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Where are you this week? We are in Brisbane, and the weather is just fine for mid winter. 
Aditya Godbole, Adrian Leith, Alejandro Rodriquez, Amit Kualagekar, Amjad Shaikh, Anneke Fourie, Ashish Sakharkar, Clare Soper, Darren Bryant, Ebey Philip, Elize Lessing, Ernst Kriek, Girivasan TC, Ibrahim Echu, Janine Claasens, Jary Brenes, Jatine Dhaya, Jummai Hassan, Keenan Malinich, Kim Elliott, Luis Benavides, Nilesh Bhawsar, Nirja Sonawane, Parthasaradhy Vuppalapaty, Rahul Jain, Saakshi Sapre, Saroj Shendey, Sinead Goldman, Stuart Soper, Sumeet Khedkar, Uthman Tijjani, Vikas AtriSince 2006 we have helped qualify more than 25,000 Certified Process Professionals® through the BPGroup open programs – Review the latest www.bpgroup.org
The PEX roadshow continues this week in Sydney.
Monday we have the PEX CPP Levels 1&2 (sorry sold out) and Tuesday and Wednesday the Annual Conference at Dockside. Some terrific case-studies and the Awards programme Tuesday evening.
We will be reporting via #cppmaster and if you can make the trip come on down to: http://www.processexcellencesummit.com.au
When we all thought the earth was flat we didn’t build big ships (why we didn’t need them and could fallen off the ends of the world – who would have been so dumb to do that?).
I explore these more thoroughly in the book Outside In however for now let’s take them in bite sized chunks.
• Understand and applying Process diagnostics
• Identify and aligning to Successful Customer Outcomes
• Reframe where the process starts and ends
• Rethink the business you are in
Let’s start with…
1. Understand and applying Process diagnostics:
(These will be familiar to CPP people however a refresher is always nice)
Earlier we have mentioned Moments of Truth, those all important interactions with customers. Let’s take that discussion further and include other closely related techniques for uncovering the real nature of process – breakpoints and business rules.
Firstly Moments of Truth (MOT) were first identified by Swedish management guru Richard Normann (1946-2003) in his doctoral thesis “Management and Statesmanship” (1975).
In 1989 Jan Carlson, the CEO of Scandinavian Airlines (SAS) immortalized the phrase with his book ‘Moments of Truth’. He clearly linked all customer interaction as the Causes of Work for the airline and set about eradicating non value added MOT’s and then improving those he couldn’t remove.
a) Moments of Truth are a Process Diagnostic
b) They occur ANYWHERE a customer “touches” a process
c) They can be people-to-people, people-to-system, systems-to-people, system-to-system, and people-to-product
d) ANY interaction with a customer is a Moment of Truth
e) Moments of Truth are both process Points of Failure and Causes of Work
Carlson transformed the fortunes of SAS with this straightforward insight – all work in our organisations is ultimately caused by the Moment of Truth. Fix them and you fix everything else.
All Moments of Truth should be eradicated and those remaining improved. In doing so the customer experience is improved, costs are reduced and productivity maximised.
Next let’s review Breakpoints. Breakpoints (BP’s) are the direct consequence of MOT’s and are all the internal interactions that take place as we manage the processes caused by the customer interactions.
a) Any place that a hand-off occurs in the process is a Break Point
b) Break Points can be person to person, person to system, system to person or system to system
c) Break Points are both process Points of Failure and Causes of Work
By identifying BP’s we can set about uncovering actions that would in turn remove them, or if not improve them. BP’s are especially evident were internal customer supplier relationships have been established say between Information Systems departments and Operations. Empirical research suggests that for every Moment of Truth there are an average of 3 to 4 Breakpoints. In other words a process with ten MOT’s will typically yield 30-40 Breakpoints.
All Breakpoints should be eradicated and if not at the very least improved. In doing so we get more done with less, red tape is reduced, control improves and the cost of work comes down.
The third in our triad of useful Outside-In techniques is Business Rules.
Business Rules are points within a process where decisions are made.
a) Some Business Rules are obvious while others must be “found”
b) Business Rules can be operational, strategic or regulatory and they can be system-based or manual
c) Business Rules control the “behavior” of the process and shape the “experience” of those who touch it
d) Business Rules are highly prone to obsolescence
e) We must find and make explicit the Business Rules in the process
Business Rules (BR’s) are especially pernicious in that they are created for specific reasons however over time their origin is forgotten but their effect remains. For instance one Life insurance company had a delay of eight days before issuing a policy once all the initial underwriting work was complete. This has a serious impact on competitiveness as newcomers were able to issue policies in days rather than weeks. After some investigation it was discovered that the ‘8 day storage’ rule was related to the length of time it takes ink to dry on parchment paper. This rule hadn’t surfaced until the customer expectations changed. There are many examples of previously useful rules evading 21st century logic and blocking the achievement of successful customer outcomes. All Business Rules should be made explicit and challenged in todays context.
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Next time we’ll take a look at the second way to radically redefine process:
Outside-In is more than a series of tools and techniques to view and improve our business. It is designed as ‘practical thinking’ or a ‘business attitude’ to be orientated to as much of the business that the practitioner or management requires. If implemented to the greatest degree then a company may design and represent its organisation charts around the customer with the customer as the driving central theme. It may represent performance measures using Outside-In measures as its KPIs.
How many changes to the way we do business seem obvious once we have identified what they are but somehow eluded us when we are looking at our businesses as a ‘haystack’ of processes?
When we move from high level management representations to process detail, a much more complex picture emerges which we have defined on the basis on that’s what we do. But if we look at that process again from the customer viewpoint then the process is very different. Outside-In shows that the way we traditionally view process is an illusion and prevents us from viewing business in a way to enable significant change.
Viewing what we do from the perspective of the customer enables us to think of performance change initiatives that would never been possible if we had studied our business from the traditional left to right top to bottom basis inherited from the industrial change.
There are a number of key supporting themes – the first is “Exclusive focus on Successful Customer Outcome (SCO)”
The approach, distilled from global leading companies, is Customer Expectation Management
Method (CEMMethod), has a set of principles and philosophy that ensures everything you do is aligned to and improves the SCO. CEMM helps an organization bring their processes, systems, strategy and people into ‘outside-in’ alignment.
Every company in business will have an SCO to a degree – they have to otherwise customers would not buy. OI is built on the philosophy that the better a company impacts its SCO the greater proportion of available business its going to win as a result. Further applying the thinking takes you to places (ie business opportunities) that competition has never been able to exploit and perhaps never thought about.
Apple are producing apps that people never thought they needed whereas Nokia who have built what they believe is technology superiority has had to re-think their approach to business amidst falling revenues and margins. Southwest are close to the era of the free flight ticket and enjoying consistent profitability whereas British Airways are going through possibly the worst business fortunes in its history.
OI is designed on the premise if a process or operation does NOT contribute to the Successful Customer Outcome – you don’t do it! On first analysis this may appear difficult to rationalise – most organisations have non-customer facing departments – how can the principle of the SCO still apply?
If you think about it, an airline is a business which are made up of the same commodity components – similar aeroplanes, customers with roughly the same wants/needs, airports with the ability to offer the same services (if they choose) – yet some operators are flying high and others are sinking towards government bailout or bankruptcy. Both SouthWest and BA will claim customer centricity but OI defines the important outcome components that are critical to business success and under this lens it becomes very clear that BA is left wanting.
delivering Successful Customer Outcomes.
There are many accreditations in the process space. This BP Group community is sponsored by www.bpgroup.org which in turn advocates the Certified Process Professional qualification ( http://www.certifiedprocessprofessional.com ).
There are five levels of recognition:
• Certified Process Practitioner (CPP-Practitioner)
• Certified Process Professional (CPP-Professional)
• Certified Process Master (CPP-Master)
• Certified Process Advanced Master (CPP-AdvMaster)
A significant part of that hands-on learning is focused on Outside-In and includes discussion of various methods such as CEMMethod
The Annual BP Group conferences have a strong flavour of Outside-In with notable organisations who are the pioneers of Outside-In present and delivering case studies, tutorials and workshops. Not least of which is Steve Towers book – Outside-In,
now in its fifth edition ( http://www.outsideinthesecret.com )
When they talk about their operations
> Operations, structures and business flows are becoming ever more complex
> The process of change is becoming ever more complex as the obvious improvements are delivered and the focus is on looking for new improvements often with diminishing returns
> A significant proportion of change projects under-perform and do not achieve the desired outcome
> There are so many alternative methods to effecting change out there it is difficult to select which one makes most sense for my business
When they talk about their overall business performance
> I fundamentally believe I offer a superior product and/or service but I’m still struggling to make the returns I believe possible
> I strive to be a market leader, I believe we have the capability to be a market leader but the issues above prevent me from getting there
> It is difficult to markedly cut my costs without impacting my service levels
> The impact of the global recession has affected my business and our fortunes won’t markedly improve until the business environment improves.
There may be additional comments however this is typical of observations from companies all over the world. And it is getting worse.
It isn’t though we don’t have choice in improvement approaches. As of 2010 there were over 6000 improvement methodologies all geared to helping organisations improve performance. How do you decide which one works best? How do you ensure sustained business improvement when the average CEO in the 21st century lasts 3 years and each new regime brings fresh ideas but a lot of the same issues?
(Blue BPM, Red SixSigma)
So at first glance BPM is in the ascendency, SIx Sigma declining, however let’s factor in Lean for the same period against BPM.
This time we see BPM flat against a more volatile Lean, however Lean had its greatest interest back in 2007.
A much more interesting trend, which impacts all three aspects of Process Excellence is the recent emergence of Customer Experience Management. WIth progressive PEX types pushing the boundaries of process Outside-In rapidly, the migration to “the customer experience is the process” seems well established.
Is CEM the natural evolution of PEX? It certainly seems so.
