Blue Ocean Strategy News - How Fair Process Could Have Saved Alberto Gonzales

Blue Ocean Strategy News - How Fair Process Could Have Saved Alberto Gonzales

What did Alberto Gonzales do wrong as a leader and manager? Take your pick -- there are many good choices. But I’m going to focus on one mistake that I haven’t read about elsewhere in the voluminous press about his shortcomings. He didn’t employ “fair process” with the knowledge workers he oversaw.

Chan Kim and Renee Mauborgne, now best known for their “blue ocean strategy” work, wrote about fair process in 2003. They argued that knowledge workers are particularly conscious of whether a fair, rational process is being used to evaluate employees and their work. Knowledge workers, they explained, don’t want equality of outcomes, but they do want to be judged fairly and equitably.

U.S. attorneys are presumably knowledge workers, and pretty high-level ones at that. But they were hardly managed with a fair process by Gonzales and his Justice Department colleagues. Several attorneys had received highly laudatory performance evaluations by their peers, but were fired anyway. They were told that their jobs were to enforce the law for everyone, but were then evaluated on their enforcement of laws against Democrats. Even though they were loyal Republicans, they were told to go away and shut up. Monica Goodling, Gonzales’ young henchwoman, admitted before Congress that she crossed the line into politically-oriented questioning and evaluation of the attorneys, even though it’s against the law.

Of course, Gonzales has been loyal to his boss, and he probably thought his upward relationship was all that mattered. His resignation today, at last, suggests that he was wrong. He was given plenty of chances to explain himself, but the more he talked, the worse he looked. Months of fact-finding and testimony have revealed that he and his office mistreated the knowledge workers beneath him. Unlike the U.S. attorneys he fired, at least Gonzales got some semblance of a fair process.

Blue Ocearn Strategy - The ERRC Grid

Blue Ocearn Strategy - The ERRC Grid

The Eliminate-Reduce-Raise-Create Grid (ERRC) is complementary with the four actions framework, blue ocean strategy. It pushes companies not only to ask all four questions in the four actions framework but also to act on all four to create a new value curve, essential for unlocking a new blue ocean. By driving companies to fill in the grid with the actions of eliminating and reducing as well as raising and creating, the grid gives companies four immediate benefits:

• It pushes them to simultaneously pursue differentiation and low cost to break the value-cost trade off.
• It immediately flags companies that are focused only on raising and creating and thereby lifting the cost structure and often overengineering products and services - a common plight in many companies.
• It is easily understood by managers at any level, creating a high level of engagement in its application.
• Because completing the grid is a challenging task, it drives companies to robustly scrutinize every factor the industry competes on, making them discover the range of implicit assumptions the make unconsciously in competing.

Blue Ocean Strategy - The Four Actions Framework

Blue Ocean Strategy - The Four Actions Framework

To reconstruct buyer value elements in crafting a new value curve, we use the Four Actions Framework, blue ocean strategy. As shown in the diagram above, to break the trade-off between differentiation and low cost and to create a new value curve, there are four key questions to challenge an industry's strategic logic and business model:

1. Which of the factors that the industry takes for granted should be eliminated?
2. Which factors should be reduced well below the industry's standard?
3. Which factors should be raised well above the industry's standard?
4. Which factors should be created that the industry has never offered?