1. Chapter 8: Build execution into strategy
Jill, Shelby, Jason, Paul, Brandon

2. What is a company? Everyone from the top to the bottom
When all members of an organization are aligned around a strategy and support it, for better or for worse
The attitudes and behavior of its people deep in the organization
Creates a culture of trust and commitment

3. In Blue Oceans
People are asked to step out of their comfort zones

4. 6th Principle of Blue Ocean Strategy
To build peoples trust and commitment deep into the ranks and inspire their voluntary cooperation.
Companies need to start this from the beginning
Minimizes the management risk of distrust, noncooperation, and even sabotage

5. The Power of Fair Process
John W. Thibaut and Laurens Walker
They combined their interests in psychology of justice with the study of process, creating the term procedural justice
They began to understand what makes people trust a legal system so that they will comply with laws without being coerced

6. How Fair Process Affects Peoples Attitudes and Behaviors

7. Three E Principles of Fair Process
Three mutually reinforcing elements that define fair process
Engagement
Explanation
Clarity of expectation

8. 1. Engagement
Involving individuals in the strategic decisions that affect them by asking for their input and allowing them to refute the merits of one another’s ideas and assumptions
Sharpens everyone’s thinking
Builds collective wisdom

9. 2. Explanation
Everyone involved and affected should understand why final strategic decisions are made as they are
Employees trust managers intentions
Overall interest in the company

10. 3. Expectation Clarity
Requires that after a strategy is set, managers state clearly the new rules of the game
Employees need to know standards and penalties
What are goals? What are new targets and milestones? Who is responsible for what?

11. 3 E’s Principle Plan for ethically sourced coffee Outline guidelines
Goals and progress
Want to reach 100% ethically sourced

12. Elco 1980’s Elevator Company Falling demand
Office space vacancy up to 20%
Abandoned batch-manufacturing
Adopted cellular approach

13. Tale of Two Plants Chester High Park Great employee relations
Decertified their own union
“ideal work force”
High Park
Reputation for resistance
Strong union

14. Chester Violated fairness principles Did not engage employees
No explanation
Why the change
No clear expectation
What were employee expectations
Employees feared layoffs

15. High Park Followed principles of fairness Engagement Explanation
Series of plant-wide meetings
Explanation
Management visited other companies and saw benefits to cellular manufacturing
Expectations
Clearly defined expectations of employees

16. Fair Process Matters Employees feel valued Emotional recognition
Respect, dignity
Intellectual recognition
Thoughts and ideas valued

17. Intellectual and emotional recognition theory
Individuals have a need to feel recognized for their intellectual worth
Shared knowledge
Suggesting active ideas
Individuals have a need for emotional recognition
Emotionally tied to strategy
More willing to give it their all

18. “You don’t value my ideas, so I don’t value your ideas, nor do I trust in or care about the strategic decisions you’ve reached”
Sabotage- Elco’s Chester plant

19. Intellectual and Emotional Recognition Trust and Commitment
Fair Process
Intellectual and Emotional Recognition
Trust and Commitment
Voluntary Cooperation in Strategy Execution

20. Violation of Fair Process Intellectual and Emotional Indignation
Distrust and Resentment
Refusal to Execute Strategy

21. Fair Process Commitment Trust Voluntary Cooperation
Attitudes and behaviors?
Intangible capital?

22. Fair Process
The question companies wrestle with is how to create trust, commitment, and voluntary cooperation deep in the organization.
Exercise of fair process
People realize that compromises and sacrifices are necessary in building a strong company
Accept the need for short-term personal sacrifices in order to advance the long- term interests off the corporation
This acceptance is conditional on the presence of FAIR PROCESS

23. Class Take aways
Blue oceans are scary for employees also, not just management
Ignoring fairness principles can ruin even the best working environment
Intellectual and Emotional Recognition are necessary for building a blue ocean
4. Trust, commitment, and voluntary cooperation are Intangible Capital