Summary of the book Blue Ocean Strategy by Phil Meyers Chapter 7 Overcome Key Organizational Hurdles

“…The challenge of execution exists, of course, for any strategy. …But compared with red ocean strategies blue ocean strategies represent a significant departure from the status quo. It hinges on a shift from convergence to divergence in value curves at lower costs. That raises the execution bar.” It raises the execution bar significantly higher than what is required by a red ocean strategy. The challenge is very steep and there are typically four major hurdles that must be cleared: 1 Cognitive: Waking employees up to the fact that a significant shift in strategy is needed. Competing in a red ocean may not be the correct path for future growth but it is understandable and comfortable for most people. 2 Limited Resources: The greater the hurdle the more resources are assumed to be required. In most environments all the employees are already fully occupied executing the dayto-day work involved in running the existing business. Motivation: How do you motivate key players to move fast and tenaciously to carry out a break from the status quo? Politics: No matter the size of the company there is always politics. Even in ours.

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“… companies must abandon perceived wisdom on effecting change. Conventional wisdom asserts that the greater the change, the greater the resources and time you will need to bring about results. Instead you need to flip conventional wisdom on its head using what we call tipping point leadership.” A critical point here. The terminology is very important. They did not use the word manage or management here they used the word leadership. For the last decade I have used my own definition of the difference between management and leadership. That is: You manage within a paradigm, in order to change paradigm you must lead the way across. Blue Ocean Strategies are by definition paradigm breakers so attempting to manage your way through the execution is doomed to failure. Chapter 7 147-169 needs to be read in its entirety it is too full of examples to do justice trying to summarize it.

Chapter 8 Build Execution into Strategy
“A company is not only top management nor is it only middle management. A company is everyone from the top to the front lines. And it is only when all the members of an organization are aligned around a strategy and support it, for better or for worse, that a company stands apart as a great and consistent executor.” All the hearts and minds of all the people in a company must align with the new strategy so that people embrace the new strategy on their own. Other wise you have compulsory execution rather than voluntary execution. A blue ocean strategy like any and all significant changes requires that people go well beyond the minimum requirements to fulfill their jobs. It requires enthusiasm

Intellectually. Expectations: “clarity requires that after a strategy is set. Such frequently cited expression in our interviews as ‘that goes for everyone I know’ or ‘every person wants to feel’ and constant references to ‘people’ and ‘human beings’ reinforce the point that managers must see the nearly universal value of the intellectual and emotional recognition that fair process conveys. We are starting at point number 3 in many cases without building the foundation contained in steps 1 and 2.’ or ‘human resources’ but as human beings who are treated with full respect and dignity and appreciated for their individual worth regardless of hierarchical level. The authors created what they call “FAIR PROCESS” as a management and communication technique. (This is what we talk about.) 1 Engagement: “means 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. A willingness to step well outside their comfort zone because the way they worked in the past will not work in the future.” Figure 8-2 2 . and expectation. What are the targets and milestones? c. I would contend that we do not. Who Violation of Fair Process is responsibleand what? Intellectual for emotional indignation do this pretty Distrust and resentment Refusal to execute strategy I think that we think we well. Although the expectations may be demanding. why does the observance or violation of fair process in strategy making have the power to make or break a strategy’s execution? In all comes down to intellectual and emotional recognition. individuals seek recognition of their value. Engagement results in better strategic decisions by management and greater commitment from all involved to execute those decisions.Summary of the book Blue Ocean Strategy by Phil Meyers rather than compliance. Encouraging refutation sharpens everyone’s thinking and builds better collective wisdom. Engagement communicates management’s respect for individuals and their ideas. explanation. Passion not just competency. managers state clearly the new rules of the game. The three principles that they use are engagement. individuals seek recognition that their ideas are sought after and given thoughtful reflection. Emotionally. not as ‘labor. Why Does Fair Process Matter? “Why is fair process important in shaping people’s attitudes and behavior? Specifically. and that others think enough of their intelligence to explain their thinking to them. An explanation of the thinking that underlies decisions makes people confident that managers have considered their opinions and have made decisions impartially in the overall interests of the company.’ ‘personnel. To build the level of trust within the organization required to execute a blue ocean strategy you must build the execution capabilities into the strategy itself. emotional Commitment What are the goals of the new strategy? recognition Intellectual and Trust and Voluntary cooperation in strategy execution 3 b. 2 Explanation: “means that everyone involved and affected should understand why final strategic decisions are made as they are. Fair Process a. employees should know up front what standards they will be judged by and the penalties for failure.

sooner or later imitators appear on the horizon. AND VOLUNTARY COOPERATION ARE NOT MERELY ATTITUDES OR BEHAVIORS.Summary of the book Blue Ocean Strategy by Phil Meyers The Execution Consequences of the Presence and Absence of Fair Process in Strategy Making “COMMITMENT.” Chapter 9 Conclusion: The Sustainability and Renewal of Blue Ocean Strategy ”Creating blue oceans is not a static achievement but a dynamic process. The more customers you have the more attractive you become Because imitation often requires companies to make substantial changes to their existing business practices A huge leap in value often earns brand buzz and a loyal following in the marketplace · · · · · · My thoughts again: Think back about the enormous value innovation Sonlight provided nearly 20 years ago. …how easy or difficult is blue ocean strategy to imitate?” Barriers to imitation “A blue ocean strategy brings with it considerable barriers to imitation. THEY ARE INTANGIBLE CAPITAL. Some of these are operational. direct competition in the literature based homeschool 3 . · Brand image conflict can prevent companies from attempting to imitate a blue ocean strategy Natural monopoly can block imitation if the size of the market cannot support another player Copyrights. TRUST. patents or other legal blocks are in place The high volume generated by a large value innovation leads to rapid cost advantages. Now we do have competition. Once a company creates a blue ocean and its powerful performance consequences are known.” Often a blue ocean strategy can go for a decade without credible challenges. placing potential imitators at a sever disadvantage Network externalities. · A value innovation does not make sense based on conventional strategic logic. and others are cognitive. This sustainability can be traced to the following barriers to imitation.

Summary of the book Blue Ocean Strategy by Phil Meyers marketplace. nor certainly are we the most affordable. We are no longer the only game in town. 4 . It is time. I believe for us to seriously consider trying to create a new blue ocean. These imitators are taking market share away from us.

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