OVERCOME KEY ORGANIZATIONAL
HURDLES
Anthony Gauthier, Austin Hughes, Travis Messerschmitt, Michael
Wilson, John Bell
RELEVANCE IN THE SOFT DRINK INDUSTRY
The soft drink industry has seen hard times in the past few years.
 Fallout from 2005 when the demand for healthier products gained
traction has come to haunt big players.
 Letter to the Shareholders 2015 Coca Cola “And the plain and simple

truth is that capturing this opportunity for you and our Company will require us
to perform at a higher level than we did in 2014.”

The need to create a blue ocean is impending…
EXECUTION OF BLUE OCEAN STRATEGY
A significant departure from the status quo…
 Four Hurdles:
 1) Cognitive
 2) Limited Resources
 3) Motivation
 4) Politics

5TH PRINCIPAL OF BLUE OCEAN STRATEGY
“Overcome key organizational hurdles to make blue ocean strategy
happen in action.”
 Flip conventional wisdom on its head by using…

TIPPING POINT LEADERSHIP
Overcome hurdles fast and at low cost with employee backing for a
break from the status quo.
 The effects of successful tipping point leadership…
 Ex: Bill Bratton and the NYPD



No increase in budget but felony crime down 39%, murder rate down 50%, theft
down 35%.
Changes have outlasted Bratton, fundamental shift in the organization implied.
THE PIVOTAL LEVER
Fundamental changes can happen quickly when beliefs and
energies of critical mass create a movement towards an idea.
 The key to the movement is concentration.

BREAK THROUGH THE COGNITIVE HURDLE
CEOS ACHIEVING BETTER RESULTS
Many CEOs simply look at the numbers and raise the standards
based on performance
 Coke is growing in the opposite direction and changed their
marketing campaign as a result

ISSUES ASSOCIATED WITH HIGHER STANDARDS
Salespeople wanting better commission will falsify numbers
 Hostility and suspicion grow in correlation with goal stretching

EXPERIENCE CHANGES
Companies don’t change simply because of numbers, but must
experience positive or negative impacts to reinforce or change
behavior.
 This can be done in one of 2 ways

RIDE THE “ELECTRIC SEWER”
Originating from public fear of riding on the subway in New York
during the 1990’s the new police chief fixed perception of being
afraid of taking the subway by riding on it himself daily
 Statistically the subway had only 3% of major crimes that occurred
in the city and was safer than most other major metropolitan areas

RIDE THE “ELECTRIC SEWER” CONT.
Top level management typically falls back on numbers to feign
ignorance
 New Coke fell back on blind taste tests to prove that the new drink
tasted better

MEET WITH DISGRUNTLED CUSTOMERS
Top level can’t afford to simply experience what customers are
going through, they must also talk to customers about specifics
 With New Coke it tasted better, however all the data couldn’t show
the emotional attachment to the brand of Classic Coke

JUMPING THE RESOURCE HURDLE

Multiply the value of the resources you have

Three disproportionate influences a company can leverage to free resources


Hot Spots, Cold Spots, and Horse Trading
Hot spots
Low resource input and high potential performance gains
 Coca Cola overcame a huge analytics problem by unifying its
distribution centers under one analytics system

JUMPING RESOURCE HURDLES CONTINUED…
Avoid Cold Spots (high resource input, low performance impact)
 Horse Trading

Trading excess resources in one area for another to fill resource gaps
 Allocate resources so they are used efficiently


Coca-Cola Water Stewardship

Reallocated money from Diet Coke to create seed funds for Water
Stewardship Project
NYPD TRANSIT STRATEGY CANVAS
Resource
Allocation
RESOURCE ALLOCATION
Focused on hot spots, such as high crime areas, and quality-of-life
crimes
 De-emphasized cold spots, such as widespread patrol of subways
and officer involvement in processing arrests.

COCA-COLA RESOURCE ALLOCATION
Coca-Cola recently reallocated resources.
 Ways that they allocated resources away from cold spots include
job reductions and selling bottling factories.
 They targeted hot-spots such as resale margins and package sizes.
They increased prices and promoted smaller packing sizes.

MOTIVATIONAL HURDLE
The mass of employees must be motivated to implement a blue
ocean strategy.
 To motivate employees, managers focus on three factors of
disproportionate influence: kingpins, fishbowl management, and
atomization.

KINGPINS
“Kingpin” refers to the key influencers in an organization, like a
kingpin in bowling.
 This frees the top-level leaders to focus less on each individual.
 These natural leaders will persuade and motivate those that follow
them.

PLACE KINGPINS IN A FISHBOWL
Putting the kingpins in the fishbowl puts attention of others on
them.
 This both motivates them to perform well and raises the stakes of
inaction.
 Those that lag behind are noticed and those that perform well are
noticed and rewarded.

ATOMIZE THE CHALLENGE
A strategic challenge MUST be achievable for
people to believe they can do it.
 Break it down
 Nestle wanted to be “World Leader in
Nutrition”

Created Nestle Health Sciences
 In-Depth Research
 Acquired Healthy Companies in line with their
research

KNOCK OVER THE POLITICAL HURDLE

Inescapable. Must defeat it.
Leverage Angels
 Silence Devils
 Get a consigliere on your team

LEVERAGE ANGELS &
SILENCE DEVILS
Who stands to gain the most
by shift?
 Who naturally aligns with me?
 Build a strong coalition with
them early!

Who stands to lose the most?
 Build up resistance against
them before it’s a problem.
 Know their likely attacks

CONSIGLIERE
Member of upper management
team
 Often forgotten
 Have the inside scoop
 Like a cheat code in
minesweeper
