Blue Oceans Part Three:Executing Blue Ocean Strategy 1

Review of last week Part II What was the focus of last week’s Blue Ocean Lecture?

Review of last week Part II Part Two:Formulating Blue Ocean Strategy Part Three:Executing Blue Ocean Strategy

Formulation Principles Risk Factors Reconstruct market boundaries Lowers Search risk Focus on the big picture, not the numbers Lowers Planning risk Reach beyond existing demand Lowers Scale risk Get the strategic sequence right Lowers Business model risk 4

Reconstructing Market Boundaries Six Approaches that Look Across: Alternative Industries Strategic Groups Within Industries The Chain of Buyers Complementary Product and Service Offerings Functional or Emotional Appeal to Buyers Look Across Time 5

Back to This Week Part Three:Executing Blue Ocean Strategy 8

Executiion layout Chapters 7-8: Turn to the principles that drive effective execution of blue ocean strategy. Tipping point leadership, organizational risk, fair process, and management risk are all addressed as new strategies. Chapter 9: Discusses the dynamic aspects of blue ocean strategy- the issues of sustainability and renewal.

Chapter 7 Tipping point leadership & conventional wisdom Conventional wisdom asserts that the greater the change, the greater the resources and time you will need to bring about results. Transforming the extremes will transform the masses. Leveraging tipping point leadership. Focus on acts of disproportionate influence. Align employees’ actions with the new strategy.

Overcome Key Organizational Hurdles Cognitive Hurdles Resource Hurdles Motivational Hurdles Political Hurdles

Overcome Key Organizational Hurdles Cognitive Hurdles Ride the “Electric Sewer” Meet with Disgruntled Customers

Overcome Key Organizational Hurdles Resource Hurdles Redistribute resources to your hot spots Redirect resources from your cold spots Engage in horse trading

Chapter 8 Fair process and blue ocean strategy Commitment, trust, and voluntary cooperation are not merely attitudes or behaviors; they are intangible capital Trust brings heightened confidence in one another’s intentions and actions Commitment enables people to override personal self- interest in the interest of the company Align employees’ actions with the new strategy.

Overcome Key Organizational Hurdles Motivational Hurdles Zoom in on Kingpins (key influencers) Place kingpins on a fishbowl Atomize to get the organization to change itself

Kingpins Kingpins: key influencers who are natural leaders; well respected and persuasive, have an ability to unlock or block access to key resources. When you hit them straight on, all the other come down.

Kingpin Strategy Place Kingpins in a Fishbowl based on transparency, inclusion, and fair process. An intense performance culture is created in weeks. Fair process means engaging all the affected people in the process, explaining to them the basis of decisions and the reasons people will be promoted or sidestepped in the future, and setting clear expectations of what that means to employees’ performance.

Political Hurdles To knock down the political hurdles, you should also ask yourself 2 sets of questions: Who are my devils? Who will fight me? Who will lose the most Who are my angels? Who will naturally align with me? Who will gain the most by the strategic shift?

Overcome Key Organizational Hurdles Political Hurdles Secure a consigliere on your top management team Leverage your angels and silence your devils

Strategy Formulation ProcessFair Process – Engagement, Explanation, Expectation clarity Build Execution Into Strategy Fair Process of Strategy AttitudesTrust and Commitment – “I feel my opinion counts” Behavior Voluntary Cooperation – “I’ll go beyond the call of duty” Strategy ExecutionExceeds Expectation – self initiated

Chapter 8 Fair process and blue ocean strategy Commitment, trust, and voluntary cooperation are not merely attitudes or behaviors; they are intangible capital Trust brings heightened confidence in one another’s intentions/ actions Commitment enables people to override personal self- interest Goal: How to create trust, voluntary cooperation, and commitment deep within the organization