BOS Presentation to AFP Desert Communities

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Blue Ocean Strategy“Putting Innovation and People

at the Heart of Strategy”

January 20, 2017AFP Desert Communities Chapter

Bill Ballas, M.S., CFRE

2015 WSB, LLC. All rights reserved.

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Blue Ocean Strategy


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www.rednoseday.org


Comic Relief

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Takeaways:BOS Principle

Mini-Case StudiesBOS 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 UsThe 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


8 2015 WSB, LLC. All rights reserved.


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.


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*



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 New Landscape. (2016, December). The Chronicle of Philanthropy.** A Giving Boom in 2017? (2017, January). The Chronicle of Philanthropy.


To Pay for Tax Cuts*

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



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*



Federal Spending*

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



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.*



Other Spending Cuts*

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



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*



How Can BOS Thinking Help?Enabling us to create uncontested market space

for donors and customers.


“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


“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)

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Blue Ocean StrategyMeet the Authors


W. Chan Kim Renee Mauborgne

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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


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

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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 aBOS Simulation?



BOSS In Action


BOSS In Action



BOSS Value Fair In Action


BOSS “Pitch” In Action

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Cirque du Soleil


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Drive Costs Down


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


The Cirque du Soleil Strategy Canvas


A Red Ocean

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Drive Costs Down


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


Yellow Tail “To Be” Value Curve


What Does This Mean to Your Organization?

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Eliminate


Raise

What is Your 4 Action Framework?

Reduce

Create

1. Ignored Factor 2. Taken for Granted Factor3.

1. Below Industry Standard2.3.

1. Above Industry Standard2.3.

1. Factor Industry Has Not Offered2.3.

Cost

sVa

lue


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


And/Or Try “Basic” Moves toward Innovation:

~ Strategic Plan / Community Needs Assmnt.?~ CQI program~ Balanced Scorecard~ Hire a consultant to help negotiate change


BOS Resources: Take a Deeper Divewww.wsballas.com ~ Demo BOS or other sim~ Harvard Business Review article~ White paper on Experiential Learning

www.blueoceanstrategy.com~ Newsletter~ Current Book | New Book


Thank You!

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BOS Presentation to AFP Desert Communities

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