open innovation from SMEs perspective, Henry Chesbrough (Open services innovation – Rethinking your business to grow and compete in a new era), offers a wide range of examples of how to implement and use open innovation in your business.

Book references:
The future of competition: Co-creating a new value for customers – C.K. Prahalad, Venkat Ramaswamy, 2004
Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant – Chan Kim and Renee Mauborgne 2009.
Fast Strategy book – Yves Doz and Mikko Kosonen 2008.
Open services innovation: Rethinking your business to grow and compete in a new era – Henry Chesbrough 2010.

Post authors:

Annaliisa Salmelin, Hugo Molina, Manish Pratap Singh, Tatjana Odigbo