The Four Actions Framework – For Strategic Project Managers

This post reviews the Four Actions Framework, first providing a simple definition and describing what makes it different and appealing. Then it provides three examples each of public sector and private companies and how they have each uniquely applied the framework. Then it looks at how the framework can be applied in devising strategy, and managing project, programs, and portfolios.

What Is the Four Actions Framework?

Four Actions Framework

The Four Actions Framework, also known as the ERRC framework, is a ‘blue ocean’ strategic management tool introduced in the book “Blue Ocean Strategy” by W. Chan Kim and Renée Mauborgne. It offers a systematic approach for companies to break out of the competitive ‘red ocean’ (where competition is fierce and market space is crowded) and create uncontested market space, known as the ‘blue ocean’.

The Four Actions Framework involves four key questions that challenge conventional strategic thinking:

Reduce – Which factors that the industry takes for granted should be reduced well below the industry’s standard?
Raise – Which factors should be raised well above the industry’s standard?
Eliminate – Which factors that the industry has long competed on should be eliminated?
Create – Which factors should be created that the industry has never offered?

By answering these questions, companies can identify strategic moves to create new value for customers and differentiate themselves from the competition. The framework encourages companies to rethink industry boundaries and focus on innovation rather than competition, ultimately leading to the creation of new market space.

Let’s expand on the approach by looking at three examples each among public sector companies and private companies. It’s helpful to see that the framework applies equally well to each.

3 Examples of the Four Actions Framework – Public Companies

Here are three examples – simply described actions taken for each of the 4 elements – of publicly-traded companies applying the Four Actions Framework in different industries:

Cirque du Soleil (Entertainment Industry):

Reduce – Cirque du Soleil reduced costs associated with traditional circus elements such as animal acts and star performers.
Raise – They raised the level of artistic performances and production values, combining elements of theater, circus, and music to create a unique and high-quality entertainment experience.
Eliminate – Cirque du Soleil eliminated the need for animal acts, which were costly to maintain and sometimes controversial.
Create – They created a new form of entertainment that appealed to a broader audience by focusing on artistic performances, storytelling, and spectacle rather than traditional circus acts.

Southwest Airlines (Airline Industry):

Reduce – Southwest Airlines reduced costs by operating a point-to-point route system instead of the hub-and-spoke model used by many other airlines.
Raise – They raised the level of customer service and efficiency by offering quick turnaround times at the gate and providing a no-frills, low-cost flying experience.
Eliminate – Southwest Airlines eliminated assigned seating and meals, which simplified operations and reduced costs.
Create – They created a new market segment by focusing on short-haul, point-to-point flights, and targeting price-sensitive customers who valued low fares and no-frills service.

Netflix (Streaming Media Industry):

Reduce – Netflix reduced the need for physical rental stores and late fees by transitioning to a subscription-based streaming model.
Raise – They raised the convenience and accessibility of movie and TV show viewing by offering a vast library of content that could be streamed anytime, anywhere.
Eliminate – Netflix eliminated the inconvenience of returning DVDs to rental stores and the limitations of physical inventory by transitioning to a digital streaming platform.
Create – They created personalized recommendation algorithms and original content production, offering subscribers a unique and tailored viewing experience not available through traditional media channels.

3 Examples of the Four Actions Framework – Private Companies

Here are three examples – again with simple explanation of what they did in each of the four action areas – of non-public companies applying the Four Actions Framework:

Patagonia (Outdoor Apparel Industry):

Reduce – Patagonia reduced environmental impact by using sustainable materials and manufacturing processes in its products.
Raise – They raised the level of social responsibility by actively supporting environmental causes and promoting fair labor practices.
Eliminate – Patagonia eliminated traditional advertising methods and instead relied on word-of-mouth marketing and grassroots activism.
Create – They created a loyal customer base by aligning their brand with environmental activism and offering high-quality, eco-friendly products that appealed to environmentally conscious consumers.

SpaceX (Space Transportation Industry):

Reduce – SpaceX reduced the cost of space transportation by developing reusable rocket technology, lowering the overall cost of launching payloads into space.
Raise – They raised the level of innovation and efficiency in the aerospace industry by focusing on rapid prototyping and iterative design processes.
Eliminate – SpaceX eliminated reliance on government contracts as the primary source of revenue by expanding into commercial satellite launches and other space-related services.
Create – They created new opportunities for space exploration and commercialization by developing reusable rockets, reducing the barriers to entry for companies and organizations seeking access to space.

Chobani (Food and Beverage Industry):

Reduce – Chobani reduced the sugar content in its yogurt products, catering to health-conscious consumers seeking lower-sugar options.
Raise – They raised the quality and variety of ingredients used in their yogurt products, focusing on natural and wholesome ingredients without artificial additives.
Eliminate – Chobani eliminated the use of synthetic growth hormones and artificial flavors in its products, emphasizing transparency and simplicity in its ingredient list.
Create – They created a new market segment for Greek yogurt by introducing innovative flavors and packaging designs, appealing to a broader audience beyond traditional yogurt consumers.

Although these are by no means small enterprises, they are independent of the challenges of public markets.

Implications of the Four Actions Framework for Developing Strategy Today

The Four Actions Framework offers several implications for developing strategy in today’s business landscape:

Value Innovation – The framework emphasizes value innovation, which involves simultaneously pursuing differentiation and low cost. Companies must innovate not only to differentiate themselves but also to deliver value to customers at an affordable price point. By challenging industry norms and rethinking value propositions, companies can create new market space and unlock growth opportunities.
Customer-Centricity – The framework underscores the importance of understanding and addressing customer needs and preferences. Companies must especially prioritize customer-centricity with the explosion of data and digitally -driven capabilities. By focusing in and agile manner on what customers truly value and are willing to pay for, companies can drive customer satisfaction, loyalty, and sustainable growth.
Agility and Adaptability – The framework encourages companies to be agile and adaptable in responding to market dynamics and changing customer preferences. Companies need to continuously monitor and adapt their strategies to stay ahead of the competition and seize emerging opportunities. This requires a culture of experimentation, learning, and quick decision-making to navigate evolving market conditions effectively.
Sustainability and Social Responsibility – The framework highlights the potential – realized by Patagonia – of sustainability and social responsibility in strategy development. Consumers expect companies to demonstrate a commitment to environmental stewardship, social impact, and ethical business practices. By integrating sustainability and social responsibility into their strategy, companies can enhance brand reputation, attract socially conscious consumers, and create long-term value for stakeholders.
Collaboration and Partnerships – Collaborating with external partners and stakeholders leads to co-creating value and innovation. Partnerships can provide access to complementary resources, expertise, and distribution channels that enhance competitiveness and accelerate growth. By fostering strategic partnerships and alliances, companies can leverage collective strengths to address complex challenges and capitalize on market opportunities more effectively.

Overall, the framework offers valuable insights and principles for developing strategy by emphasizing value innovation, customer-centricity, agility, sustainability, and collaboration. These are just a few of the key driving principles companies can embrace to achieve differentiation in the marketplace that leads to growth and sustainability.

The Impact of the Four Actions Framework for Managing Projects and Programs Today

The Four Actions Framework can have several implications for managing projects and programs in today’s business environment. In short, it takes ‘blue ocean leadership‘ – to complement blue ocean strategy – which includes the following elements.

Strategic Alignment – The framework emphasizes the importance of aligning projects and programs with strategic objectives. When managing projects and programs, it’s essential to ensure that initiatives are directly contributing to the organization’s overall strategy and value proposition. By aligning projects with the four actions of reducing, raising, eliminating, and creating, project managers can ensure that resources are allocated efficiently and that the organization is moving towards its desired strategic outcomes.
Innovation Management – The framework encourages innovation in products, services, and processes. When managing projects and programs, this means fostering a culture of innovation and creativity within project teams. Project managers should encourage team members to challenge existing assumptions, think outside the box, and explore new ways of delivering value to customers. By incorporating innovative practices into project management processes, organizations can drive continuous improvement and stay ahead of the competition.
Customer Focus – One of the key principles of the framework is understanding and meeting customer needs. When managing projects and programs, it’s crucial to keep the customer front and center throughout the project lifecycle. Project managers should stretch to use customer-centric approaches and seek feedback from customers and stakeholders, incorporate their input into project planning and execution, and continuously monitor customer satisfaction. By prioritizing customer needs and preferences, project managers can ensure that projects deliver value and meet or exceed customer expectations.
Risk Management – The framework involves making strategic choices that may involve risks and uncertainties. When managing projects and programs, it’s essential to identify, assess, and mitigate risks effectively. Project managers should conduct thorough risk assessments at the outset of the project, develop risk management plans, and monitor risks throughout the project lifecycle. By proactively managing risks, project managers can minimize the likelihood of project delays, cost overruns, and other adverse outcomes, thereby increasing the likelihood of project success.
Cross-Functional Collaboration – The framework often requires collaboration across different functions and departments within an organization. When managing projects and programs, it’s essential to facilitate cross-functional collaboration and communication. Project managers should establish clear roles and responsibilities, foster a collaborative working environment, and facilitate effective communication between project team members, stakeholders, and other relevant parties. By breaking down silos and promoting collaboration, project managers can leverage the diverse expertise and perspectives of team members to drive project success.

Overall, the Four Actions Framework can have a significant impact on managing projects and programs by promoting strategic alignment, innovation, customer focus, risk management, and cross-functional collaboration – and looking at each of the four pieces of the framework for the project, program, or portfolio.

Conclusion

This post reviewed the Four Actions Framework, first providing a simple definition and describing what makes it different and appealing. Then it provided three examples each of public sector and private companies and how they have each uniquely applied the framework. Finally, it looked at how the framework can be applied in devising strategy, and managing project, programs, and portfolios.

Can you share an experiencing you have had with the Four Actions Framework?

The Strategic PM blog has two other posts that provide insights into the Blue Ocean strategy, of which the Four Actions Framework is a part:

This video is excellent and quick – under 2 minutes – and gets right to the core, even with an example of how Drybar applied the framework and became a leader in the hair care industry.

https://youtu.be/MKjSgQRQJV0