Blue Ocean Strategy: Overcome Key Organizational

HurdlesBy: Andrei Gololobov, Lana Grimes, & Laura

McMannis

So You Have a Plan…For your strategy to work, the working plan

must be translated into action.Regardless of which strategy is used

Beware: Translating a plan in a Blue Ocean Strategy is more difficult.

Managers face Four Hurdles

Four Hurdles to Strategy ExecutionCognitive: Departing from the status quo.Limited Resources: A shift in strategy may

demand additional resources.Motivation: Invigorating employees and key

players to break from the status quo.Politics: Bureaucracy, corruption, and

opposition from key players who support the status quo.

Tipping Point LeadershipUsed by leaders to successfully jump the

Four Hurdles with the backing of employees while using limited resources.

Breaks the myth that the only way to bring about greater change is to use greater resources

Tipping Point LeadershipKey is to concentrate on specific areas of an

organizationTime and money can be saved if the

organization focuses in on factors of disproportionate influences

Example: Bill Bratton and the New York City Police Department

Key Questions to AnswerWhat factors exercise disproportionately

positive influence on…..Breaking the status quoGetting the maximum results from limited

resourcesMotivating key players to support changeKnocking down political roadblocks

Cognitive HurdleMake people aware of a need for changeAvoid using numbers and statistics

They can be misleadingPeople respond more effectively with

personal observation and experience“Seeing is beliveing”

Breaking the Status QuoMake employees personally face the

operational problemsPersonally meet with dissatisfied customers

and employeesAvoid using surveys

Jump the Resource HurdleMajor impediment – limited resources

What can happen then?

Trim the Fight for more Ambition resources

What is the Solution?

DO NOT focus on getting more resourcesDO multiply the value of the resources you

already have

Consider three factors that can help, on the one hand, to free resources, and on the other to multiply resources

Three Factors of Influence

I. Hot Spots – activities with currently low resource input but high potential gains

II. Cold Spots – high resource input but low performance impact

III. Horse Trading – exchanging one unit’s excess resources in one area for another unit’s excess resources to fill remaining gaps

Redistribute Resources in YourHot SpotsNYPD reorganization:

1) Subway officers changed from patrolling every line and station to just those in need of most attention2) Narcotics unit was prioritized to appropriate time and number of officers it really required

Redirect Resources from Your Cold SpotsNYPD: The bottleneck of processing criminals

in court is replaced by using “bust buses” right outside the subway stations, thus cutting time spent from 16 hours to just one

Engage in Horse TradingNYPD:

Transit Department’s Division of Parole’ssurplus of vehicles excess office space

High___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

Low ___________________________________________________________________Widespread Involvement Arrests of Issuance of desk Arrests Group Focus on Arrests of Use of Train Sweeps Patrols of of officers in warrant violators appearance tickets Arrests Quality-of-life warrant s “bust Subway System processing in daytime Crimes during busses”

arrests sleeping hours

Four Actions Framework

Figure 7-2 from BOS

After Bratton’s Appointment

Before Bratton’s Appointment

Johnson & Johnson: Three Factors

Hot Spots – Recently announced plans to expand work in infectious diseases like HIV, hepatitis C and the flu (WSJ: October 19, 2010); J&J’s purchase of Crucell (Blumberg Business Week: October 24, 2010)

Cold Spots – In 2009 the world's biggest health-care products company faced patent expirations worth $3 billion in sales along with a worldwide economic downturn, which drove earnings down (2010 Fortune 500)

Horse Trading - Scientific breakthroughs, marketing insights and manufacturing expertise transfer across the full range of businesses.

- Decentralization - delegation of decision-making to the subunits of an organization, closer to consumer or beneficiary.

Jump the Motivational HurdleAlert employees about need for a strategic shiftIdentify how it can be achieved with limited

resourcesUse a reverse course and seek massive

concentrationFocus on three factors of disproportionate influence to motivateKingpins, fishbowl management, and atomization

Zoom in on Kingpins

Key influencers in the organizationNatural leadersHave ability to unlock access to key

resourcesRelatively small number

Place Kingpins in a FishbowlFishbowl management

Actions and inactions are made transparentBased on transparency, inclusion, and fair

processIntense performance culture evolves

No one wants to be a laggard

Fair ProcessMeaning

Engaging all the affected people in the processExplaining basic decisionsExplaining reasons people will be promoted or

side-steppedSetting clear expectations of what that means to

employees’Signals

Level playing fieldLeaders value employees’ intellectual & emotional

worth despite all the change that may be recquired

Atomize to Get the Organization to Change ItselfFraming of the strategic challengeMaking employees think it is attainableMake the challenge actionable at all levels

Knock Over the Political HurdleOvercome

Internal & external negative influencers By utilizing three disproportionate influence

factorsLeveraging angels

Have the most to gain from the strategic shiftSilencing devils

Have the most to lose from itGetting a consigliere on top management team

Insider who knows in advance all the land mines (who will fight you and who will support you)

Leverage Your Angels & Silence Your DevilsIdentify detractors and supporters

Strive to create a win-win outcome for both, quickly

Isolate detractors by building a coalition with angels before the battle beginsDiscourages the war from even starting

Win over detractors/devils by Knowing their angles of attackBuilding up counterarguments backed by

facts and reason

Challenging Conventional WisdomConventional

Transform the massTipping point leadership

Reverse courseFocus on transforming the extremes

People, acts, and activities that exercise a disproportionate influence on performance

Able to change the core fast & at low cost to execute their new strategy

Conventional Wisdom Versus Tipping Point Leadership

TakeawaysDO NOT give up if it is impossible at the

moment to increase financial support in order to boost the company's outputs, instead DO work on maximizing the value of existing resources

Critical leadership component is focusing on acts of disproportionate influence because it aligns employees’ actions with the new strategy

Tipping point leadership allows you to overcome these four hurdles fast and at low cost while winning employees’ backing in executing a break from the status quo