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Case Study

Malaysia’s Blue Ocean Journey: A

Decade of Value Innovation
Authors: Serena George and Matin Ling; Directors of Value
Innovation at Blue Ocean Consulting™

Over a week of numerous events and exhibitions in August 2016, Malaysia hosted not
only the 6th Commonwealth Public Service Ministers Meeting on Governance for
Sustainable Development but also the Commonwealth Association for Public
Administration & Management (CAPAM) Biennial Conference with the theme
‘Innovation: A Public Service Imperative’1. Attendees included heads of state,
ministers, civil service leaders and representatives from the United Nations, the
Organization of Islamic Cooperation, the Association of Southeast Asian Nations and
member countries of CAPAM.

In the midst of the intensively packed schedule, these leaders together with 5,500
members of the public, made their way towards Malaysia’s federal administrative
center, Putrajaya, to attend the International Conference on Blue Ocean Strategy
(ICBOS). The theme of this conference was “Transforming Nations through Creativity
and Innovation” and set the stage for Malaysia to highlight its own successes in
applying the concepts of blue ocean strategy by injecting creativity and innovation
into the very heart of its national development strategy, specifically in its efforts
towards achieving a high-income status.

Malaysia’s blue ocean success can be attributed to a combination of resolute

determination from its leaders and the willingness of its people to come together to
support a transformation journey that required a collective shift in perspective at the
national level. While neighboring countries such as Singapore, South Korea and
Taiwan had made the jump to become highincome nations by the early 2000s,
Malaysia was still caught in the middle-income trap; facing differentiation challenges
from developed nations and regions like the United States, Europe, and Japan which
offered high-quality products and services, and the threat of low-cost manufacturing
and labor from emerging economies like China, India, Vietnam, and Indonesia.

While it seemed impossible to escape from such a middle-income trap2, Malaysia’s

leaders turned to blue ocean strategy and its creative thinking process in an effort to
achieving greater public well-being and higher national incomes. This began in 2006
when Malaysia began to explore the possible ways of applying blue ocean strategy to
stimulate economic development. The government invited Professors W. Chan Kim
and Renée Mauborgne, Professors of Strategy at INSEAD and co-directors of the
INSEAD Blue Ocean Strategy Institute, Thinkers50 #1 Management Thinkers, Fellows
of the World Economic Forum, and authors of Blue Ocean Strategy: How to Create
Uncontested Market Space and Make The Competition Irrelevant (2005/2015)3 and
Blue Ocean Shift: Beyond Competing – Proven Steps to Inspire Confidence and Seize
New Growth (2017)4 to engage in several rounds of exploratory discussions with
different interest groups. These ranged from informal small group sessions to a
three-day retreat with national leaders from the public and private sectors, and even
an official cabinet meeting chaired by the prime minister. After two years of
discussions and debate among the various stakeholders, the Malaysia government
committed to applying the theories of blue ocean strategy and formally began the
journey to spark the collective transformation in the nation’s economic and social
sectors.

To enable this, the government launched the National Blue Ocean Strategy (NBOS) in
2008, an ongoing monthly meeting of Malaysia’s top national leaders, its highest-
ranking civil servants, those from the nation’s security forces, and selected leaders
from the private sector. With the support of the advisory team from Malaysia Blue
Ocean Strategy Institute (MBOSI), the blue ocean strategy concepts and process
were applied and executed in response to existing public policy challenges during
these summits.

By early 2013 the NBOS had launched more than 50 economic and social blue ocean
strategy initiatives. The intended outcomes for these initiatives were guided by three
principles; to achieve high impact, at a low cost and to be rapidly executed. The goal
was to deliver a leap in value to the country’s economy and society while also
reducing the cost of providing government services, thereby improving savings and
substantially increasing the speed of execution. In fact, these principles provided the
underlying framework for the Eleventh Malaysia Plan aimed at Anchoring Growth on
People, 2016-2020.

Following the successful outcomes of these initiatives and the rapid expansion of
their scale and scope, the government established the National Strategy Unit under
the Ministry of Finance to coordinate strategy formulation and execution across
ministries at the national level. With their support, the number of blue ocean
initiatives launched at the national level surpassed 100 by 2017. NBOS had changed
the way people worked together to create game-changing initiatives and also helped
them to reimagine their role and contribution to the nation in a positive way. By 2009,
the pivotal role of NBOS in Malaysia’s National Transformation Journey had
successfully contributed to the country’s growth in national incomes – increasing by
nearly 50% and adding over 2 million jobs.5

In 2016, as part of the initiative to further unleash the creative potential among civil
servants and upgrade their skills, the Malaysia government launched the Blue Ocean
Strategy Online Training6. The training was delivered in order to ensure high
performance delivery within the public sector by enhancing their capacity to embrace
an entrepreneurial and innovative mindset.

The Blue Ocean Strategy Online Training (BOSOT)was a multi-ministries and states-
driven initiative executed with the assistance of the National Institute of Public
Administration (INTAN) and facilitated by the advisory team from MBOSI. The online
training comprised of self-directed modules and team assignments that were
conducted in a blended online and offline approach, and which guided participants
towards exploring and unlocking their creative thinking skills. The BOSOT
certification became a pre-requisite for all civil servants’ advancement in their
careers and so within a year, over 250,000 civil servants were trained in the concepts
and methodologies of blue ocean strategy.

Following the strong successes of NBOS, sustained interest from other governments,
especially those in the emerging and developing economies, prompted the Malaysian
government to organize the International Conference on Blue Ocean Strategy
(ICBOS) to coincide it with the 6th CAPAM Biennial Conference.

The conference featured exhibitions on the various NBOS initiatives implemented

over the years and culminated with an opportunity to visit one of the sites on the last
day of the conference, in order to experience firsthand how the NBOS initiative
worked. The highlight of the field visit was to the Community Rehabilitation Program
(CRP) centers. CRP offered a solution to overcrowding that could be delivered quickly
and which was 85% cheaper to build and 58% cheaper to run7. The centers made use
of idle military bases to house low risk offenders and ensured that these offenders
would be separated from, and not influenced by, hardened criminals. This approach
was a first in the world and dramatically reduced the recidivism rate of prisoners to
just 0.5%8.

In the conference’s closing remarks, Malaysia’s leaders emphasized that while the
NBOS initiatives were not easy to implement due to the huge shift in thinking
required, the outcomes were extremely rewarding. To conclude the conference, the
Deputy Prime Minister noted,

“Throughout our NBOS journey, we have been

creating new ways to serve people better and
deliver on the things that really matter to them.
NBOS has been transforming the entire nation.
Blue oceans ahead!”

1. http://mrem.bernama.com/nbos/updates/[1]%20NBOS%20INTERNATIONAL%20WEEK.pdf

2. https://www.lse.ac.uk/iga/initiatives/middle-income-trap

3. Blue Ocean Strategy has been published in 46 languages and has hit more than 300 bestseller lists across the globe. Blue Oce

an Strategy has received numerous distinguished awards from the Nobels Colloquia Prize for Leadership on Business and Eco

nomic Thinking to Fast Company’s Hall of Fame. The Financial Times called it “one of the bestselling business books of the cen

tury”.

4. Blue Ocean Shift is the New York Times, #1 Wall Street Journal, USA Today, and Los Angeles Times Bestseller and has been pu

blished in over 30 languages. It is also the winner of the “Best Strategy and Leadership book 2017” by 800-CEO-READ, “Best Bu

siness and Leadership Books of 2017” by Amazon, with Apple iBooks calling it “one of the biggest books of the year”.

5. W.Chan Kim & Renée Mauborgne, Blue Ocean Shift; Beyond Competing - Proven Steps to Inspire Confidence and Seize New Gr

owth, New York, Hachette Books 2017, p.289

6. Institut Tadbiran Awam Negara (INTAN) & Jabatan Perkhidmatan Awam (JPA), Blue Ocean Strategy Online Training (BOS Onlin

e) in the Public Service, 2016-2017

7. Community Rehabilitation Program (CRP): A Government Blue Ocean Shift

8. https://www.nst.com.my/news/2016/12/197741/crp-under-national-blue-ocean-strategy-success-prisoner-recidivism-rate-j

ust-05

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