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BLUE OCEAN STRATEGY CH 8: Build Execution Into Strategy Team 3: Taylor Carroll, Andrew Stack, Andrea...
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Transcript of BLUE OCEAN STRATEGY CH 8: Build Execution Into Strategy Team 3: Taylor Carroll, Andrew Stack, Andrea...
BLUE OCEAN STRATEGY
CH 8: Build Execution Into Strategy
Team 3:Taylor Carroll, Andrew Stack,
Andrea Lapotaire, Andrew West, Jessica Sharpless
Strategy Execution Create a culture of trust and commitment
Does Wal-Mart's employees trust management?
Must align hearts and minds Require people to step outside of comfort
zone Do employees think outside of the norm
Inspire voluntary cooperation Quick to grasp new strategy? Strategy must be
forced onto them?
Strategic Execution (cont.) Best planned strategies often fail
Implementation must be programed into the strategy to minimize risk of failure
http://www.youtube.com/watch?v=InIS4icfpVw
Poor Process Can Ruin Strategy Execution Failure to explain a strategy can halt the
execution Trust must be built with employees to
begin to accept the new strategy
Lubber Example Lubber: water-based liquid coolant for the
metalworking industry Several types of coolants to choose from Must be tested to determine right one Machine downtime and sampling costs
Expensive for customers and Lubber New strategy created that would eliminate
complexity and costs of trial phase Cut down failure rate of selecting coolants
from 50% to less than 10%
Lubber Example Cont: Excellent strategy doomed from the
start Sales red saw it as a direct threat to their
most valuable contribution Expressed doubts about effectiveness to
customers Directly effected sales Management forced to pull the system
What could be learned? Using the proper process could have prevented the
demise of the expert system Make sure that the new strategy was properly explained
to all the employees Train on how to use Explain the benefits and effectiveness Make sure employees know that their job is safe and the
new strategy is simply put in place to enhance efficiency
Work manager-employee trust If employees would have trusted management, they would
have known that the new strategy was put in place to better the company and would have known that their jobs were safe
The Power of Fair Process What is fair process?
Engagement Explanation Expectation clarity
How does it allow companies to build execution into strategy?
Fairness/Justice Social scientists John W. Thibaut and Laurens
Walker combined interest of psychology of justice with the study of process Created: Procedural Justice What makes people comply with laws without
being made to do so http://www.youtube.com/watch?v=BpRsZjBw1TI People care as much about the justice of the
process as they do about the actual outcome Satisfaction of outcome increases if it is believed
that procedural justice is exercised
Fairness/Justice Cont. When fair process is exercised, it is
believed that a level playing field exists Inspires employees to voluntarily
cooperate in executing the new strategy Involves going beyond the call of duty
Walmart’s Treatment of Employees Wal-Mart has taken many hits on treatment
of employees Unpaid overtime Sexual discrimination Poor health plan Anti-union activities
Unfair process and justice Could this be causing poor performance? *Wal-mart has since been working to better
employee satisfaction
Google Google is famous for treating employees
well Leisure facilities on campus Excellent health plan Equal employment
What is the outcome of Google’s fair process?
Excellent performance New innovations happen frequently Very successful
The Three E Principles of Fair Process
Engagement- Involving individuals in the strategic decisions that affect them by asking for their input. Communicates management’s respect Better strategic decisions Greater commitment from those involved
Explanation- Making sure everyone involved and affected should understand why final strategic decisions are made. Establish confidence in managers Allows employees to trust managers Powerful feedback loop
Expectation clarity- Stating clearly the new rules of the game after a strategy is set. Understood standards to be held by Strategy can be executed rapidly
WALMART
Why Does Fair Process Matter? Intellectually
Recognition and reflection of individual’s ideas
Emotionally Individual recognition of value
“It all comes down to intellectual and emotional recognition.” –Pg. 181
Intellectual and Emotional Recognition Theory
Individuals share knowledge, when intellectual worth is recognized.
Fair process=voluntary cooperation.
Overcoming Fair Process Adversities Employees reject opposing ideas. If individual ideas are not fostered, they
will refrain from sharing them. Lack of trust in strategy-making
process= lack of trust in implemented strategy
Employees may resist strategies, no matter how efficient it may be.
Fair Process and Blue Ocean Strategy Commitment, trust, and voluntary cooperation
are intangible capital Allows companies to stand apart in the speed,
quality, and consistency of their execution and to implement strategic shifts fast at low cost
When people have trust, they have heightened confidence in others intentions and actions
When people have commitment, they are willing to override personal self-interest in the interests of the company
Fair Process and Blue Ocean Strategy (Continued) Intangible Capital is directly related to
success or failure in executing blue ocean strategies
How do companies create trust, commitment, and voluntary cooperation? Incentives of money and power Exercise of fair process
Fair Process and Blue Ocean Strategy (Continued) By organizing the strategy formulation
process around the principles of fair process, you can build execution into strategy making from the start
Compromises and sacrifices are necessary in building a strong company
http://www.youtube.com/watch?v=wPOgvzVOQig