Chapter 7 John Parker Kyle Kunkel Thor Fink Teddy Lathrop

Overcome Key Organizational Hurdles Once a company has developed a blue ocean strategy with a profitable business, it must execute it. Getting started in the blue ocean is a big differentiation from the status quo

4 challenges (hurdles) that Managers face 1. Cognitive: waking employees up to the need for a strategic shift 2. Limited Resources: The greater the shift in strategy, the greater it is assumed are the resources needed to execute it 3. Motivation: how do you motivate key players to change away from the status quo 4. Politics: “You get shot down before you stand up.”

Overcome Key Organizational Hurdles 5 th concept covered in the book Companies must abandon perceived wisdom on effecting change Conventional wisdom: asserts that the greater the change, the greater resources, and greater the time needed to do so Tipping point leadership: this allows you to overcome the 4 major hurdles fast and at a low cost while winning employees

Tipping Point Leadership in Action NYPD Executed a blue ocean strategy in the 1990s Bad times in New York City (high crime) Police Commissioner Bill Bratton had to act fast Employees were underpaid and unmotivated and some were even corrupt

NYPD cont. Bratton executed a shift in strategy which lead to very quick results for the city Felony crime fell by 39% Murders by 50% Theft by 35% He did so by defying conventional wisdom and shifted the strategy because it was not working

The Pivotal Lever: Disproportionate Influence Factors Changes can happen quickly when the beliefs and energies of a critical mass of people create an epidemic movement toward an idea The key to unlocking an epidemic movement is concentration, not diffusion

Cont… Tipping point leadership builds on the rarely exploited corporate reality that in every organization are people, acts, and activities that exercise a disproportionate influence on performance.

Key questions answered by Tipping point What factors or acts exercise a disproportionate positive influence on breaking the status quo? On getting the maximum bang out each buck of resources? On motivating key players to aggressively move forward with change? And on knocking down political roadblocks that often trip up even the best strategies?

Breaking Through the Cognitive Hurdle Most CEOs will try to make a case simply on numbers, but don’t really stick with people They could not take it seriously, for example if they are doing well they may not think that the numbers apply to them Tripping Point leaders do not rely on numbers to break through the cognitive hurdle they believe in a more “Seeing is Believing” approach and also use positive stimuli. (NYPD used a zoom in approach)

Facing Organizational Problems To break the status quo, employees must come face to face with the worst organizational problems. Numbers can be uninspiring to employees, but facing the issues directly will influence more.

New York Subway System New York City Subway system was filled with gangs, graffiti, homeless, etc in the 1990s. Subway System earned the epithet “Electric Sewer” Police felt nothing needed to be changed due to the low percentage of major and violent crimes. Citizens and Police Commissioner Bill Bratton felt differently.

Riding The Electric Sewer To make changes, Bratton made all brass, including himself ride the “Electric Sewer.” Police realized that the numbers were misleading, and that a change needed to be made. New York subway system is now much safer after Bratton applied these methods.

Changing the mindset of Superiors Some alternatives are available in changing the mindset of superiors, but the best way is by showing them the absolute worst in and organization. Bratton used this method once again to change the mindset of Mass Bay Transportation Authority board.

New Squad Cars MBTA began purchasing new and smaller squad cars. In order to change the mind of top brass Bratton took MBTA’s General Manager on a tour of New York in one of the cars. Several hours later the GM demanded that Bratton let him out of the car, and ordered the board to buy larger squad cars.

Meeting with Disgruntled Customers Don’t just listen, or review surveys, actually encounter disgruntled customers. Bratton once again changed the mindset of NYPD by arranging town hall meetings with officers and neighborhood residents. Town meetings led to overhaul of police priorities to focus on the blue ocean strategy of “broken windows” Making all brass come face to face with organizational problems, key issues, and disgruntled customers will influence the need for organizational change.

Jump the Resource Hurdle Hot Spots Activities that have low resource input but high potential performance gains Cold Spots Activities that have high resource input but low performance impact Horse Trading Involves trading your unit’s excess resources in one area for another unit’s excess resources to fill remaining resource gaps

Redistribute Resources to Your Hot Spots Hotspots are activities that have low resource input but high potential performance gains You want to relocate your resources to hot spots to improve efficiency Ex. New York Transit Police subway hot spots

Redirect Resources from Your Cold Spots Cold spots are activities that have high resource input but low performance impact Leaders need to free up resources by searching out cold spots Ex. “Bust Buses”

Engage in Horse Trading Horse trading Involves trading your unit’s excess resources in one area for another unit’s excess resources to fill remaining resource gaps Tipping point leaders skillfully trade resources they don’t need for those of others that they do need Ex. New York Transit Police

Jump the Motivational Hurdle Employees must be aware of the need for a strategic shift Identify how to achieve a strategic shift with limited resources Don’t diffuse change efforts widely, seek massive concentration Kingpins, fishbowl management, and atomization

Zoom in on Kingpins Key influencers in the company Focus efforts on them to create a ripple effect NYPD example

Place Kingpins in a Fishbowl Shine spotlight on kingpins in a repeated and highly visible way Exposes those lagging behind and those who are fairing well Must establish a level playing field

Atomize to Get the Organization to Change Itself Relates to the framing of the strategic challenge People need to believe the strategic challenge is attainable Break down the strategic challenge to attainable scale, relatable to all levels of an organization

Knock Over the Political Hurdle Age/treachery > youth/skill Organizational politics will exist Negative influencers exist and will protect their stances more fiercely the more strategic changes become likely their resistance can damage or even derail the strategy execution process

Leveraging Angels, Silencing Devils, and getting a Consigliere Angels: have the most to gain from the strategic shift Devils: have the most to lose from it Consigliere: politically adept but highly respected insider who is aware of potential threats and opportunities Tipping point leaders put one on their top management team

Challenging Conventional Wisdom Conventional theory of organizational change rests on transforming the masses Requires steep resources and long time frames Tipping point leaders focus on transforming the extremes (people, acts, and activities) that exercise a disproportionate influence on performance Fast strategic shift at a low cost