Your Blue Ocean Strategy’ book and concept -- which encourage firms to stop fighting their rivals in ‘bloody-red oceans’ for a shrinking pool of profits and instead create ‘blue oceans’ of uncontested market space– has been wildly popular. How does the current finance crisis affect this theory?
In the past few months, the impact of the financial crisis has been felt around the globe. The turmoil has been eroding business confidence, contracting both investments and consumer spending, and increasingly trapping the real economy into recession. As we know, a recession or depression is typically marked by a decline in overall demand, which will further exacerbate the situations of companies that are already facing intense competition and shrinking profit margins. Under such conditions, competing within a contracting market and dividing existing-and-shrinking demand will only lead to the path of doom.
The third hurdle is the motivational hurdle. In today’s environment of shrinking bonuses and mass layoffs, how can managers motivate employees?
For a new strategy to be executed effectively, people must not only recognize what needs to be done, they must also have the motivation to act on that insight in a sustained and meaningful way. This point is especially critical today, as companies are going through strategic adjustments or changes – some of them necessary evils – to survive and overcome the adverse economic conditions. Tipping-point leadership aims to motivate employees quickly and at low cost. To achieve this, leaders must ask, Who are our key influencers -- our ‘kingpins’? How can we focus the spotlight on and manage them based on fair process? By focusing on factors of disproportionate influence in motivating employees, including kingpins, managers can avoid the conventional pitfalls of launching massive top-down mobilization initiatives that are usually inefficient and ineffective, and instead execute a strategic transformation quickly and at low cost.
[This article has been reprinted, with permission, from Rotman Management, the magazine of the University of Toronto's Rotman School of Management]
BOS is innovation in the true sense of the term, as it not only changes the working process of the large corporations of the world, but also alters, modifies, and if need be, overhauls individual approach whilst managing a crisis at any given point.
on Jan 7, 2010