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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