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INSEAD Blue Ocean Strategy The Cognitive Hurdle. The cognitive hurdle refers to waking employees up to the need for a strategic shift. In shifting to the new sYategy, the key cognitive issue management faced was getting BI Steel workers to recoguze the need not only to eliminate the iron ore smelting and the roughing mill processes, but also to &ashcally reduce the complexity of other production processes. For example. the iron ore smelting process has been used by BI Steel since its founding and has set the industry standard for decades. With Iron ore smelting being Widespread and used by the company for decades, top management could prect that workers experienced using it would resist the need to change this time-tested process. Foot-dragging and denial could be expected. The Resource Hurdle. The resource hudle refers to the limited availability of resources to implement a new strategy. Executives often assume that the geater the shin in sffategy, the greater the resources needed to execute the shift However, in BI Steel, as in many organizations, resources were being cut, not raised. Due to BI Steel's rapidly deteriorating performance over the last few years, it was now cash-strapped and nmmng out of time. In order to ward off the encroaching creditors, the new division head had to implement the new sfrategy fist without any additional resources. The Motivational Hurdle. This hurdle addresses how to motivate employees and key players to move fast and tenaciously to cany out a break from the status quo_ In order to implement the strategic shift at BI Steel, the new division head had to affect a change in the company' s underlying cult-we to sigmficantly raise workers' sense of ownership. A sense of ownership was clitlcal to get all workers focused on driving down costs while driving up quality and making umovative improvements to the way things got done It was also clitical to the new performance-based compensation that was being put in place. If employees were motivated to implement the new sfrategy their compensahon based on performance would go up, creating a higher level of motivation and with it even better colporate performance. However, if employees were not motivated the reverse could be expected. Traditional change efforts wayuld have called for the issuance of a grand strategic vision to motivate the masses from dae top dourn. However, if employees had failed to see the connection between the vision and theil roles in the company, it would have inspired lip ser.'ice rather than the intended action. Furthennore, the use of time-consunung and costly framing and commumcation programs to satisfy a wide away of motivational needs simply was not an option for BI Steel, where time was of essence and resources were scarce The Political Hurdle. The political hurdle refers to the need to overcome opposition from individuals with powerful vested interests who fear a loss of position or stature as a result of the strategic shift For example, the elimination of the smelting process under the new sffategy made the smelting skill obsolete. Many ofthe workers who excelled at smelting were second- or third-generation smelters who had leamed their skills from the previous generation and had worked in this same capacity their whole career As a result, the management at BI Steel could expect sYong resistance when it came to implementing the new sYategy if management chd not effectively address this hurdle upfront. With BI Steel's conversion from an integrated mill to a mini-mill shucture taking more than a year to accomplish, duruug this time shong opposihon from these detractors could seriously delay, if not derail, the entire implementation of the new sYategy