I just wanted to let you know that my research plan has advanced and now I am moving forward to collecting empirical data. The idea is to use Design Science to build and evaluate a BPMC artifact. It will be tool, which helps organizations to evaluate their capabilities for doing business process management and possible to get recommendations for actions to take to improve their situation.
I will collect empirical data with three methods: interviews, surveys and case organizations. First I will collect vital information for building the artifact with interviewing top BPM professionals in the world. After that I will continue getting more information through survey, which will be used to analyze the dependencies between BPMC factors. After that I will take that tool into some case organizations and try it out to see if it actually works.
So, there is a lot to do in the upcoming year 2012 and hopefully I will have some results to share with you soon. I already did my first interview today and hope to receive more in next few weeks.
Here is couple of acknowledgements that I want to share with you: Thank you for dr. Timo Lainema, professor Hannu Salmela, dr. Peter Trkman, dr. Klara Palmberg Broryd (check out: http://www.mementor.se/in-english/), Tuukka Heinonen (Hubco) and all the rest of you that have been helping me to succeed in this endeavor. There is still plenty to do, but I am on the right track towards Phd.
Consider the changes and their impact on how we do what we do. Is your organisation segregated into functional specialisms (ala the Scottish pin factory) or has it embraced the challenges of the 21st century and realigned Outside-In and put the customer at the centre of everything you do? If you are still wandering WHY have a look at this excellent presentation… The Future Of Work
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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If you wish to read and listen more on this theme the following references are useful. Join the community discussing these issues, challenges and opportunities.
Community and social networking – Join the BP Group
What are the challenges of succeeding in business in the 21stcentury? Ask leading companies and you would come up with the same list:
Competition is fierce and global.
Customers have become rebellious.
Customers are promiscuous
Customers have expectations like never before.
Customers demand choice, comprehensive information and the best price.
Customer know more about your service and product than you do (the prosumer)
Former IBM boss Lou Gerstner called this “commodity hell” and that is pretty much the nightmare for every business. With a list like this many businesses would claim to be already embracing the challenge and becoming customer centric with ‘voice of the customer’ initiatives. This is simply a collective delusion and is the root cause of why so many are failing the customer, the shareholder and their hardworking employees.
The delusion is easy to understand. Businesses have created departments that claim customer focus and extensively poll customer wants, seek feedback and then try to act on the information.
While this creates an illusion of progress it is to a large part a futile exercise focused on fundamental misunderstanding of 21st century customers.
Asking internal questions based on customer data results in such questions as “how do we improve service?”, “how can we reduce non value added work?”, and “how can we standardise?”. This thinking stems from a time when the world turned more slowly and is more appropriate to the 1950’s then this centuries new business reality. To orientate to long term business and customer success we need to look at the enterprise from the Outside-In (OI) rather than inside-out. It is now about understanding customer needs (not wants) and eradicating all the things that do not contribute to achieving Successful Customer Outcomes (SCO’s).
It is this Outside-In philosophy that leading global IT retailer Best Buy utilised to lead and dominate the consumer-electronics market in the US. In doing so Best Buy’s programme ‘customer centricity’ took the time to understand customer needs and accordingly align for the SCO, while long time competitors Circuit City and CompUSA struggled and ultimately went bust. Circuit City, previously successful in the 1980’s and 90’s did not understand the shift to Outside-In and continued to focus on reducing costs through laying off its highest-paid hourly employees, including salespeople, and replacing them with cheaper workers. At the same time (2007), then CEO Philip Schoonover rewarded himself with $7 USD million in compensation[i]. Customers don’t like that old style way of managing business and voted with their feet.
Best Buy meanwhile moved to understanding the customer needs and directed their attention organising themselves accordingly. Early research suggested that men look for a specific product at a discount price so hence, arranging stores around fast moving products, geared to guys worked in areas where the majority of shoppers were male. Alternatively in stores frequented by women the stores focussed on ‘bundles’ as women were shown to need say a digital camera with accessories such as cables, printer and other ‘value adds’. This was more important to that type of customer than discounted prices. As the Outside-In maturity grew audio-visual experiences were grouped together and themed as with the Magnolia theatre. Family oriented areas are now a familiar feature coupled with additions such as techie savvy Geek squad means Best Buy dominates a previously fragmented market. Their success is now being extended to Europe.
Making the leap from understanding to action requires a shift in perspective. Instead of functional specialist silo’s organised around division of labour and specialisation, enterprises rethink their centre of gravity. In what we call a Copernican shift the customer becomes the centre of the universe, rather than the legacy model were business organises itself inside-out as a pyramidal, left to right, top down structure. In these legacy structures it is sometimes difficult to actually include the customer on the map – they are relegated to the extreme left or right, or into warlike metaphors such as ‘the frontline’. No great surprise that people working in these structures can be working very hard doing things right (following procedures, delivering projects, meeting departmental objectives) but really the customer isn’t their job. That surely belongs to someone else in marketing, sales or customer service? In the Outside-In world the customer touches everybody’s job and the emphasis shifts to doing the right things and doing things right.
Breaking out of the straight jacket imposed by the inside-out organisation structure requires a different level of thinking, an incisive set of new techniques and tools, and a willingness to link every element of activity with SCO’s. A new focus embracing the customer experience as the process requires a renegotiation of partners, a realignment of relationships and investment in staff to ensure they can think and be customer centric. Reward structures become linked to customer success, rather than paying staff for turning up and following procedures.
Best Buy have broken the mould of their sector, as have others including Zara in fashion retailing, Southwest airlines, FedEx Office, Emirates, China Mobile, Disney and many more. These companies are the leading success stories of the 21stcentury and understand the game has changed forever.
For most businesses today, adopting an Outside-In approach is a necessity for survival — the only sure way to ensure the organizational resilience that will keep a company out of the death spiral of inside-out commodity hell. The path finders have set the standard and established a winning set of approaches, tools and techniques readily accessible by all.
You may want to make that move now, before it is too late.
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.
There is no easy way to introduce a new order of things however there are some principles that can be followed based on this type of mind shift.
1, Objective and immediate. The results we achieve with Outside-In are significant and substantive e.g. Triple Crown*. Accordingly any effort should first of all identify the clear tangible benefits.
2. Talk is cheap. Fine words and phrases will not win hearts and minds without substance. Delivery is key, hence the ‘start where you are’ sentiment. In current projects (where support may be lacking) introduce the techniques within the CEMMethod(tm) by stealth. Lift the heads of those around you to think of Moments of Truth, Break Points and Business Rules for instance. “Nothing new mate, just some stuff other guys have used within… Six Sigma../..Lean../..EA../..complaince etc. (delete as appropriate)”
3. Build support. With (2) underway you will build support. That is the point to shift focus and begin the more practical discussion of where and how.
4. Go for broke. If you are extremely lucky/persuasive and have the top team already onboard go for broke. Discover the worst most problematic issues and set to righting ’em. By fixing the Cause you will remove the Effect.
5. Move on. It is a 4-500 year shift in mindset (Dee Hock, VISA founder). It will ultimately transform the planet. The jury is in fact back and the results speak for themselves. So when all looks desolate and casting your pearls before swine is depressing, remind them that they are part of the problem and move on.
6. Make it so. YOU ARE NOT ALONE it just feels that way when surrounded by flat-landers (doh). Learn, exchange and do.
Once on-board review the subgroups and join the specialist communities – you will find friends and support as we transform the planet one person,one process, one organisation at a time!
PS. The Outside-In book published in 2010 reviews in detail this emerging trend. Here is the hardback – http://amzn.to/Outside-In Here is the eBook version – http://bit.ly/OutsideInAppleLink with Steve Towers – http://bit.ly/LinkWithSteve Follow Steve Towers on Twitter – http://twitter.com/#!/stowers *Triple Crown: Jim Sinur (Gartner) coined this phrase. Through the delivery of advanced BPM you will simultaneously reduce costs, enhance service and grow revenues. In public sector/not for profits replace revenue growth with delievry of strategic objectives.
