Founder and Chief Executive Officer of Magna
Last year I was interviewing a prospective CEO for one of our companies. At the end of the meeting, he recommended Blue Ocean Strategy to me. I had never heard of it, and I was surprised to find out that it had already been around for ten years. How did I miss this? I decided to take the book with me during my vacation. Those days that I spent reading were eye-opening, gratifying and exciting. I finished the book in 3 days. Never before had I come across a business ideology that so closely mirrored the way we build companies and invest at Magna.
I was surprised to find that we have subconsciously been following many of the teachings outlined in the book. But I had never known that there was an actual compilation of these ideas and theories into such a succinct, understandable model for continuous growth and success.
I’d never recommended a book to any of my team before; however, after only being about halfway through this one, I mandated it as a must-read for our senior leadership across our companies.
I started out in my bedroom six years ago. I was 22 years old and had very little money, but I wanted to invest it into something meaningful that could make a difference. So I started investing and lending to small public companies. This became Magna Equities, our first business. We experienced rapid success, so then we started looking into creating other companies. Now we are a holding company, structured in a similar way as the Virgin Group. We create companies, and we invest in existing companies. And we are committed to creating blue oceans with all of them.
Recruiters, in general, swim in very red oceans. At Mainz – our recently founded recruitment agency – we do things differently. By striving for value-innovation we came up with an offering called “Recruitment as a Service,” (RaaS). Our service is 50% cheaper than other offerings and we deliver in about half the time! So far we have a 100% success rate.
Blue ocean strategy has so many tools and frameworks that we want to explore further. In one of our businesses in the music industry, PledgeMusic, we are currently applying the concept of noncustomers. By spending more time focusing on the noncustomers of PledgeMusic, we’re beginning to understand how we can further strategically shape our expanding blue ocean to capture and engage those people.
I also loved the NYPD example in the book. It was a real eye-opener. Across all of our businesses, we are striving to implement Tipping Point Leadership and Fair Process. By getting all our employees and management aligned and engaged, we are setting ourselves up for success in the future.
Our latest and most challenging project is Sason builders. The construction industry is probably the biggest red ocean out there. There are so many players and they all compete on price. But the good thing is that I found that the redder the ocean, the better the opportunity to stand out. When the industry is so red, so saturated, I find it easier to stand out as blue.
With Sason builders, we are applying the Emotional vs. Functional path. Construction is the most functional thing you can think of, so companies naturally compete on price. But we don’t think that’s the right approach. At the end of the day, we are building someone’s home. It’s where they will probably live for the rest of their life; maybe raise kids; develop memories, grow old. It’s the biggest investment most people will ever make, and it’s also a very emotional decision. With the help of blue ocean strategy, we are now figuring out what it really means to build a home, not just a house.
It’s an exciting journey, and we know that blue ocean strategy is helping us to complete it with impact.
Find out more about Magna at magnainvests.com .