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.
“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
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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.
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.
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?
Keynote address delivered in Bangalore at the 6th Annual Enterprise & IT Architecture conference hosted by iCMG. Updated and revised for the 5th edition of the book “Outside-In – The Secret”
Outside-In is clearly the way for the worlds top companies (see David Mottersheads blog at http://www.outsideinconsulting.com.au/outside-in-blog.html) and reflecting on the commentary by Hank Barnes in “Customer Experience Challenges: Why Maintaining an Outside-in Approach is Tougher than it Seems” the answer as to why the masses don’t get it is probably very simply the herd instinct.
For instance in 1969 astronomer J. Donal Fernie made an observation many of us will understand. In writing about the decades it took his fellow professionals to spot a fundamental error.. “the definitive study of the herd instincts of astronomers has yet to be written, but there are times when we resemble nothing so much as a herd of antelope, heads down in tight formation, thundering with firm determination in a particular direction across the plain. At a given signal from the leader we whirl about, and, with equally firm determination, thunder off in quite a different direction, still in tight parallel formation”
We of course have our own immediate examples. What about the world leading Insurance Company waiting eight days for ink to dry on parchment paper before sending out a new policy? Or the removal business that stuck with a 35 mile rule limit just in case the horse died? What about suggesting people visiting the UK from ‘abroad’ should practice driving on the left before they came if they weren’t used to it (to reduce the accidents on UK roads).
Yup there are lots of antelopes out there. Will you meet any tomorrow? And will you be running with the herd?
“I would hope people would say that Amazon is earth’s most customer-centric company, and that we work backwards from customers. Many companies sort of look at what their skills are and they work forward from their skills. They say this is what we’re good at, and this is what we’ll do. It’s a very different approach from saying here is what our customers need, and we will learn whatever skills we need.”
That really describes the dfference between inside-out thnking (examine your capabilities and figure out how to optimise them) to Outside-In – figure out the Customer needs and align everthing to deliver the Successful Customer Outcome. http://bit.ly/AmazonOutsideIn
By Steve Towers, used with permission (Thanks, Steve!)
Tips for Success as a Middle Manager
There are a number of individual and organizational actions that lead to proven success:
Move away from day-to-day operations – these belong in the front-line.
Think like senior managers
Understand the business strategy
Participate at all levels by exploiting their technical and organizational expertise
Manage change and people together.
Utilize their role as ‘Ace mediator’.
Become a practical visionary.
Become the master of change
(Full text of the article follows)
Steve Towers, Chairman of the Business Process Management Group (BPMG) and UtiliSense, offers some sage advice for survival.
Preamble: Middle Managers are under immense pressure from above and below to do more with less.
Everyone is doing it – Southern Electric International acquiring SWEB, Hanson and Eastern Group getting together, North West Water and Norweb forming United Utilities. London city is rife with more rumors – who’s next? One thing is certain and that is that everything is changing. Many utilities are anticipating, and indeed pre-empting change, by taking greater control over their own destiny through Business Process Re-engineering. Amidst all this radical change what is happening to the Middle Manager? Is the role still a viable one? What does the Middle Manager have to do to survive?
Pressure to change almost irresistible
The current Merger/Acquisition mania-sweeping the sector, coupled with nervous Regulators, Customer dissatisfaction, Director pay publicity, and the looming election are rocking the boat and causing utilities to rethink themselves. This self-appraisal is resulting in ‘new-look’ organizations which have been become Down-sized, Customer focused, Team managed with Flatter, de-layered organization structures.
Middle Manager has become an endangered species
In response to the need to cut costs some organizations have effectively scrapped the role of Middle Manager! They are viewed by many writers on change as excess ‘organizational baggage’. Mike Hammer, co-author of ‘Re-engineering the Corporation’ says in his latest eulogy ‘. . . we refer to this managerial hierarchy . . . as the Death Zone of re-engineering. Middle managers have the most invested in the status quo and stand to lose the most in re-engineering’ So that’s it? The end of Middle Management as we know it? Yes and no, the organizations that have achieved re-engineering success (ant there’s a lot who haven’t) have done so with the middle manager playing the key role. However it does involve transforming the role. Evidence is now emerging that organizations who view the middle manager as ‘dead wood’ are doomed; companies that ‘hack out’ the middle manager are destroying the greatest potential asset. Unfortunately many still believe that by scrapping this vital resource they will succeed. This is one of the reasons why so many re-engineering programs falter and subsequently fail.
Middle Manager survival
The key to success is changing the role. Middle managers are no longer up-and-down information conduits, or simple plan-control-evaluate-functionaries. They embody the core competence of the successful organization. Re-engineering success is achieved by the middle managers identifying the business breakthroughs; becoming good role models and overcoming the organizational barriers that prevent success. Senior management are beginning to appreciate that in true Pareto style, if they are to achieve the customer improved, reduced cost, flexible and dynamic business they must use and enhance this organizational role. The really successful business managers know that the pivotal position of the middle managers can convert a cynical ‘change-blitzed’ organization.
So what does the Middle manager need to do to ensure success?
There are a number of individual and organizational actions that lead to proven success: 1. Move away from day-to-day operations – these belong in the front-line. Avoid being distracted by the minutia of life. Becoming buried in the detail is a sure-fire way of missing the point. There’s a need to focus on the important more strategic issues, let the front-line worker gain the necessary knowledge and competence to develop the skills to fulfill a more rounded role, and indeed deal with the detail. 2. Think like senior managers Looking up and out provides scope for dealing with more substantive issues. Contributing to the internal ‘way forward’ debates will ensure that the Middle Managers extensive knowledge is utilized for organizational benefit. 3. Understand the business strategy What are the things which cause the organization to want to change? How can the organization direct its own future, anticipating threats and exploiting opportunity? 4. Participate at all levels by exploiting their technical and organizational expertise Many Middle Managers have internalized a great deal of technical and organizational knowledge – how their business works best, the mechanics of the way things get done, what will work and why some things fail. Spread the knowledge. It will ensure that decision making is informed and well thought out. 5. Manage change and people together. Set an example and coach the less experienced through difficulties. 6. Utilize their role as ‘Ace mediator’. Someone who is able to understand internal and external pressures on the organization and satisfy competing interests. 7. Become a practical visionary. Converting the strategic ‘top-think’ into meaningful actions, and counseling the front-liners through often difficult transformation. 8. Become the master of change Set the agenda by recognizing what is possible and harnessing the organization to achieve it. Understand the practical ways of implementing change, initiate activities that lead to ‘shifts in thinking’ about the way work is done.
Comments from the field
Asking the question ‘How can you become a more effective middle manager?’ elicited the following thought-provoking responses. Rory Chase, Managing Director of IFS International in Bedford, has first-hand experience of the challenges:
He says “the new role of the middle manager embraces three key areas – Team leadership, Change Maker and Facilitator.”
Rory explains that Team leadership is about setting an example, establishing a good role model and actively leading from the front.
Being a Change Maker means being innovative, looking for continual improvement and interpreting the needs of senior management, staff and customers alike.
The Facilitator is about getting the right things to happen.
Rory finally adds “Getting total buy-in to change.
Gaining the commitment of the organization to successful improvement.”
That’s no small agenda to accomplish, especially since ‘business as usual’ doesn’t stop as the new role develops.
In the more fragmented United States utility sector they have been experiencing this type of change for some time now. Leonard Sayles, author of ‘The Working Leader’ and a senior manager at the Center for Creative Leadership says:
“Everything has changed.
You have much more demanding customers, who are increasingly demanding customization.
These customers are not only demanding, their needs are in flux . . .
The market is itself more turbulent.”
Leonard sees the new role as completely rethinking the past, “You need to keep redesigning and adapting the (business) processes, with the power and autonomy people can have.
This type of integration can only take place through a variety of middle manager negotiations and interventions.
Mainly you have to remember that all the things you’ve been told (about managing) are totally wrong.”
Grasp the Change
Realizing this transformation will free not just yourself but the people around you. Seizing the initiative, and going for growth will truly empower you and the organization. Chocks away!
Acknowledgement:
After an early career in the Utility and then the Financial Services sector Steve Towers co-founded Utilisense Consulting, now established as a leading BPR consultancy. He is Chairman of the Business Process Management Group (BPMG) and has recently been appointed Chairman of IntraNet Solutions, a systems consultancy currently undertaking Internet/IntraNet assignments with leading blue chip companies.
Well that was back in the 20th century. Is it really any different now?
