Category: BPM

Gaining Customer Insight

(Whether they are the primary customer who pays your salary or the one in the department next door!)
  1. Identify the Issue/Opportunity and determine the Process to Review. 
  2. Decide who is the Customer.
  3. Understand the Customers current expectations.
  4. Clarify the customers view of what is a successful outcome.
  5. Identify what it is the process currently does that impacts customer success (negatives and postives).
  6. Develop SMART Successful Customer Outcome Statements of Intent.

Successful Customer Outcomes & Process Excellence

Creating Successful Customer Outcomes (SCO’s) must begin with the understanding that process is a means to an end, not an end of itself. I do not want a doctor, a medical or a diagnosis. What I need is to get well.
We also should avoid another trap. That is capturing requirements on the solution rather than describing customer needs. All the customer focus groups, surveys and quality reviews are looking at current stuff, not on the SCO. Therefore they are limited and may even completely derail customer delivery, sometimes with tragic consequence.
Processes that clearly align with SCO’s achieve five times the success rate of processes that have a poor fit with customer need.

The Future of Business Process Part 2: Outside-In, Lean Six Sigma, BPM and all that….

“Not everything old is bad and antiquated and not everything new is shiny and good. The real secret to success is to combine the best of both.”
Rene Carayol (left),  Senior Executive & Former Board Member for Pepsi, Marks & Spencer, IPC Media & The Inland Revenue

The world’s leading companies have come to realize that only when their customers are successful, will they be successful. In pursuit of their market leadership not only they need to spend time to look inside their business to know how things are getting done but also look outward to get deep understanding of their customers.

Process has indeed come a long way from it humble routes amidst the early industrial revolution and Adam Smiths ‘Wealth of Nations’.

Although many in Western
economies are (still) in a state of denial, we are undergoing the greatest reorganization in the business world since the Industrial Revolution.

No matter what industry you are in, no matter how successful you are, it’s time to get ready for the world as it will be –a world where your customers have new choices
from a sea of suppliers from
across the globe.

Peter Fingar
  Author of Extreme Competition: Innovation and the Great 21st Century Business Reformation
 

One of the first people to describe process was Smith who in 1776 describes a new way for process in a Scottish pin factory. He outlines the production methods and created one of the first objective and measureable enterprise process designs. The consequence of ‘labour division’ in Smith’s example resulted in the same number of workers making 240 times as many pins as they had been before the introduction of his innovation.

Adam Smith participated in a revolution that transformed the planet. He lived at a time when the confluence of factors, political change, emergence of the New World, industrialization and a new optimism that the world could move from the shackles of the past.

In heralding a movement that developed into Scientific Management the foundation was laid that established a way of working that has survived and thrived for 200 years.

And yet now, more than ever, is a time to perhaps take a careful glance back to the past to guide the way for not only surviving the current economic turmoil but to also prepare us to thrive in the seismic shifts of the 21st century ‘new world’ order where the customer has become central to everything we do.

Leading global corporations are now evolving their tried and tested approaches into methods suited to the changed challenges of customer promiscuity, globalisation, IT innovation and the Prosumer. That is the essence of what we call Outside-In.

“The Customer Experience is the Process”
Outside-In can really be summarised in the statement that “the customer experience is the process”.  We can no longer just look within our organisation boundary to create a sustainable competitive advantage. We have to extend our scope and embrace a broader view of optimising process by understanding, managing and developing customer expectations and the associated experience. We need to articulate Successful Customer Outcomes and let those guide our product and service development as we move beyond the limiting scope of silo pyramidal based left to right thinking.

In 2006 BP Group Research identified the ‘Evolution of Approaches’ and how steps can be taken to grow Lean Six Sigma’s influence and success into a strategic Outside-In toolkit. In fact the last 4 years are seeing the fruition of these advances with Best in Class 2009 & 2010 Award winners PolyOne, a dyed in the wool Lean outfit, advancing their stock price six fold in 18 months on the back of radical and innovative changes across its customer experience.

Some see Outside-In as the death knell for approaches such as for old style BPM, BPR, TQM and Lean Six Sigma. This is not so. This narrow and simplistic view does not acknowledge the stepping stones available to embrace the new customer centric order. In fact the foundations of our futures are always laid on the learnings of the past with those innovators who recognise the need to evolve leading that charge.

Victory will go to the brave who seize the moment and push forward their approaches into the brave new world of Outside-In. The sector leaders have set a precedent – can you embrace the challenge?

All the Best, Steve

* * *

If you wish to read and listen more on this theme the following references are useful.
Join the community discussing these issues, challenges and opportunities.
Community and social networking – Join the BP Group
LinkedIn
Outside-In The Secret of the 21st Centuries leading companies
Book
Interview Harvard Business Review with HBS
Professor Ranjay Gullati
Video
http://bit.ly/RanjayOutside-In
Interview Wharton Business School with WBS Professor George Day
Video
http://bit.ly/WhartonGeorgeDay
Interview Affecto University with Steve Towers
Video
http://bit.ly/SteveTowersOutside-In
Interview by Megan James (IQPC)
Video
http://bit.ly/MeganJamesOutside-In
Downloadable keynotes and slide shows
Presentations
http://www.slideshare.net/stowers/
Professional – Certified Process Professional program
Qualifications
Don’t give customers what they think they want – Steve Towers
 Article
Evolution of Process Excellence Approaches – BP Group
Research
Outside-In – Interview with Blog Radio’s Gienn Weiss
Podcast
The Best Performing companies Millward Optimoor
Research
UPCOMING CONFERENCES ON THE THEME OF PROCESS EXCELLENCE, ENTERPRISE BPM AND OUTSIDE-IN
Resources

Outside-In is a business imperative

What are the challenges of succeeding in business in the 21stcentury? Ask leading companies and you would come up with the same list: 
  • Competition is fierce and global. 
  • Customers have become rebellious.
  • Customers are promiscuous
  • Customers have expectations like never before. 
  • Customers demand choice, comprehensive information and the best price.   
  • Customer know more about your service and product than you do (the prosumer)
Former IBM boss Lou Gerstner called this “commodity hell” and that is pretty much the nightmare for every business. With a list like this many businesses would claim to be already embracing the challenge and becoming customer centric with ‘voice of the customer’ initiatives.
This is simply a collective delusion and is the root cause of why so many are failing the customer, the shareholder and their hardworking employees. 

The delusion is easy to understand. Businesses have created departments that claim customer focus and extensively poll customer wants, seek feedback and then try to act on the information. 
While this creates an illusion of progress it is to a large part a futile exercise focused on fundamental misunderstanding of 21st century customers. 
Asking internal questions based on customer data results in such questions as “how do we improve service?”, “how can we reduce non value added work?”, and “how can we standardise?”.
This thinking stems from a time when the world turned more slowly and is more appropriate to the 1950’s then this centuries new business reality. To orientate to long term business and customer success we need to look at the enterprise from the Outside-In (OI) rather than inside-out. It is now about understanding customer needs (not wants) and eradicating all the things that do not contribute to achieving Successful Customer Outcomes (SCO’s). 
    
It is this Outside-In philosophy that leading global IT retailer Best Buy utilised to lead and dominate the consumer-electronics market in the US. In doing so Best Buy’s programme ‘customer centricity’ took the time to understand customer needs and accordingly align for the SCO, while long time competitors Circuit City and CompUSA struggled and ultimately went bust. Circuit City, previously successful in the 1980’s and 90’s did not understand the shift to Outside-In and continued to focus on reducing costs through laying off its highest-paid hourly employees, including salespeople, and replacing them with cheaper workers. At the same time (2007), then CEO Philip Schoonover rewarded himself with $7 USD million in compensation[i]. Customers don’t like that old style way of managing business and voted with their feet.
Best Buy meanwhile moved to understanding the customer needs and directed their attention organising themselves accordingly. Early research suggested that men look for a specific product at a discount price so hence, arranging stores around fast moving products, geared to guys worked in areas where the majority of shoppers were male. Alternatively in stores frequented by women the stores focussed on ‘bundles’ as women were shown to need say a digital camera with accessories such as cables, printer and other ‘value adds’. This was more important to that type of customer than discounted prices. As the Outside-In maturity grew audio-visual experiences were grouped together and themed as with the Magnolia theatre. Family oriented areas are now a familiar feature coupled with additions such as techie savvy Geek squad means Best Buy dominates a previously fragmented market. Their success is now being extended to Europe.
Making the leap from understanding to action requires a shift in perspective. Instead of functional specialist silo’s organised around division of labour and specialisation, enterprises rethink their centre of gravity. In what we call a Copernican shift the customer becomes the centre of the universe, rather than the legacy model were business organises itself inside-out as a pyramidal, left to right, top down structure.  In these legacy structures it is sometimes difficult to actually include the customer on the map – they are relegated to the extreme left or right, or into warlike metaphors such as ‘the frontline’. No great surprise that people working in these structures can be working very hard doing things right (following procedures, delivering projects, meeting departmental objectives) but really the customer isn’t their job. That surely belongs to someone else in marketing, sales or customer service? In the Outside-In world the customer touches everybody’s  job and the emphasis shifts to doing the right things and doing things right.
Breaking out of the straight jacket imposed by the inside-out organisation structure requires a different level of thinking, an incisive set of new techniques and tools, and a willingness to link every element of activity with SCO’s. A new focus embracing the customer experience as the process requires a renegotiation of partners, a realignment of relationships and investment in staff to ensure they can think and be customer centric. Reward structures become linked to customer success, rather than paying staff for turning up and following procedures.
Best Buy have broken the mould of their sector, as have others including Zara in fashion retailing, Southwest airlines, FedEx Office, Emirates, China Mobile, Disney and many more. These companies are the leading success stories of the 21stcentury and understand the game has changed forever.
For most businesses today, adopting an Outside-In approach is a necessity for survival — the only sure way to ensure the organizational resilience that will keep a company out of the death spiral of inside-out commodity hell. The path finders have set the standard and established a winning set of approaches, tools and techniques readily accessible by all. 
You may want to make that move now, before it is too late.

Enterprise BPM & Outside-In Resources – videos, presentations and upcoming conferences

OUTSIDE-IN OVERVIEW: http://www.successfulcustomeroutcomes.net/2011/04/outside-in-and-its-potential-with-steve.html

HARVARD PERSPECTIVE: https://businessprocess.box.net/shared/zqb1z083ub

WHARTON PERSPECTIVE: https://businessprocess.box.net/shared/tshqkxkdqe

FOLLOWING BLOG/ARTICLES: http://www.successfulcustomeroutcomes.net/

MANAGEMENT GURU’S: http://linkd.in/ManagementGurus

THE STATE OF THE BPM INDUSTRY http://bit.ly/BPM_StateoftheIndustry

STEVE TOWERS PRESENTATIONS: http://www.slideshare.net/stowers/

IQPC BUSINESS EXCELLENCE SUMMIT
Delhi, India, September 22-23: http://bit.ly/IndiaBPM

IQPC BPM LEADERS MEETING
Amsterdam – October 20-21: http://bit.ly/rhqLHP
Leaders Blog http://bit.ly/p6AIuI

IT WEB ANNUAL CONFERENCE
Johannesburg – October 12-13: http://bit.ly/SouthAfricaBPM

STRATEGY DRIVEN PERFORMANCE IMPROVEMENT
London – December 5-8: http://bit.ly/StrategicTransformation

BPGROUP CONFERENCE IN ASSOCIATION WITH IQPC – PEX 2012
Lake Buena Vista, Florida – Jan 16-19: http://bit.ly/PEX2012

Are you in the shadow of a Scottish Pin Factory?

What is this?
Yes it is YOUR organization chart.

It is also a legacy from the Industrial Revolution and notably Adam Smith’s book “The Wealth of Nations” (1776). Are you organizing yourself like a Scottish pin factory or more realistically for the second decade of the 21st century?

Someone who takes a sideways swipe at the ‘sub division of labor’ is Seth Godin.

Have a glance at his most excellent blog:
http://bit.ly/BPM_Org_Charts

The future of Business Process. What is your take?

Forrester and Gartner, those behemoths of Business Research, are battling for the mindspace associated with that question at the moment.

Forrester leader Connie Moore has just posted the current trends, based on latest research with “10 major thought leaders at large global organizations” and include the following seven points:

  • A major strategic alignment between business process transformation and customer experience
  • Very little concern about technology issues — because they believe the technology will work well (and this is not what keeps them up at night even now)
  • A major focus on standardizing processes across the globe so that work can easily flow to the lowest-cost labor at any given moment
  • The belief that processes will run in the cloud (private or public) and that businesses will consume processes-as-a-platform
  • A strong conviction that IT will largely vanish into the business
  • The need for access to global talent pools driving some of the need for business process transformation
  • The expectation that being dynamic and turning on a dime will be critically important
What I will say is that for those of us busy linking Successful Customer Outcomes (SCO) with process for the last several years that first point is no great surprise. Mind you I can also think of some supposed major thought leaders who are still blind to the reason why all our jobs exist – the customer. Aligning everything we do to SCO’s is about connecting the dots between every task and activity all the way to the customer. Jeff Bezos (Amazon) refers to it as ‘working backwards’ aka Outside-In.

I certainly give the thumbs up to Forrester for this efforts, especially since the next couple of weeks sees a couple of Forrester hosted webinars to share their views. Interestingly now Gartner will have to respond otherwise they will see themselves as sidelined into little more than the technical aspects of BPM.

Go read Connie Moores blog at: http://bit.ly/BusinessProcess2020

Do you agree with the points Forrester is making? Contribute to the LinkedIn thread on this theme at:

Recommended Upcoming ‘be there’ events to meet, share and learn:

BPM Leaders hosted by PEX: 
Amsterdam – October 20-21: http://bit.ly/rhqLHP
Leaders Blog http://bit.ly/p6AIuI 
MasterClass (Led by Steve Towers)
Barcelona – October 3-7 – Certified Process Professional & Master: http://bit.ly/MastersInBarcelona

BPGROUP CONFERENCE IN ASSOCIATION

WITH IQPC – PEX 2010
Lake Buena Vista, Florida – Jan 16-19: http://bit.ly/PEX2012

 

A New Order of Things – Outside-In – Six steps to Success

There is no easy way to introduce a new order of things however there are some principles that can be followed based on this type of mind shift.

1, Objective and immediate.
The results we achieve with Outside-In are significant and substantive e.g. Triple Crown*. Accordingly any effort should first of all identify the clear tangible benefits.

2. Talk is cheap.
Fine words and phrases will not win hearts and minds without substance. Delivery is key, hence the ‘start where you are’ sentiment. In current projects (where support may be lacking) introduce the techniques within the CEMMethod(tm) by stealth.
Lift the heads of those around you to think of Moments of Truth, Break Points and Business Rules for instance. “Nothing new mate, just some stuff other guys have used within… Six Sigma../..Lean../..EA../..complaince etc. (delete as appropriate)”

3. Build support.
With (2) underway you will build support. That is the point to shift focus and begin the more practical discussion of where and how.

4. Go for broke.
If you are extremely lucky/persuasive and have the top team already onboard go for broke. Discover the worst most problematic issues and set to righting ’em. By fixing the Cause you will remove the Effect.

5. Move on.
It is a 4-500 year shift in mindset (Dee Hock, VISA founder).
It will ultimately transform the planet. The jury is in fact back and the results speak for themselves. So when all looks desolate and casting your pearls before swine is depressing, remind them that they are part of the problem and move on.

6. Make it so.
YOU ARE NOT ALONE it just feels that way when surrounded by flat-landers (doh).
Learn, exchange and do.

Join the worlds first and largest Outside-In community at: http://www.oibpm.com

Once on-board review the subgroups and join the specialist communities – you will
find friends and support as we transform the planet one person,one process, one organisation at a time!

PS. The Outside-In book published in 2010 reviews in detail this emerging trend.
Here is the hardback – http://amzn.to/Outside-In
Here is the eBook version – http://bit.ly/OutsideInApple Link with Steve Towers – http://bit.ly/LinkWithSteve
Follow Steve Towers on Twitter – http://twitter.com/#!/stowers

*Triple Crown: Jim Sinur (Gartner) coined this phrase. Through the delivery of advanced BPM you will simultaneously reduce costs, enhance service and grow revenues. In public sector/not for profits replace revenue growth with delievry of strategic objectives.

Links to Enterprise BPM and Process Transformation resources

Where do you go for uptodate and relevant resources for Enterprise BPM and Outside-In?

Here’s a collection utilised by Certified Process Professionals with an acletic mix of tools, techniques, downloads, videos and links to key people in the world of process and customer transformation.

If you have an additional link do let us know.

1 BP Group website http://www.bpgroup.org
2 BP Group on Linkedin http://bit.ly/joinbpgroup
3 Coaching in Customer Expectation Management & BPM http://www.bpmbox.com
4 Certified Process Professional web http://www.certifiedprocessprofessional.com
5 Enterprise BPM Outside-In blog http://www.successfulcustomeroutcomes.net/
6 BPGroup blog http://bpcommunity.blogspot.com/
7 BP Group slideshows http://www.slideshare.net/stowers/
8 Twitter http://twitter.com/#!/stowers
9 Videos on the theme of Enterprise BPM & Outside-In http://bit.ly/SteveTowersYoutube
10 Resources and people involved in BPM & Outside-In http://www.oibpm.com
11 BPM & Outside-In consultancy website http://www.towersassociates.com
12 Outside-In. The Secret of the 21st century successful companies http://bit.ly/OutsideInApple

Public Services and Enterprise BPM aka Outside-In

In many countries, the phrase public service is considered something of an anachronism. At all levels of government and government led services, customers perceive that overall they get a raw deal when compared to the levels of service they now regularly expect from privately held organizations. In this article we will explore how Customer Age thinking and the concepts of Successful Customer Outcomes and Next Practice are helping to change that perception and lead to increased efficiency in public services around the globe.

With regard to the issues of local, regional, or national government we firstly need to remember that in a democracy government is of the people, by the people, with the will of the people. As governments increasingly raise taxes and start to play a more active role in the everyday lives of people there is a real risk that if they do not focus on their “customer” and what the customer wants, that they might lose that will. So for government departments at all levels there needs to be very clear on who the customer is and what they want. In this they are no different from a private enterprise, customers do not care about your internal bureaucracy or your policies and procedures, they do care about being able to access your services in an efficient manner and know that they are being cared for.

Nobody is suggesting for one moment that you can please everybody. But if those that you are not pleasing are displeased through poor service or overly complicated procedures and policies then they have in most cases good cause to complain. Indeed, employees in the public sector would do well to remember that it is their tax money that is being potentially wasted too!
Many people might feel that government and public sector is “different” and that the same rules cannot apply. To a small extent this may be right, but in the majority of cases fresh thinking can still lead to increased service and efficiency.

Take the case of a police force. While recently working with a regional police department the point was raised, that they are a very different business, and unlike anything in the private sector. This is typical of the inside out thinking that tends to occur in public service. It we look at it from the outside in, the police force could be considered rather like an insurance company. The parallel is quite a simple one. With insurance we pay a monthly or annual premium to a company on the promise that if something goes wrong we can contact them and they will sort it out – cars, home, or life. So in the case of the police we pay taxes each month (our premium) so that if something goes wrong we can contact them and they will send someone to help us – surely this is just the same, from the customer point of view, as the insurance scenario? The same also of course can be said of the fire and ambulance services. Why then can such services not look at what insurance companies are doing in order to improve service and responsiveness?
As a side issue in another discussion with a different police service the issue of customer became apparent in a different way. In this force they felt that the way they had been organized was to ensure that they provided the best service to their customer, it was just that in their case they saw the criminal as the customer, not the victim! So when identifying your customer you do need to be clear on your purpose in order that you are serving the right customers.

The example of the emergency services given here is a good example of how “Outside-In” can be applied in the public service and how in looking for new and innovative ways to improve service and increase efficiency the public sector can benefit from looking at how the very best people are handling that situation, regardless of geography or industry sector.

The parallels do not end there though. Those familiar with the Beatles may recall a song from Sergeant Peppers Lonely Hearts Club Band (an older but a goody) and a track mentioning 4,000 pot-holes in Blackburn, Lancashire. The song related John Lennon’s curiosity at how many pot-holes would it take to fill the Albert Hall (a particular large musical venue in central London) and indeed why were there so many holes? Well clearly at that time he had never visited Chicago as they have enough holes to fill the Grand Canyon!

The story of how the Chicago Works Department transformed a moribund public service (fixing said potholes) which typically took 6-8 weeks, involved up to 30 people, and on average cost an incredible $42,000 USD is now becoming legend in BPM parlance.

The full story of the fix will wait for another day however the quantum leap here with Outside-In and Successful Customer Outcomes drew its inspiration from Expedia. Daniel Pink (A Whole New Mind) would be proud of the right brain thinking which imported Expedia’ scheduling ‘idea’ to let citizens define the problem, chose a suitable repair and select a convenient date for the repair team fix from a two screen web based system. Problem fixed. Now on average 4 days, 5 people and $2,000 USD. That still seems a lot (especially for tax payers) for filling a hole but boy is it giant step in the right direction!

Of course we can extend this thinking even further into many walks of public service. Where would you start your Outside-In endeavors?