Join the Circus

It's this willingness to take creative risk that is Cirque's original genius and the key to its competitive success, says Renee Mauborgne, coauthor of Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant (Harvard Business School Press, 2005) and professor of strategy and management at INSEAD. Cirque combined the thrill of the circus with the high production values and intellectual sophistication of the theater or ballet to create a new art form and, along with it, a new "blue ocean" market. The company's future, she says, will depend on its ability to sustain that culture of risk taking, particularly as competitors enter the market. "The danger is that when you begin to be imitated, you start entering into red-ocean competition, where your focus is on outcompeting rivals rather than on creating the next blue ocean," says Mauborgne. "Then the competition, and not the marketplace, sets your agenda."

Already the sharks are in the water. A rival clowncentric production called "Slava's Snowshow" is drawing raves for its "breathtaking images." The Canadian Cirque Eloize has been lauded as "a new generation of circus performers focusing on innovation, imagination, and show-stopping panache." Even venerable Ringling Brothers has added more theatrical elements to its show. And in late April, literally across the street from Cirque's original Vegas outpost, Steve Wynn debuted "Le Reve," a Cirque-style show, at his posh new $2.7 billion Wynn Las Vegas. Ironically, Wynn is the very guy who gave Cirque's founder, CEO, and creative guru, Guy Laliberte, his biggest break, by installing the company's first permanent show, "Mystere," at his Treasure Island hotel in 1993.

In Montreal, Cirque acknowledges the mounting competition but refuses to let it distract from the main mission. It must focus on the challenge of producing 11 blockbuster shows, often as much as 10 times a week, 52 weeks a year. That requires the ability to recruit, train, and replace injured or retiring performers, to continually find and develop fresh acts, and to maintain constant vigilance over the productions, from their costumes to their often daunting technical complexity. It has taken Cirque two decades to build an infrastructure -- what director of creation Gilles Ste-Croix calls Cirque's "machine" -- that can consistently deliver that level of support and innovation. Most important, however, is the company's ability to reinvent the brand with each new production. That, he says, is the toughest bar for competitors to overcome.

"A typical day at the office for me begins by asking: What is impossible that I'm going to do today?"

Lamarre agrees, pointing to the willingness of Cirque's Laliberte to put creativity before profits: "I haven't yet met anyone willing to invest as much money as Guy does in production, infrastructure, and risk taking." Cirque plows more than 70% of its profits back into new initiatives, R&D, and new shows every year, he says. "We built our brand on creativity, and if we don't respect this first value of our brand, it would be counterproductive for us long term." It can all make for a chaotic, stressful, demanding -- or, if your DNA is up to it -- exhilarating work environment. Says Lamarre: "A typical day at the office for me begins by asking: What is impossible that I'm going to do today?"

The saga of Cirque du Soleil is, if not impossible, then pretty improbable. In the early 1980s, in a small town near Quebec, a street performer named Gilles Ste-Croix and some friends formed a theatrical troupe called Le Club des Talons Hauts (the High Heels Club), specializing in circus arts: juggling, acrobatics, stiltwalking, music. One of the members was a fire breather and accordion player named Guy Laliberte. In 1982, the troupe organized a street performers' festival, which was so successful it inspired Laliberte to approach the city of Quebec with a proposal for a show called Cirque du Soleil (Circus of the Sun) to help celebrate Canada's 450th anniversary.

From the start, the show was hardly a conventional circus. It had outrageous costumes, original music, and clever performers -- but no animals. Despite the dearth of beasts, it was a rousing success. Those initial decisions were brilliant, says Mauborgne, since they essentially redefined the game. By not featuring animals, Cirque eliminated one of the most costly and controversial parts of any circus. And by shifting the focus from an event geared to kids to one designed for adults, it could reinvent the pricing model as well. By combining the best of circus and theater, Cirque pulled in an audience the traditional circus had never seen: adult theatergoers accustomed to paying steeper ticket prices. In 1987, the troupe made its first visit south of the border, premiering at the Los Angeles Arts Festival. It was also Cirque's first big risk. Had the show bombed, the company was too broke to get the equipment back to Canada. Fortunately, it was a smash.