Blue Ocean Leadership : Part II of III

Blue Ocean Leadership : Part II of III

The Four Steps of Blue Ocean Leadership

Now let’s walk through how to put blue ocean leadership into practice. It involves four steps:

1. See your leadership reality.

A common mistake organizations make is to discuss changes in leadership before resolving differences of opinion over what leaders are actually doing. Without a common understanding of where leadership stands and is falling short, a forceful case for change cannot be made.

Achieving this understanding is the objective of the first step. It takes the form of what we call as-is Leadership Canvases, analytic visuals that show just how managers at each level invest their time and effort, as perceived by the customers of their leadership. An organization begins the process by creating a canvas for each of its three management levels.

A team of 12 to 15 senior managers is typically selected to carry out this project. The people chosen should cut across functions and be recognized as good leaders in the company so that the team has immediate credibility. The team is then broken into three smaller sub teams, each focused on one level and charged with interviewing its relevant leadership customers—both bosses and subordinates—and ensuring that a representative number of each are included.

The aim is to uncover how people experience current leadership and to start a companywide conversation about what leaders do and should do at each level. The customers of leaders are asked which acts and activities—good and bad—their leaders spend most of their time on, and which are key to motivation and performance but are neglected by their leaders. Getting at the specifics is important; the asis canvases must be grounded in acts and activities that reflect each level’s specific market reality and performance goals. This involves a certain amount of probing.

At a company we’ll call British Retail Group (BRG), many interviewees commented that middle managers spent much of their time playing politics. The subteam focused on that level pushed for clarification and discovered that two acts principally accounted for this judgment. One was that the leaders tended to divide responsibility among people, which created uncertainty about accountability— and some internal competitiveness. The result was a lot of finger-pointing and the perception that the leaders were playing people against one another. The subteam also found that the leaders spent much of their time in meetings with senior management. This led subordinates to conclude that their leadersnwere more interested in maximizing political “face time” and spinning news than in being present to support them. 

After four to six weeks of interviews, sub team members come together to create as-is Leadership Profiles by pooling their findings and determining, based on frequency of citation, the dominant leadership acts and activities at each level. To help the sub teams focus on what really matters, we typically ask for no more than 10 to 15 leadership acts and activities per level. These get registered on the horizontal axis of the as-is canvas, and the extent to which leaders do them is registered on the vertical axis. The cap of 10 to 15 prevents the canvas from becoming a statement of everything and nothing.

The result is almost always eye-opening. It’s not uncommon to find that 20% to 40% of the acts and activities of leaders at all three levels provide only questionable value to those above and below them. It’s also not uncommon to find that leaders are under investing in 20% to 40% of the acts and activities that interviewees at their level cite as important.

At BRG, the canvas for senior managers revealed that their customers thought they spent most of their time on essentially middle-management acts and activities, while the canvas of middle managers indicated that they seemed to be absorbed in protecting bureaucratic procedures. Frontline leaders were seen to be focused on trying to keep their bosses happy by doing things like deferring customer queries to them, which satisfied their desire to be in control. When we asked team members to describe each canvas in a tagline, an exercise that’s part of the process, they labeled the frontline Leadership Profile “Please the Boss,” the middle manager profile “Control and Play Safe,” and the senior manager profile “Focus on the Day-to-Day.” (For an example, see the exhibit “What Middle Managers Actually Do.”)

The implications were depressing. The biggest “aha” for the sub teams was that senior managers appeared to have scarcely any time to do the real job of top management—thinking, probing, identifying opportunities on the horizon, and gearing up the organization to capitalize on them. Faced with firsthand, repeated evidence of the shortcomings of leadership practices, the sub teams could not defend the current Leadership Profiles. The canvases made a strong case for change at all three levels; it was clear that people throughout the organization wished for it.

2. Develop alternative Leadership Profiles.

At this point the sub teams are usually eager to explore what effective Leadership Profiles would look like at each level. To achieve this, they go back to their interviewees with two sets of questions.

The first set is aimed at pinpointing the extent to which each act and activity on the canvas is either a cold spot (absorbing leaders’ time but adding little or no value) or a hot spot (energizing employees and inspiring them to apply their talents, but currently underinvested in by leaders or not addressed at all).

The second set prompts interviewees to think beyond the bounds of the company and focus on effective leadership acts they’ve observed outside the organization, in particular those that could have a strong impact if adopted by internal leaders at their level. Here fresh ideas emerge about what leaders could be doing but aren’t. This is not, however, about benchmarking against corporate icons; employees’ personal experiences are more likely to produce insights. Most of us have come across people in our lives who have had disproportionately positive influence on us. It might be a sports coach, a schoolteacher, a scoutmaster, a grandparent, or a former boss. Whoever those role models are, it’s important to get interviewees to detail which acts and activities they believe would add real value for them if undertaken by their current leaders.

To process the findings from the second round of interviews, the subteams apply an analytic tool we call the Blue Ocean Leadership Grid (see the exhibit by the same name). For each leadership level the interview results get incorporated into this grid. Typically, we start with the cold-spot acts and activities, which go into the Eliminate or Reduce quadrants depending on how negatively interviewees judge them. This energizes the subteams right away, because people immediately perceive the benefits of stopping leaders from doing things that add little or no value. Cutting back on those activities also gives leaders the time and space they need to raise their game. Without that breathing room, a step change in leadership strength would remain largely wishful thinking, given leaders’ already full plates. From the cold spots we move to the hot spots, which go into the Raise quadrant if they involve current acts and activities or Create for those not currently performed at all by leaders.

With this input, the sub teams draft two to four “to-be” canvases for each leadership level. These analytic visuals illustrate Leadership Profiles that can lift individual and organizational performance, and juxtapose them against the as-is leadership profiles. The sub teams produce a range of leadership models, rather than stop at one set of possibilities, to thoroughly explore new leadership space.

3. Select to-be Leadership Profiles.

After two to three weeks of drawing and redrawing their Leadership Canvases, the sub teams present them at what we call a “leadership fair.” Fair attendees include board members and top, middle, and front line managers.

The event starts with members of the original senior team behind the effort describing the process and presenting the three as-is canvases. With those three visuals, the tea establishes why change is necessary, confirms that comments from interviewees at all levels were taken into account, and sets the context against which the to-be Leadership Profiles can be understood and appreciated. Although the asis canvases often present a sobering reality, as they did at BRG, the Leadership Profiles are shown and discussed only at the aggregate level. That makes individual leaders more open to change, because they feel that everyone is in the same boat.

With the stage set, the sub teams present the tobe profiles, hanging their canvases on the walls so that the audience can easily see them. Typically, the sub team that focused on frontline leaders will go first. After the presentation, the attendees are each given three Post-it notes and told to put one next to their favorite Leadership Profile. And if they find that canvas especially compelling, they can put up to three Post-its on it.

After all the votes are in, the company’s senior executives probe the attendees about why they voted as they did. The same process is then repeated for the two other leadership levels. (We find it easier to deal with each level separately and sequentially, and that doing so increases voters’ recall of the discussion.)

After about four hours everyone in attendance has a clear picture of the current Leadership Profile of each level, the completed Blue Ocean Leadership Grids, and a selection of to-be Leadership Profiles that could create a significant change in leadership performance. Armed with this information and the votes and comments of attendees, the top managers convene outside the fair room and decide which to-be Leadership Profile to move forward on at each level. Then they return and explain their decisions to the fair’s participants.

At BRG, more than 125 people voted on the profiles, and fair attendees greeted the three that were selected with enthusiasm. The tagline for frontline leaders’ to-be profile (opposite page) was “Cut Through the Crap.” (Sadly, this was later refined to “Cut Through to Serve Customers.”) In this profile, frontline leaders did not defer the vast majority of customer queries to middle management and spent less time jumping through procedural hoops. Their time was directed to training frontline personnel to deliver on company promises on the spot, resolve customer problems, quickly help customers in distress, and make meaningful cross-sales—leadership acts and activities that fired up the frontline workers, were sure to excite customers, and would have a direct impact on the company’s bottom line

“Liberate, Coach, and Empower” was the tagline for middle management’s to-be profile (above). Here leaders’ time and attention shifted from controlling to supporting employees. This involved eliminating and reducing a range of oversight activities—such as requiring weekly reports on customer calls received and funds spent on office supplies—that sapped peo-knowple’s energy and kept frontline leaders at their desks. The profile also included new actions aimed at managing, disseminating, and integrating the knowledge of frontline leaders and their staff. In practical terms, this meant spending much more time providing face-to-face coaching and feedback.

The tagline for the to-be profile of senior management (above) was “Delegate and Chart the Company’s Future.” With the acts and activities of front line and middle managers reset, senior managers would be freed up to devote a significant portion of their time to thinking about the big picture—the changes in the industry and their implications for strategy and the organization. They would spend less time putting out fires

The board members who attended the leadership fair felt strongly that the to-be Leadership Profiles supported the interests of customers as well as shareholders’ profit and growth objectives. The frontline leaders were energized and ready to charge ahead. Senior managers went from feeling towed under the waves by all the middle-management duties they had to coordinate and attend to, to feeling as if they could finally get their heads above water and see the beauty of the ocean they had to chart.

The trickiest to-be Leadership Profile was middle management’s. Letting go of control and empowering the people below them can be tough for folks in this organizational tier. But the to-be Leadership Profiles of both frontline and senior management helped clear the path to change at this level.

4. Institutionalize new leadership practices.

After the fair is over, the original sub team members communicate the results to the people they interviewed who were not at the fair.

Organizations then distribute the agreed-on tobe profiles to the leaders at each level. The sub team members hold meetings with leaders to walk them through their canvases, explaining what should be eliminated, reduced, raised, and created. This step reinforces the buy-in that the initiative has been building by briefing leaders throughout the organization on key findings at each step of the process and tapping many of them for input. And because every leader is in effect the buyer of another level of leadership, all managers will be working to change, knowple’s ing that their bosses will be doing the same thing on the basis of input they directly provided.

The leaders are then charged with passing the message along to their direct reports and explaining to them how the new Leadership Profiles will allow them to be more effective. To keep the new profiles top of mind, the to-be canvases are pinned up prominently in the offices of both the leaders and their reports. Leaders are tasked with holding regular Monthly meetings at which they gather their direct reports’ feedback on how well they’re making the transition to the new profiles. All comments must be illustrated with specific examples. Has the leader cut back on the acts and activities that were to be eliminated and reduced in the new Leadership Profile? If yes, how? If not, in what instances was she still engaging in them? Likewise, is she focusing more on what does add value and doing the new activities in her profile? Though the meetings can be unnerving at first—both for employees who have to critique the boss and for the bosses whose actions are being exposed to scrutiny—it doesn’t take long before a team spirit and mutual respect take hold, as all people see how the changes in leadership are positively influencing their performance.

Through the changes highlighted by the to-be profiles, BRG was able to deepen its leadership strength and achieve high impact at lower cost. Consider the results produced just at the frontline level: Turnover of BRG’s 10,000-plus frontline employees dropped from about 40% to 11% in the first year, reducing both recruitment and training costs by some 50%. The total savings, including those from decreased absenteeism, amounted to more than $50 million that year. On top of that, BRG’s customer satisfaction scores climbed by over 30%, and leaders at all levels reported feeling less stressed, more Energized by their ability to act, and more confident that they were making a greater contribution to the company, customers, and their own personal development.

Keep watching this space to read Part III of this subject.

Acknowledgement: By Chan Kim, Renee Mauborgne

This article was published in Harvard Business Review May 2014

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