In praise of the Customer focused organization (and the best at what they do!)

When is a good business model a really good business model?

When (perhaps)
… the customers keep coming back for more (76 million per year)?[i]
… you are consistently outperforming you industry rivals (record breaking profits in Q1 2012)[ii]?
… the shareholder value is growing year on year?[iii]
… you consistently drive out costs and grow revenues?[iv… receive positive feedback from yourchosen customer base?
… when your strategy is clearly stated and easy to understand by employees, management, shareholders and customers alike[v]?
 
By all the above criteria Ryanair the Irish airline is a terrific and much envied success. And yet you may hear many criticisms of Ryanair however as Michael O’Leary, their ebullient CEO points out, they are not Ryanairs customers.
In fact he wishes they never darken his door again as the Ryan Air offering is specifically not aligned with “picky, choosy time wasters” (his words not mine).
What is the secret?
Part of the magic is a complete focus on understanding their chosen customers successful outcome, and while that may not include you or me, it is certainly the bulk of travellers in Europe whose repeat business has helped Ryan Air outperform the sector for the last decade.

So have you personally and has your business really clearly articulated who is your customer and then defined the business you are in?

[iv] BBC News 21 May 2012: Budget airline Ryanair has reported record profits as fare rises helped to offset a sharp rise in fuel costs. Net profit for the year to March was 503m euros ($643m; £406m), up 25% on a year earlier. Revenue rose by 19% to 4.3bn euros.
[v]Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled
passenger airline through continued improvements and expanded offerings of its low-fares
service. Ryanair aims to offer low fares that generate increased passenger traffic while
maintaining a continuous focus on cost-containment and operating efficiencies. (http://www.ryanair.com/doc/investor/Strategy.pdf)

Outside-In at Apple strikes a chord

BP Group CPP Master® Arun Kumar (with noted technology innovators Gieom in India) comments:

Just saw the Apple Worldwide Developer Conference….and I am overwhelmed by iOS6 features on a phone. They have tied up with the likes of BMW, Honda, Jaguar, Audi to have a SIRI button in the next 12 months in their cars where traffic, weather, turn by turn navigation and Realtime Estimated time to arrive at a destination can be manipulated using voice on the iphone. They are calling it going from handsfree driving to Eyes free driving.
This wouldn’t have been possible if you don’t think outside in…..if you don’t make the process for the experience of the customers and not just for your capabilities. Many I talk to think the innovation is a gamble…..how frustrating when actually innovation can be achieved by looking at a process and thinking of creating an ecosystem with others to achieve that. But anyway, happy that I can relate to these innovations and think it’s just how you look at your processes and not some design room magic by einstein haired scientists. Thanks for the halo.
(Arun is third from the left)
And thank you Arun for the observation!

What is your personal Successful Outcome?

The recently completed Cape Town CPP Masters was a great success. Of the 12 new CPP Masters Charles Lewis shared the following tale (thanks Charles pictured on the left)


One day a fisherman was lying on a beautiful beach, with his fishing pole propped up in the sand and his solitary line cast out into the sparkling blue surf. He was enjoying the warmth of the afternoon sun and the prospect of catching a fish.

About that time, a businessman came walking down the beach, trying to relieve some of the stress of his workday. He noticed the fisherman sitting on the beach and decided to find out why this fisherman was fishing instead of working harder to make a living for himself and his family.

“You aren’t going to catch many fish that way,” said the businessman to the fisherman, “you should be working rather than lying on the beach!”
The fisherman looked up at the businessman, smiled and replied, “And what will my reward be?”

“Well, you can get bigger nets and catch more fish!” was the businessman’s answer.
“And then what will my reward be?” asked the fisherman, still smiling.

The businessman replied, “You will make money and you’ll be able to buy a boat, which will then result in larger catches of fish!”
“And then what will my reward be?” asked the fisherman again.

The businessman was beginning to get a little irritated with the fisherman’s questions. “You can buy a bigger boat, and hire some people to work for you!” he said.
“And then what will my reward be?” repeated the fisherman.

The businessman was getting angry. “Don’t you understand? You can build up a fleet of fishing boats, sail all over the world, and let all your employees catch fish for you!”
Once again the fisherman asked, “And then what will my reward be?”

The businessman was red with rage and shouted at the fisherman, “Don’t you understand that you can become so rich that you will never have to work for your living again! You can spend all the rest of your days sitting on this beach, looking at the sunset. You won’t have a care in the world!”

The fisherman, still smiling, looked up and said, “And what do you think I’m doing right now?”


Six Sigma on Steroids – Keynote from PEX

Steve Towers with six sigma on steroids

Coming to somewhere near you: 20 Cities on every continent through June, July and August 2012.

In May 2012 we passed the 20,000 accredited Certified Process ProfessionalsRsince 2006.
 
Limited offers in the month of June: http://www.bpgroup.org/certification-by-city.html
An internationally recognized program with proven track record of success – being run for 260 times in 84 cities with attendees from 95 countries, the program is developed based on the branded BP Group CEMMethodTMwhich aims to win the Triple Crown (simultaneous reductions in cost, growth in revenues and advances in Customer Service) with significant immediate quantifiable business results.
In May 2012 we passed the 20,000 accredited Certified Process ProfessionalsR since 2006.

Advance your life and business Outside-In

Limited offers in the month of June: http://www.bpgroup.org/certification-by-city.html
 

Busy at BPM Towers – new coaches, new CPP Masters, new new ;-)

It sure is busy here at BPM Towers. In the last month we qualified two new BPGroup Licensed Coaches, Mark Johnston (UK based) and Alexandre Nevski (Swiss based). Another, Ian Singleton (UK Public sector), is close to completing the requirements and will no doubt jump in the deep end, just as Alex is doing this week.
In a true baptism of fire Alex starts his Coaching assignments in Helsinki and then Moscow where he will lead more than 50 wannabe Certified Process Professionals through CPP Levels 1&2.

Latest CPP program http://www.bpgroup.org/certification-by-city.html

Meanwhile yours truly isn’t sitting on the beach 😉 I am here in Delhi flying the flag with our Indian partners iCMG in delivering training to the worlds leading BPO companies. Next week sees me in Bangalore (the garden city) while Jason Edlin, our Lead Coach with Frame Group, tackles, sorry works with, a challenging bunch in Melbourne and Canberra.

And then I will be joining with Jennifer van Wyk (South Africa BP Group Lead Coach) in Southern Africa and Tanzania for more Outside-In explorations and deployments.

April 2012 was indeed our busiest month ever as we move to celebrate our 20th anniversary with more than 300 people gaining at least Certified Process Professional ® (CPP®) status, and of those 18 became BPGroup Certified Process Professional Masters ® (CPP-Master®).

We will have an update for all later this week which will include new videos, new case studies, new downloads, the new CEMMethod™ news (with a supporting webinar) and always the latest CPP program http://www.bpgroup.org/certification-by-city.html

Have a truly great week and I will see you in the action later….

Cheers
Steve

The difference between Inside-out and Outside-In thinking – part 2

Economics of the 18th century won’t help now. Growing revenues through client acquisition and increasing product complexity can no longer sustain growth.
Promiscuous
Customers have become promiscuous and see little to encourage them to stay with one vendor rather than another. In fact many customer relationships are so poor customers actively seek and acquire alternatives.
Customer churn is at an all-time high. In 2010 across Germany a remarkable 42% of customers have been with their bank less than 12 months (source: Mentor). And yet customer acquisition costs in banking have increased so much that insurers need to retain their clients for 6-7 years just to break even.
Prosumer
Customers have become sophisticated, informed and choosey. Often times knowing more about the product and service they wish to buy than the people selling the products in the first place. Think about the cellular phone experience. We know what we want, the tariff, the contract, the precise number of texts per month, the connectedness (wi-fi, 4G etc.). And meanwhile the hapless sales associate can only hope to skim the surface of our needs with daily briefings and headlines for new products. Customers can even fall victim to clipboard man. The guy in the store who wants to sequence customer interactions through various sales reps and keeps you waiting like a piece of assembly on the production line. This inside-out industrial age mind-set doesn’t work with a Prosumer, who votes with their feet to companies who better understand their needs.
Rebellious
Time machine – 1970’s. You have a poor experience and share it with 20 other people. Fast forward 2012. You have a bad experience and you tell twelve million people (United Breaks Guitars, Youtube http://bit.ly/BreaksGuitars). Or even not telling companies why you leave them – why waste your breath?
Successful Customer Outcomes
Customers no longer believe excuses for complexity including data protection, regulatory requirements and sloppy communications. They require organisations to decouple overly complicated procedures and speak in plain English. Promises to deliver should be met without exception. The customer experience has become the process so organisations need to ensure a laser like focus on delivering success customer outcomes, handholding clients through the evaluation and engagement processes. Customers value the resulting intimacy and this in turn becomes a means to build future sales and loyalty.   Direct measures of success include simultaneous revenue growth, cost reduction (less leakage and rework) and service improvements.
High Expectations
Making promises is easy — keeping promises is so much harder. It is easier than ever to commit to delivering great service and yet, when the rubber hits the road a car wreck is the usual result. Customers are now fickle and recall poor service with friends across Facebook, twitter and other global social networks. Meanwhile organisations struggle to overcome cross functional fault lines. Mindset myopia locks departments and divisions into divided thinking resulting in fractured customer experiences.
Multi-channel management
25 years ago banks could survive with two channels to market such as postal services and branches. Today the same banks must offer service across multiple channels including ATM, email, text, mail, voice, face to face, and the classic branch and postal service. Customers require these services to be seamless and desire a consistent and comprehensive interaction at all points of contact. 
These Moments of Truth need engineering to make customers lives easier, simple and more successful. Furthermore the internal interactions resulting from multi channel contacts need clear articulation and simplifying to an optimum number. For any process that deserves to exist there is an optimum number of Moments of Truth to achieve a successful outcome.  
For any business hoping to grow and build the emphasis has shifted from resource management and the development of internal skill sets to understanding and aligning to customer needs. Or as Jeff Bezos, CEO Amazon, says “working backwards” to deliver customer success.  
In the next instalment we’ll get onto reviewing the technology changes, which of course go right to the heart of the matter….

The difference between Inside-out and Outside-In thinking.

A couple of weeks ago we started our look at the difference between Inside-out and Outside-In thinking.

If we scoot to the bottom of the table…. and let’s start with the review of changes to customers

Industrial/Information Age Customer Age

People Silo’s Multi functional
Specialist Multi skilled
Isolated Relationships
Awards – Time served Awards – Value Created
Autocratic Dynamic (to suit the needs)
Processes Doing things right Doing the right things and doing things right
Manufacturing mindset Customer Experience
Tasks/Activities and Outputs Outcomes and SCO’s
Stocks Flows
Products Services
Left to Right, Top to Bottom Customer Centric
IT Algorithmic Heuristic
Hierarchical Hyperlinked
Analytical Understanding
Ownership Access
Strategy Top Down Inclusive
Structured and Rigid eg 5 yr plans Agile and Adaptive
Tablets of stone Continual Alignment to SCO’s
Market/product focus Customer/expectation focus
Customers Uninformed Prosumer
Loyal Promiscuous
Forgiving Rebellious
Locked-In Demand Flexibility
Compliant and managed High Expectations and fickle
Single channel Multi channel

We can probably reasonably observe, without fear of understatement, that the customer has changed forever. The reason our organisations exist, the people who pay our wages, the cause of all the work we do has evolved beyond recongnition.

  • And yet has your organsation changed in response to this evolution? 
  • Do we do our work in a different way from the last century?
  • Is work still flowing top to bottom and left to right?
  • Are we thinking about how our processes connect with customer success? 

In the BP Groups research and experience with the leading companies of the 21st century the answer is … YES, some in fact do understand and act on this new imperative. However the majority, including some previously prestigious names are not getting it. Look at the troubles of Nokia, Kodak, Sony, British Airways, Air India, United… the list is extensive and disturbing.

For our examples of successful transformation and realignment we can include Emirates, Zappos, Zara, Apple, Indigo, Hallmark and BMW. A wide selection from different industries, cultures and operating models. We will get to sepcifics later, for now let’s review the reason for their successful adoption of Advanced BPM, otherwise known as Outside-In. The customer!

If things are changing faster Outside than in you will fail


The acccepted business wisdom until the end of the last century was the adoption and exploration of ideas originally described by Adam Smith in the Wealth of Nations, published in 1776. This seminal work introduced the world to the concept of the sub division of labour.

Written during the advent of the industrial revolution the ‘Wealth of Nations’ created a framework for organising manufactories and people into similar skills and disciplines. In fact the original work in a Scottish pin factory demonstrated 20 fold improvements to productivity and as such became a template for achieving industrial and commercial success. Two and a half centuries later the model is still taught in business schools and academia as the way to structure and organise work. After all it worked for 200+ years?

We can’t solve problems by using the same kind of thinking we used when we created them (Einstein)

And there is the rub. The challenges we face in the 21st century are very different to those being addressed by Adam Smith and the industrialists of the Napoleonic era. Let’s get to grips with some of the shifts…

to be continued……

Image courtesy of: 

www.flickr.com/photos/mwichary/2356663850/