Blue Ocean Strategy, Tipping Point Leadership and the Four Organizational Hurdles to Strategy Execution

Blue Ocean Strategy, Tipping Point Leadership and the Four Organizational Hurdles to Strategy Execution

Continuing with our Blue Ocean Strategy Basics series, over the course of the next five weeks we will highlight Tipping Point Leadership and the Four Organizational Hurdles to Strategy Execution. Once an overview of each ‘hurdle’ is published it is made accessible through the Blue Ocean Strategy Basics archive of this site. For our introduction to Tipping Point Leadership and the Four Organizational Hurdles to Strategy Execution we turn to pages 147 – 148 of the book Blue Ocean Strategy (co-authored by Professor W. Chan Kim and Professor Renée Mauborgne).

Blue Ocean Strategy, Tipping Point Leadership and the Four Organizational Hurdles to Strategy Execution

Once a company has developed a blue ocean strategy with a profitable business model, it must execute it. The challenge of execution exists, of course, for any strategy. Companies, like individuals, often have a tough time translating thought into action whether in red or blue oceans. But compared with red ocean strategy, blue ocean strategy represents 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.

Managers have assured us that the challenge is steep. They face four hurdles. One is cognitive: waking employees up to the need for a strategic shift. Red oceans may not be the paths to future profitable growth, but they feel comfortable to people and may have even served an organization well until now, so why rock the boat?

The second hurdle is limited resources. The greater the shift in strategy, the greater it is assumed are the resources needed to execute it. But resources were being cut, and not raised, in many of the organizations we studied.

Third is motivation. How do you motivate key players to move fast and tenaciously to carry out a break from the status quo? That will take years, and managers don’t have that kind of time.

The final hurdle is politics. As one manager put it, “In our organization you get shot down before you stand up.”

Although all companies face different degrees of these hurdles, and many may face only some subset of the four, knowing how to triumph over them is key to attenuating organizational risk. This brings us to the fifth principle of blue ocean strategy: Overcome key organizational hurdles to make blue ocean strategy happen in action.

To achieve this effectively, however, 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. Tipping point leadership allows you to overcome these four hurdles fast and at low cost while winning employees’ backing in executing a break from the status quo.