Blue Ocean Strategy Ch. 7: Overcome Key Organization Hurdles

Team 6Andrew Etlinger

Blake GreenAshley Haris

Carolynn SchnaubeltDavid Styers

Key ConceptsTipping Point Leadership in ActionDisproportionate Influence FactorsThe Four Hurdles

Cognitive ResourcesMotivationPolitics

Tipping Point LeadershipConventional wisdom says that the greater

the change, the greater the resources and time it will take to bring about desired results

Tipping Point leadership turns conventional wisdom upside down

Tipping Point Leadership allows companies to overcome The Four Hurdles quickly and at a low cost

Ex: Bill Bratton

Break Through the Cognitive HurdleIn many corporate transformations and

turnarounds the hardest part is making your people aware of change and convincing them that it is necessary.

Most CEOs will make their case for change by saying its about the numbers.

This just makes the line managers uneasy, it can cause the managers who’s units are doing well to blame upper management for the current problems.

Likewise, this can cause line managers who’s units that aren’t doing well to be afraid of losing their jobs.

Break Through the Cognitive HurdleAccording to Bratton, to break through this

hurdle you must go after the act of disproportionate influence, making people see and experience reality firsthand.

Science has found that people respond and remember most effectively to what they see and do. i.e. seeing is believing.

So in the business world this means that positive stimuli will reinforce behavior.

However, on the other hand negative stimuli change attitudes and behavior.

“Electric Sewer”In the 1990’s New York’s subway system

started getting bad publicity for being dangerous which lost the city a lot of money.

However, only 3% of crime was committed on subways, so the police felt no need to change their ways and did not disrupt their status quo.

Then, however, Bratton was appointed chief and in a matter of weeks he changed the police’s status quo.

He did this by having all the top and middle brass, including himself, ride the subway day and night.

“Electric Sewer” (cont.)No one else had thought to do this before

Bratton, and they saw what their statistics could not show them.

They realized that the subway was in complete chaos and that the status quo needed to be changed immeadiately.

Listening to Disgruntled CustomersAnother way to tip the cognitive hurdle is to

listen to their most disgruntled customers.You can’t just rely on surveys and polls.Ex: In the 1970’s, Bratton’s Police district

was experiencing a serious surge in crime and people were leaving the neighborhood.

This was happening despite the fact that Bratton’s police force felt they were doing a fine job according to statistics.

Listening to Disgruntled CustomersSo Bratton, in his infinite wisdom decided to

hold a town meeting between his officers and the residents.

Through this meeting, the police force found that their perception of the job they were doing was far different than that of the residents.

They found that the residents thought the police were overlooking the minor crimes.

This meeting allowed the police to re-focus their priorities to better meet the needs of the people.

Jump the Resource HurdleMost leaders are faced with limited resources

and they usually do 1 of 2 things:Demoralize their work forceFight for resources from their bankers or

shareholders which is a very timely process.What leaders should do is focus on multiplying

the value of the resources they already have by using these 3 factors:Hot spotsCold SpotsHorse Trading

Redistribute Resources to Your Hot SpotsHot spots are activities that have low

resource input but high potential performance gains.Ex. The New York Transit Police did this by

placing police officers at their biggest hot spots or places with the most crime. They also put police officers on duty at more practical times like on the weekends when most of the crime is taking place.

Redirect Resources from Your Cold SpotsCold spots are activities that have high

resource input but low performance impact.Ex. The New York Police freed up resources by

searching for cold spots. Their biggest cold spot was processing criminals in court. This would take 16 hours, so instead they started using old buses and then the officer was only needed for 1 hour.

Engage in Horse TradingHorse trading involves trading your unit’s

excess resources in one area for another unit’s excess resources to fill remaining resource gaps.Ex. The New York Police did this by noticing

the Transit unit needed office space and The New York Division of Parole needed cars, but had an excess amount of office space. The trade was obviously perfect for each department.

Jump the Motivational HurdleFor a new strategy to be implemented people must not

only recognize what needs to be done but they must also act on that insight in a sustained and meaningful way.

To motivate employees most business leaders issue grand strategic visions and turn to massive top-down mobilization initiatives but this is expensive and time-consuming.

Another way is to focus on 3 factors of disproportionate influence:KingpinsFishbowl managementAtomization

Zoom in on KingpinsKingpins are the key influencers in the

organization.These are the ones that are natural leaders,

respected, and persuasive.For example in bowling, when you hit the

kingpins straight on the others fall down too.It’s relatively easy for the CEO to identify the

kingpins because of the small number of key influencers.

Place Kingpins in a FishbowlFishbowl management is where kingpins’ actions and

inaction are made as transparent to others as are fish in a bowl of water.

For this to work it must be based on transparency, inclusion, and fair process.

Bratton created Compstat, a review meeting, that brought all the kingpins in twice a week to discuss their performance.

These meetings resulted in an intense performance culture which reached down the ranks.

Fair process is a must because it lets people know that there is a fair playing field and leaders value employees’ intellectual and emotional worth despite all the changes.

Atomize to Get the Organization to Change ItselfAtomization relates to the framing of the strategic

challenge which is one of the most subtle and sensitive tasks of the tipping point leader.

People need to believe the challenge is attainable for it to succeed.

For example, Bratton made the challenge attainable by breaking it into bite-size atoms that officers at different levels could relate to. By doing this responsibility for executing the strategy is shifted from just Bratton to all officers.

Preserving Strategic Execution Processes Being attacked by everyday politics, plotting

plans, and intrigue is not at all uncommon In one’s best interest it is a good idea to seek the stronger and

wiser to become your ally known as a Tipping Point Leader

These leaders often help one decipher who is an “Angel” a ”Devil” or a ”Consigliere”

Angel- Those who have the most to gain from the strategic shift Devil - Those who have the most to lose from a strategic shift Consigliere - Politically adept but highly respected insider who

is knowledgeable about who will attack you and who will not

Consigliere on Your Side When backed into a tough spot, you should never

fight aloneHaving a well aware, respected insider on your right

side is very vital to have Smart managers surround him or herself with experienced

well spoken insiders Your strategy’s survival depends on the defense that

you and your top level team can provide when facing obstacles and or adversity

Consiglieres can help you decipher whether people are political angels or political devils Who will be the best for the strategic objective or who will

bring down the strategic effort

Challenging Conventional WisdomExecuting a disproportionate influence on performances instead of the traditional proportionate influences

Going against the grain of the mass of the employees Performing at the very extremes by

leveraging tipping point leadership

By ignoring conventional wisdom patterns, you can achieve a new strategic plan also improving your competitive advantage

Take AwaysTipping point leadership in actionThe pivotal lever: disproportionate influence

factorsHurdles

Break through the cognitive hurdleJump the resource hurdleJump the motivational hurdleKnock over the political hurdle

Challenging conventional wisdom