Blue OceansBlue OceansPart Three:Executing Blue Ocean Part Three:Executing Blue Ocean StrategyStrategy

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Review of last week Part IIReview of last week Part II

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

Review of last week Part IIReview of last week Part II

Part Two:Formulating Blue Ocean StrategyPart Two:Formulating Blue Ocean Strategy

Part Three:Executing Blue Ocean StrategyPart Three:Executing Blue Ocean Strategy

Formulation PrinciplesFormulation Principles Risk FactorsRisk Factors

Reconstruct market boundariesReconstruct market boundaries Lowers Search riskLowers Search risk

Focus on the big picture, not the Focus on the big picture, not the numbersnumbers Lowers Planning riskLowers Planning risk

Reach beyond existing demandReach beyond existing demand Lowers Scale riskLowers Scale risk

Get the strategic sequence rightGet the strategic sequence right Lowers Business model Lowers Business model riskrisk

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Reconstructing Market BoundariesReconstructing Market Boundaries

Six Approaches that Six Approaches that Look Across:Look Across:

Alternative IndustriesAlternative Industries

Strategic Groups Within IndustriesStrategic Groups Within Industries

The Chain of BuyersThe Chain of Buyers

Complementary Product and Service OfferingsComplementary Product and Service Offerings

Functional or Emotional Appeal to BuyersFunctional or Emotional Appeal to Buyers

Look Across TimeLook Across Time

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Back to This WeekBack to This WeekPart Three:Executing Blue Ocean Part Three:Executing Blue Ocean StrategyStrategy

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Executiion layoutExecutiion layoutChapters 7-8: Turn to the principles that drive Chapters 7-8: Turn to the principles that drive effective execution of blue ocean strategy. effective execution of blue ocean strategy. Tipping point leadership, organizational risk, Tipping point leadership, organizational risk, fair process, and management risk are all fair process, and management risk are all addressed as new strategies. addressed as new strategies.

Chapter 9: Discusses the dynamic aspects of Chapter 9: Discusses the dynamic aspects of blue ocean strategy- the issues of blue ocean strategy- the issues of sustainability and renewal.sustainability and renewal.

Chapter 7Chapter 7Tipping point leadership & conventional wisdomTipping point leadership & conventional wisdom

Conventional wisdom asserts that the greater the Conventional wisdom asserts that the greater the change, the greater the resources and time you will change, the greater the resources and time you will need to bring about results.need to bring about results.

Transforming the extremes will transform the masses.Transforming the extremes will transform the masses.

Leveraging tipping point leadership.Leveraging tipping point leadership.

Focus on acts of disproportionate influence.Focus on acts of disproportionate influence.

Align employees’ actions with the new strategy.Align employees’ actions with the new strategy.

Overcome Key Organizational Overcome Key Organizational HurdlesHurdles

Cognitive HurdlesCognitive Hurdles

Resource HurdlesResource Hurdles

Motivational HurdlesMotivational Hurdles

Political HurdlesPolitical Hurdles

Overcome Key Organizational Overcome Key Organizational HurdlesHurdles

Cognitive HurdlesCognitive Hurdles

Ride the “Electric Sewer”Ride the “Electric Sewer”

Meet with Disgruntled CustomersMeet with Disgruntled Customers

Overcome Key Organizational Overcome Key Organizational HurdlesHurdles

Resource HurdlesResource Hurdles

Redistribute resources to your hot spotsRedistribute resources to your hot spots

Redirect resources from your cold spotsRedirect resources from your cold spots

Engage in horse tradingEngage in horse trading

Chapter 8Chapter 8Fair process and blue ocean strategyFair process and blue ocean strategy

Commitment, trust, and voluntary cooperation are not Commitment, trust, and voluntary cooperation are not merely attitudes or behaviors; they are intangible merely attitudes or behaviors; they are intangible capitalcapital

Trust brings heightened confidence in one another’s Trust brings heightened confidence in one another’s intentions and actionsintentions and actions

Commitment enables people to override personal self-Commitment enables people to override personal self-interest in the interest of the companyinterest in the interest of the company

Align employees’ actions with the new strategy.Align employees’ actions with the new strategy.

Overcome Key Organizational Overcome Key Organizational HurdlesHurdles

Motivational HurdlesMotivational Hurdles

Zoom in on Kingpins (key influencers)Zoom in on Kingpins (key influencers)

Place kingpins on a fishbowlPlace kingpins on a fishbowl

Atomize to get the organization to change itselfAtomize to get the organization to change itself

KingpinsKingpins

Kingpins: key influencers who are natural Kingpins: key influencers who are natural leaders; well respected and persuasive, have leaders; well respected and persuasive, have an ability to an ability to

unlock or unlock or

block access to key resources. block access to key resources.

When you hit them straight on, all the other When you hit them straight on, all the other come down.come down.

Kingpin StrategyKingpin StrategyPlace Kingpins in a Fishbowl based on Place Kingpins in a Fishbowl based on transparency, inclusion, and fair process. An transparency, inclusion, and fair process. An intense performance culture is created in intense performance culture is created in weeks.weeks.

Fair process means engaging all the affected Fair process means engaging all the affected people in the process, explaining to them the people in the process, explaining to them the basis of decisions and the reasons people will basis of decisions and the reasons people will be promoted or sidestepped in the future, and be promoted or sidestepped in the future, and setting clear expectations of what that means setting clear expectations of what that means to employees’ performance.to employees’ performance.

Political HurdlesPolitical Hurdles

To knock down the political hurdles, you should To knock down the political hurdles, you should also ask yourself 2 sets of questions:also ask yourself 2 sets of questions:

Who are my devils? Who will fight me? Who will Who are my devils? Who will fight me? Who will lose the mostlose the most

Who are my angels? Who will naturally align Who are my angels? Who will naturally align with me? Who will gain the most by the with me? Who will gain the most by the strategic shift?strategic shift?

Overcome Key Organizational Overcome Key Organizational HurdlesHurdles

Political HurdlesPolitical Hurdles

Secure a consigliere on your top management Secure a consigliere on your top management teamteam

Leverage your angels and silence your devilsLeverage your angels and silence your devils

Strategy Formulation ProcessFair Process – Engagement, Strategy Formulation ProcessFair Process – Engagement, Explanation, Expectation clarityExplanation, Expectation clarity

Build Execution Into StrategyBuild Execution Into StrategyFair Process of StrategyFair Process of Strategy

AttitudesTrust and Commitment – “I feel my opinion counts”AttitudesTrust and Commitment – “I feel my opinion counts”

Behavior Voluntary Cooperation – “I’ll go beyond the call of Behavior Voluntary Cooperation – “I’ll go beyond the call of duty”duty”

Strategy ExecutionExceeds Expectation – self initiatedStrategy ExecutionExceeds Expectation – self initiated

Chapter 8Chapter 8Fair process and blue ocean strategyFair process and blue ocean strategy

Commitment, trust, and voluntary cooperation Commitment, trust, and voluntary cooperation are not merely attitudes or behaviors; they are are not merely attitudes or behaviors; they are intangible capitalintangible capital

Trust brings heightened confidence in one Trust brings heightened confidence in one another’s intentions/ actionsanother’s intentions/ actions

Commitment enables people to override Commitment enables people to override personal self-interest Goal: How to create trust, personal self-interest Goal: How to create trust, voluntary cooperation, and commitment deep voluntary cooperation, and commitment deep within the organizationwithin the organization