Outside-in approaches create a completely new reality that reshapes how we manage and organize work so much so that functional pyramidal structures become artifacts of the past.
Born in the complexity of the 21st century Outside-In companies believe that all effort in an organization should be centered around the customer and ultimately deliver Successful Customer Outcomes (SCO).
Part of the insight of Outside-In companies is the identification of work that does NOT contribute to the SCO and accordingly may be ‘dumb stuff’ – work that can be eradicated and removed. In doing so Outside-In wins the triple crown of simultaneously reducing costs, enhancing service and growing revenues. Leading practice organizations include Apple, Southwest airlines, Google, Samsung and Zara. In our book “Outside-In – The secret of the 21st century leading companies” we review many examples and lay the foundations for systematic approaches to enable Outside-In thinking and practice by all.
“It is about establishing one guiding principle that goes from the very top down to the smallest branch. Our employees who deal with customers every day understand their needs and do the best for them – this customer-focused DNA needs to run throughout the bank. We need to remember – and then never forget – that the customer is why we are in business. We need to change our behaviour at every level to reflect this simple truth. To move from stability to renewal, we need to first address and then clean up every aspect of how we treat customers.” The Royal Bank of Scotland’s (RBS) CEO Ross McEwan.
He’s been at the helm of RBS, once very briefly the worlds largest bank, for 18 months. Prior to this, he was the group executive for retail banking services for the Commonwealth Bank of Australia (CBA) for five years. A New Zealander is the man from down under going Outside In?
CBA have certainly transformed and regularly outperform their peers. One of our favoured measures of ongoing success, the triple crown (simultaneously reducing costs, improving service and growing revenues) suggests he has what it takes. 18 months in and we should start to see the results. He can talk the talk, now can he really deliver for RBS. We will let you know next month 🙂
There is a saying that the map is not the territory. And yet so many treat their representation of the world as fact and reality. When you draw a process and agree with others that is how it looks just because you may all agree doesn’t make it real. It is just a collective hallucination. It is an abstract of reality.
Does your world always flow top to bottom and left to right, or is it more real than that? KBO, James Dodkins
Do you feel, as a customer, like a nuisance to be endured? You are the disruption to a good days sleep in so many inside-out companies. The fact you pay their salaries is accepted under sufferance and they do the level best to avoid directly dealing with you, locking you into automated lines with interminable messages about how important service is.
These clumsy organizations even go to conferences now for advice on how to avoid dealing with customers; how to market to them in the automated lines and worst of all how to get you repeating your calls over and over. Feels wrong? Yes it should.
Our research suggest the answer is simple for progressive companies. Just answer the phone and talk with your customer.
In many countries, the phrase public service is considered something of ananachronism. 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 he 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 ³customer² 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 ³different² 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 ³Outside-In² 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 Lennon¹s 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 Expedia¹ scheduling idea¹ 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?
If you haven’t noticed already, your customers have so much more power at their disposal. They’re well informed. They can easily compare your prices with those of your competitors. And they’re vocal when things don’t go well. So what does this mean for process professionals?
“The focus of projects and the people inside organizations and enterprises is changing,” explains Steve Towers, CEO and founder of the BP Group. “The dialogue is less about how skilled you are at a particular technique but how is what you’re doing really going to contribute to achieving those deliverables which are going to move the metric on the customer satisfaction Net Promoter Score?” In this PEX Network interview, Towers explains why he sees customer-orientation as a growing trend within process excellence and the skills and capabilities required to achieve it.
Everything should be oriented towards your customer!
PEX Network: What do you see as some of the key trends that emerging this year within Process Excellence?
Steve Towers: The focus in the enterprise is now more customer-oriented. There’s much more information out there now, so organizations are doing things like Net Promoter Score and using more advanced ideas arising from Net Promoter Score. This means that the focus of projects and the people inside organizations and enterprises is changing. The dialogue is less about how skilled you are at a particular technique but how is what you’re doing really going to contribute to achieving those deliverables which are going to move the metric on the customer satisfaction Net Promoter Score? That’s a big trend.
The way I see that playing out, is that if, for instance, you bumped into the CEO and you have that 30 second elevator test. He or she is less interested now in how you’ve come in on time, to budget and achieved the deliverables. Instead, they’re much more interested in how is what you’re doing going to contribute to our public delivery? And, more particularly, some of the challenges that they’re facing and being beaten up about, how’s that going to resonate out in the market, generally – how’s it going to move the marker for us?
PEX Network: Is there also an element of technology becoming much more important within the Process Excellence community?
Steve Towers: Being around as long as I have, you’ve seen technology dealt with in many different ways. What we’re seeing now is less discussion about technology, and more discussion about capability. We’ve all seen on the internet that picture of the three-month-old child playing with the iPad, and I think the technology has moved in that direction: it’s less about educating people in the use of technology, and more what can technology provide?
As a consequence, some of the things that organizations are doing now, like embracing mobile platforms, are not about massive infrastructure investment. Instead, they’re about the utilization of the existing things that we’ve already got, in combination with the smart phone idea, so that people can access the systems.
That means they can become much more self-service oriented; they can do much more for themselves, as consumers who have much more information than they ever had before. So, the technology dialogue isn’t so much about: how do we build a massive enterprise system, it’s much more about: how do we provide the capability at the point of customer contact?
PEX Network: Now, going back to that focus on customer outcomes and improving customer satisfaction, what do you think is really driving that trend?
Steve Towers: I think that, at the end of the day, it’s a numbers game: you’re only as good as your last customer interaction. We all know the negative side effects of Twitter, and how something can explode.
However, in the same sort of way, good news travels just as fast as bad news. So people who are really performing well create an expectation. We can see that, for instance, in the airline industry, where progressive organizations very much know that the last interaction you had on the airline is going to dictate how many people you tell about that, but not only how many people you tell about, who you share that with in family and friends and where you’re going to put your business in the future.
The customer outcome is very important, and, of course, that’s very much allied with this digital capability as being able to provide at the point of contact.
There are some horror stories, though. For instance, I was hearing a story the other day about one particular US airline who were saying they’d done a customer survey, and the customer survey said people didn’t want in-seat films in four, five-hour flights across the US. Well, who on earth did they ask that question? Who said that’s what they wanted? Whereas the smart organizations, which are much more focused around customer outcomes, actually go and figure out what the customers need, even when customers don’t know they need it themselves. For instance, when you sit down on, say, a WestJet flight, it’s a, really, quite different experience from some of those older, more classic, organizations that are still asking, what do you want? PEX Network: How, in Process Excellence, then, do we need to shift our thinking in order to respond to those new emerging trends?
Steve Towers: I think there’s a big mind-shift underway, and we can very ably see that with those people who are involved with the Process Excellence community who embrace this idea of customer outcomes. They’re aligning their work to deliver customer outcomes, as opposed to those people who are still saying, well, what we did in the past in terms of our approach – whether it’s Six Sigma Lean, or BPM – we just need to try harder.
Trying harder isn’t the solution anymore, it’s about getting smart at what we do. You don’t need to embrace every aspect of the training that goes with process excellence, but instead the specific things that are related to your organization and the customer outcomes you’re trying to deliver.
For process excellence professionals, the challenge is to no longer be looking at the past and learning what people did, but more trying to anticipate the future, and get themselves in a position where they can really help their organizations at a day to day, tactical level, but more importantly, contribute those tactical-level approaches towards a strategic delivery – which is better successful customer outcomes.
PEX Network: Looking towards that future that you just mentioned, what are some of the skills and capabilities that you think process practitioners will have to have in order to make that a reality?
Steve Towers: We’ve always thought that we’ve got a list of techniques, and if we learn those techniques, we get a tick in the box and we’re qualified. That’s just a question of how many techniques you have acquired that essentially predicates your role. However the people who are really successful with Process Excellence at the moment are individuals in their organizations who have a capability which can embrace both a strategic level of thinking – where is the organization going, and how are we going to get there – and, in a day to day context, how the projects that we’re working on contribute to that higher level objective.
So this means connecting the dots between the day to day tactical things that we’re doing to improve business and project delivery, to the actual strategic outcome of the organization.
Not all people can have that skill set – some people are very good at the tactics, others are good at strategy. But the really good Process Excellence people, those people who get qualified, understand it’s about being able to connect the dots.
Customers are deciding how they want to do business. With more choices and information at their finger tips they have become rebellious and promiscuous. Successful enterprises are adopting an Outside-In approach to their customers, understanding and creating needs and managing expectations proactively.
1.Educate and engage every level of the organization in customer centric thinking. Undertake seminars and establish an awareness campaign amongst your senior executives. Establish and qualify new roles for process professionals and customer experience people through certification and accreditation. Make the transition to Outside-In a burning platform issue as otherwise your customers will rapidly become someone else’s.
2.Develop a practical delivery focused approach that produces wins and encourages adoption. The top team will become advocates as they see results achieved quickly. Winning hearts and minds will enable the organisation to develop rapidly and mature into a true Outside-In focused enterprise.
These first steps will begin a journey that will reward your customers, your employees and your shareholders.
