Category: Steve Towers

We shouldn’t keep looking back at the past to define the possibilities for the future.

When great change happens new thinking is required.

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?).

 

Here we are again, mass customization, customer promiscuity, choice and high expectations. The Age of the digital consumer. Dee Hock, founder of VISA, says it is the biggest thing to happen since Renaissance Europe (about 500 years ago!)

 


Does your organization meet these new challenges with fresh thinking, or they simply extrapolating the (redundant) past.

How much do you need to know, to know you know, you know enough?

Many so called Performance Improvement approaches involve detailed analysis. In some cases

Go beyond the software prescriptions and excessive analysis.
When you know enough stop and move on.

What techniques are you using to understand (rather than analyze excessively) the nature of the work the organization does?

analysis paralysis!

Honestly though how much time should it take to understand something is broke and needs fixing?

Moments of Truth? Eradicate! Only improve a Moment of Truth if you can not remove it.

In 1997 Steve Jobs returned to Apple*. Over a period of 3-4 years he transformed the business into the most innovative company on the planet. One of his mantras was “the customer experience is the process”. Couple that with  ”If you find a Moment of Truth you should remove or improve it”.
Simple ideas that created one of the most successful companies in the universe.
What could you do with your Moments of Truth?

* For a complete transcript and video of that AWWDC 1997 event see here.

You are not in the business of doing things. You are in the business of achieving Successful Customer Outcomes.

Through my time with many amazing organizations and leaders I seemed to have acquired many quotes and sayings, sometimes from the inspiration of others sometimes slipped in to make a point as firms grapple with the needs of the 21st century. If you said some of these then thanks for your inspiration. If you heard me saying them then credit where it is due!

At a recent consulting engagement one of my clients captured more than ninety such quotes in a six month period. Let’s share some (with an explanation) over the next few weeks.

You are not in the business of doing things. You are in the business of achieving Successful Customer Outcomes.

A lot of work can be busy work. Are you actually contributing to a Successful Customer Outcome, or just moving the chairs around the deck of the Titanic?

How can you know? Simply put everything an organization does, from the tasks and activities through to strategy should be explicitly linked with a Successful Customer Outcome. If it isn’t you may get very good at doing things, but you won’t be doing the right things.

Is your work directly linked with a Successful Customer Outcome?

Part 3 of 4: There are four distinctly Outside-In ways that you can rethink process and in doing so achieve Triple Crown benefits.

In the first two articles in this four part theme we reviewed ‘Understand and applying Process diagnostics‘ and the ‘Successful Customer Outcome‘ map.
We now move our attention to the third  way we can rethink process forever

Reframing process for an Outside-In world

A fundamental principle of Outside-In is the understanding of where your process starts and ends.

In the 20th century many techniques and approaches developed to better understand and create processes. In its earliest form pioneering work undertaken by the United States Airforce created modelling approaches based on the Structured Analysis and Design Technique (SADT) that produced iDEF (Integrate DEFinition Methods). iDEF became recognised as a global standard as a method designed to model the decisions, actions, and activities of an organization or system[1].  iDEF as a method has now reached iDEF14 [i] and embraces a wide range of process based modelling ideas. Concurrent with the development of iDEF technology providers created proprietary modelling approaches, and subsequently developed into modelling language standards, used by many organisations to represent their systems and ways of working. The convergence of business process modelling and business process management (BPM) has now produced a rich set of tools and techniques
able to model and ideally manage an organisation. In fact one of the more accepted definitions of BPM (based on the British Journal of Management[ii]): “Business process management (BPM) is a management approach focused on aligning all aspects of an organisation with the wants and needs of clients. It is a holistic management approach”

Until a few years ago process management approaches looked within the boundaries of the organisation and the combination of modelling and management approaches were adequate to understand the enterprise. The impact of process management in improving organisation performance has been profound however we now face a different reality driven by the customer.

As a consequence both disciplines now present a series of problems that include

(a)    understanding the beginning and end of the process,

(b)   the techniques used to model process are inadequate and focused  on the wrong things

Strangely customer involvement in a process often appears as an afterthought and the actual representation systems (left to right, top to bottom) create an illusion that fosters the belief that “the customer isn’t my job”.

Let’s deal with each in turn by example:
a.     The beginning and end of process

To aid the discussion let’s look at two airlines, British Airways and Southwest, and we’ll review how they ‘think’ about their business through the eyes of process. If you sit down with British Airways executives and asked the question “where does your process start and end?” the response reflects the main source of revenue, seat sales.

So the answer “the process is from the ticket purchase to the collecting the bags off the carousel” is no great surprise. In fact that is the way we have mostly thought about process in that it starts when it crosses into organisation, and finishes when it leaves. We can easily model that, identify efficiency improvements, improve throughput and optimise apparent value add.

As far as British Airways is concerned what you do outside of that process is no concern of theirs, after all they are an airline and that’s what they do. Now let’s change our perspective and visit Love Field in Texas and meet the executive team of Southwest. Ask the guys the same question “where does your process start and end?” and the answer is a whole different viewpoint.

The process begins when the potential customer thinks of the need for a flight, and only ends when they are back at home following the journey. The scope of this process is defined by the phrase “the customer experience is the process”. That’s an Outside-In perspective and creates opportunities across the whole customer experience.

More than that it raises the prospect of additional revenue streams, spreads the risk associated with a dependency on seat sales, reinforces the customer relationship and develops an entirely different way of doing business.  So let’s ask another question of our friends at Southwest “guys, what business are you in?”, and the answer changes everything you ever thought about airlines forever “we’re in the business of moving people”.

Downstream Southwest may well turn the industry further on its head as they move from being the low cost airline to the ‘no cost airline’ and give their seats free of charge. What would that do to your business model if 95% of your revenues, as with British Airways, comes from seat sales?

The business challenge for Southwest becomes one of controlling the process to benefit and maximise the customer experience. That involves partnering, sharing information and doing all necessary to make customers lives easier, simpler and more successful.

Now how do you model that?

b.     The techniques used to model process are inadequate and focused on the wrong things

We have reviewed the ultimate cause of work for all organisations is the customer. Organisations exist to serve the customer though the provision of products and services and in this way develops revenue that goes to the profit and onward distribution to the stockholders.

In other organisations without the profit motivation, for instance the public sector, then the effective delivery of services is measured by citizens and stakeholders.  Accordingly it stands to reason that everything happening within the organisation should be organised and aligned to deliver customer success and anything that isn’t is potentially ‘dumb stuff’. The techniques we use to ‘capture’ process are however not suitable to understanding the causes of work and focus attention instead on the visible tasks and activities that are perceived to create value for customers. In the context of the enlightened customer[iii] this is at best misleading and at its worst actually part of the broader problem. In Outside-In companies the focus has shifted to understanding the causes of work, and then engineering those causes to minimize negative effects.

Once more to go Outside-In we need a perspective shift and we can achieve this by identifying those three causes of work and then set out to reveal them and their negative impact.

How big is the size of the prize? Efficiency and productivity gains of 30% to 60% are common. Cost reduction of services by 50% is not unusual.

Cause elimination is a seek and destroy mission. It’s the challenge to weed out the “dumb stuff” in our organizations.

By truly fixing the Causes of Work, rather than messing around with the Effects (a bit like moving the chairs on the deck of the Titanic) we will all find our customers and employees life simpler, easier and more successful. Are you ready to challenge your assumptions and start eliminating those causes of work? Fix the Cause, remove the effect.

[1] http://www.idef.com/IDEF0.htm

[i] http://en.wikipedia.org/wiki/IDEF

[ii] Understanding Business Process Management: implications for theory and practice, British Journal of Management (2008) (Smart, P.A, Maddern, H. & Maull, R. S.)

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Visit additional resources www.oibpm.com
Become a Certified Process Professional www.certifiedprocessprofessional.com 

First Steps into Outside-In Thinking Part 4a) – The Successful Customer Outcome

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.

First Steps into Outside-In Thinking Part 1 – The Challenge

First published by the BP Group 3 years ago here’s some of the mindset behind Outside In.

If we consider the challenges of succeeding in business in the 21st century, most major companies would come up with a similar list:

When they talk about their customers
> Competition is fierce, global and increasing.
> Customers have become rebellious, they realise they have the right to alternatives and they frequently exercise that right.
> Customers have high expectations, they demand more and unless that demand is met they will go elsewhere.
> Customers demand choice, comprehensive information and the best price.

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?

See more of the thinking, practice and qualify as a Certified Process Professional (CPP) www.bpgroup.org

BPM drives High Performance Organisations (HPO’s)

By , ITWeb contributor.

Johannesburg, 20 May 2013
International process improvement expert, Steve Towers, advocates an 'outside-in' approach.

International process improvement expert, Steve Towers, advocates an ‘outside-in’ approach.

How business process management (BPM) is applied in the organisation is what makes the difference between ordinary businesses and high-performance organisations (HPOs), says international process improvement expert, Steve Towers.

Towers, who is preparing to release his eighth book, says his research into the characteristics of HPOs has resulted in the book and a new set of tools aimed at maximising BPM to enhance business performance.
“In BPM, there is a lot of focus on Lean Six Sigma, the technologies and the processes. Basically, companies are doing things right, but they are not doing the right things,” says Towers.

Their metrics may tell them they are managing their processes correctly; they may be showing high levels of performance and efficiency in line with their traditional metrics, but despite this, they may still be going bankrupt. This is because they are measuring the wrong things,” he says.
“They may be very busy – but are they doing the right things in the 21st century context?”

Towers says the most critical measure is that of total customer experience. “Companies cannot focus internally,” he says. “HPOs focus on the customer experience. It’s not just about what happens internally; it is also about what happens before that process and what happens after.” Towers has long advocated an ‘outside-in’ approach, rather than an ‘inside-out’ one. This way of thinking is customer-centric, something organisations have to be in an increasingly competitive business environment.

To align processes with HPO best practice, says Towers, organisations need to ask ‘who are our customers and what are their needs?’
“Don’t start with the technology or the process,” he says. “By focusing on the customer first, you may discover you have been focusing too much on unprofitable customers, for example. Once the target customers are identified, you have to define what it is they need. This is often not articulated well – they may not know what they need before it exists, and often the focus is mistakenly placed on what customers think they want – not what they actually need. HPOs actually produce products and services in advance of customer needs.”

Towers highlights revolutionary technologies, such as the Apple iPod, which met customer needs at a time when customers themselves did not realise all-in-one digital music management was something they wanted and needed.
“HPOs use systematic approaches to this,” says Towers. “They are scientific about assessing customer needs, and measuring what customer success looks like. Classically, companies use subjective approaches like net promoter scores to assess customer satisfaction. But this is not necessarily good enough. This is a very subjective way to measure customer experience.”
Towers says: “Companies need to get scientific about customer experience – they need to measure the right things, using the customer experience ratios used by HPOs.”

ITWeb BPM Summit 2013

Now in its fifth year, ITWeb’s BPM Summit reveals how to drive breakthrough business performance by focusing on practical advice, technology updates and case studies. The summit will help BPM practitioners to improve their skills, advance their BPM projects, and deliver truly transformational BPM to their organisations. For more information, click here.

Towers notes that assessing customer experience by asking ‘how do you feel?’ is subjective and reactive – it takes place after the event. “HPOs know that evaluation of customer experience has to take place at the time of the action, delivering immediate feedback that allows enterprises to manage and control the interactions as they happen.”

This new approach to measuring customer experience to deliver business benefits could help fast-track organisations’ growth in SA, Towers believes. “In BRICS nations, companies are now setting new benchmarks on what performance looks like. They have the potential to take these concepts, run with them and become world-class performers. In line with this, South African companies stand to play in the big league if they adopt more effective process management,” he says.

Towers will deliver a keynote presentation at the upcoming ITWeb BPM Summit on market-focused approaches to strategic business improvement. He will also elaborate on these approaches in a workshop aligned with the event, when he will outline his findings on HPO differentiators. The tactics of HPOs, to be revealed in his soon-to-be-released book, will be shared with SA ahead of world audiences. Towers will also give insights into the metrics behind customer experience ratios – the new measure for customer experience.

For more information about this event, click here.

PEX and BP Group Certified Process Professional (CPP) May 2-3, London

Just around the corner is PEX Europe in two weeks time.

In association with IQPC and the PEX network we are running a two day Certified Process Programme (CPP). Now in its 7th year the CPP qualification has spread far and wide with more than 25,000 certified across 92 countries. Places are in high demand so if you would like to attend book here and the PEX team will help get you in the room on Thursday 2nd and Friday 3rd May.

Advanced BPM and Outside In – The CEMMethod

The CEMMethod is widely used as the means to help organizations progress Outside In. This slideshow shares the most recent updates to this popular framework, with 38 techniques included to enhance your capabilities, individually and enterprise wide.

Access more informaiton on how to lean and apply the CEMMethod from here.