BOS Presentation to AFP Desert Communities

Blue Ocean Strategy
“Putting Innovation and People
at the Heart of Strategy”
January 20, 2017
AFP Desert Communities Chapter
Bill Ballas, M.S., CFRE
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Copyright © 2015 WSB, LLC. All rights reserved.

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Blue Ocean Strategy

www.rednoseday.org
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Comic Relief

Takeaways:
BOS Principle
Mini-Case Studies
BOS Techniques & Tools to Use
Punctuated Equilibrium
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Why? BOS
Cuz It Promotes Renewal!
Change/Renewal
~ Change is constant – it’s how we keep up w/ the world’s
challenges.
~ Innovation is how we get ahead of those challenges.
~ Innovation is not deemed successful w/out commercial
success.
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BOS Overcomes Us
The Three Brain Barriers
~ Failure to see the need for change.
~ Failure to move. We’d rather do something familiar – even
useless – than something new & unfamiliar.
~ Failure to finish. We see the need but don’t know how to change.
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Why Is BOS Thinking Needed?
Strategic Planning
Chronicle of Philanthropy
~January 2017 issue
~December 2016 issue
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Changes to the Charitable Deduction*
~ Mr. Trump campaigned on capping write-
offs for charitable donations
~ $100k for single persons*
~ $200k for families*
~ R leaders in Congress want to limit the
Charitable Tax Deduction – some Rs & Ds don’t*
* A New Landscape. (2016, December). The Chronicle of Philanthropy.

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Changes to the Standard Deduction*
~ Currently: people can subtract a set amount
of their taxable income without itemizing*
~ But, if they can save more by not using the
standard deduction, fewer will itemize thus
eliminating an incentive to give*

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Tax Cuts for the Wealthy & Middle-Income*
~Long-Term: If the wealthy have more money to
give they may give more*
~ 2017 bump
~ Short-Term: Will cut donations from the wealthy
by 4.5% to 9%*
~Tax cuts have the biggest impact on those who
make pledged gifts**
** A Giving Boom in 2017? (2017, January). The Chronicle of Philanthropy.

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To Pay for Tax Cuts*
~ Eliminating tax credits for renters, child care, etc.*
~ Reductions in all non-military spending*

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Federal Spending*
~ Mr. Trump campaigned on a “Penny Plan”
promising to cut Federal Spending $1.2T
over 10 years*:
~ End the “budget détente”*
~ Lift caps on military spending*
~ Cut non-defense spending 1% year for 10 years*

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Federal Spending*
~ Mr. Trump campaigned on:
~ Repealing Obamacare*
~ Turning Medicaid into a block grant program*
~ A $1T transportation/infrastructure program*

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Federal Spending*
~ R House and R Senate Leaders want to:
~ Repeal Obamacare*
~ Privatize/Make Medicare a Voucher Program*
~ Cut “every” domestic federal spending program including
food stamps, affordable housing, support for homelessness,
public education, early childhood education, etc.*

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Other Spending Cuts*
~ Spending Cuts on programs for:
~ Women, Racial Minorities, Immigrants, Refugees,
International Aid, Human Rights, Rural Populations *

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Nonprofit Political Activities*
~ Mr. Trump campaigned on repealing the
Johnson Amendment:
~ JA prohibits 501(c)(3)s from endorsing or campaigning
for political candidates
~ Proponents: JA impinges on free speech and
should allow for political expression in the
course of “normal activities”*
~ Opponents say it would dramatically alter how
nonprofits would raise and spend money*

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How Can BOS Thinking Help?
Enabling us to create uncontested market space
for donors and customers.

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“We’re a 501(c)(3).
We don’t have the resources to innovate.”
“Innovation isn’t about the money you have.
It's about the people you have, how you're led,
and how much you ‘get it’."
-- Steve Jobs

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“We’re a 501(c)(3).
We don’t have the resources to innovate.”
"I think frugality drives innovation, just like other
constraints do. One of the only ways to get out of a
tight box is to invent your way out."
-- Jeff Bezos
(founder of Amazon)

Blue Ocean Strategy
Meet the Authors
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W. Chan Kim Renee Mauborgne

Blue Ocean Research
~ Based on a decade‐long study of 150 strategic moves
spanning more than 30 industries over 100 years.
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Red Ocean Strategy
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Blue Ocean Strategy
~ Compete in Existing Market Space ~ Create Uncontested Market Space
~ Beat the Competition ~ Make the Competition Irrelevant
~ Exploit Existing Demand ~ Create & Capture New Demand
~ Make the Value-Cost Trade-Off ~ Break the Value-Cost Trade-Off

Blue Ocean’s “6 Paths”
~ Reconstruct Market Boundaries
~ Focus on the Big Picture, not the Numbers
~ Reach Beyond Existing Demand
~ Get “Strategic Sequence” Right (e.g., Value Proposition)
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What Happens at a
BOS Simulation?
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BOSS In Action

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BOSS In Action

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BOSS Value Fair In Action

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BOSS “Pitch” In Action

Cirque du Soleil
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Drive Costs Down
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Raise/Create Value
~ Eliminate Star Performers, Aisle ~ Create Multiple Productions,
Concessions, Animal Acts Artistic Dance, Themes
~ Reduce Danger and Thrill ~ Raise Performance Control
~ Reduce Humor and Fun
Cirque du Soleil: 4 Actions Framework

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The Cirque du Soleil Strategy Canvas

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A Red Ocean

Drive Costs Down
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Raise/Create Value
~ Eliminate Wine Jargon, Mass ~ Create Fun & Adventure, Easy
Advertising, Aging Quality Drinking, Ease of Selection
~ Reduce Vineyard Prestige, Wine ~ Raise the Price
Complexity, Range of Offerings
Casella Wines/Yellow Tail:
4 Actions Framework

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Yellow Tail “To Be” Value Curve

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What Does This Mean to
Your Organization?

Eliminate
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Raise
What is Your 4 Action Framework?
Reduce
Create
1. Ignored Factor
2. Taken for Granted Factor
3.
1. Below Industry Standard
2.
3.
1. Above Industry Standard
2.
3.
1. Factor Industry Has Not Offered
2.
3.
CostsValue

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Make Innovation Happen:
~ Include Blue Ocean thinking in your strategic
retreat/planning
~ Help your leaders practice “winning” BOS moves
with the simulation
~ Involve your leaders in growth strategies using
BOS principles to create value and lower costs

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And/Or Try “Basic” Moves toward Innovation:
~ Strategic Plan / Community Needs Assmnt.?
~ CQI program
~ Balanced Scorecard
~ Hire a consultant to help negotiate change

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BOS Resources: Take a Deeper Dive
www.wsballas.com
~ Demo BOS or other sim
~ Harvard Business Review article
~ White paper on Experiential Learning
www.blueoceanstrategy.com
~ Newsletter
~ Current Book | New Book

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Thank You!

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