Synopsis
In the previous articles we have reviewed the global business transformation underway and how Advanced BPM is helping notable organizations assert their leadership. In this final article we'll look at the ingredients of success and ten best practice 'how to's' to deliver the transformation.
There are those people who believe that for anything to be successful it must be difficult and complex. I was reminded of this when reading some recent reviews of Richard Bransons excellent short read - Screw it - Let's Do it book (buy here) when apparently well educated and experienced people dissed the book because it was' too simple' and childish. Wake up and smell the coffee! We have collectively through the industrial and Information Age surrounded ourselves with rules (the vast majority now out dated) and red tape born of a time when customers didn't have choice and the work world was dominated by hierachy and control.
Bransons writing is a breath of fresh air as he shares with us the trials of tribulations of creating one of the 21st century's major success stories with over 200 global companies heading-up their respective business sectors. For those died in the wool inside out thinkers the message of simplicity and customer focus is akin to the medieval flat landers hearing the world was round collectively buried their heads in the sand hoping the truth just might go away. Unfortunately some people just don't get the New World. I am reminded of the story Roger Burlton once told me that it's going to take 25 years for this stuff to take off. When I asked why as surely the logic was irrefutable he simply replied "it's going to take that long for some of these (flat land) Directors to die!"
The good news is of course we have passed the tipping point and the rapid demise of several previously respected names is testiment to rise of the new bloods who play the game by a different set of rules centered around Successful Customer Outcomes (SCO's). We'll discuss and review the successful strategy and tactics shortly however first let's just remind ourselves of some really dumb things those inside-out guys carry on doing:
Dumb stuff the Inside Outers do to make our lives difficult
Those Restaurants - that charge extra for more than six people in one booking. How does that work? So we reduce the kitchen to and fro. We pay with one payment. We vacate the table at the same time. We make the chef's life easier. We bring more revenue than several tables with 2-3 people. There's more but you get the picture.
Taxis - (especially the ones in Washington DC) that have such complex charging structures (84 different options within a 10 mile radius) each of the drivers needs a special calculator, and still can't get it right. It's a nightnmare for the customer, driver, cab firm and the tax man (boy it must be bad to have sympathy there!)
The Airline - who make people with lots of airmiles second class citizens and demote them to the back of the queue, even if you do have the super dooper global travel platinum membership.
The Retail Chain Store - who ask you to return goods to where you bought them (even though they are a global brand with retail outlets everywhere) and then when you do give you a 'credit' rather than a refund and act as if you are inconveniancing them.
A Car Hire Company - who, despite aready having all your details electronically and have you as a member with a Five Star Excellency Most Exulted Prized Presidential Customer level hand you off between front desk, back office window, driver allocator and then boy racers seemingly intent on running you down. They have also persistently tried to sell you upgrades you don't need and provide you with GPS systems that don't work.
And these examples extend into our 'business to business' lives big time with, for example, silly invoicing rules (have you seen what you need to provide for one certain ERP systems company?) red tape and incredibly complex ways of doing really simple things.
So how can you avoid these disasters from either the receiving or giving perspective? I have distilled a Top ten list based on BP Group (www.bpgroup.org) research with over 800 organizations. Also remarkably the distribution of businesses shows that companies are doing all or very little, and that goes a long way to explain why successful companies continue to create clear water between themselves and their rivals. One industry offers striking evidence with 2008 Q1 results including:
| $6.4 Billion Loss | |||
| $4.1 Billion Loss | |||
| $80 Million Loss | |||
| $54 Million Loss | |||
| $14 Million PROFIT (and that makes 58 successive quarters of Profit) |
And guess what's next? The two airlines suffering the most are now potentially merging - Delta and NWA. I suppose the thinking there might be an economy of scale where they would only lose half as much?
Southwest, now the biggest carrieir of people in the US, achieve this success by ensuring everything they do reinforces Successful Customer Outcomes including 'buying long' (purchasing fuel at fixed prices), understanding where the real customer process starts and finishes and progressively extending the value chain to include items other than just seat sales.
For every dumb inside-out example there's now a rival, usually leading the pack who like Southwest Airlines are so outside-in focused that they are more than profitable. They crush the competition with an ability to reduce costs and improve service simultaneously. So what are the lessons we can learn from the leaders?
The 'How To' Top Ten List to Achieve Outside-In Capability
1. Define your Customer
A couple of kick starters here include asking the organization 'what business are we in' and 'who is the person/group/company that provides us with revenue'. Too often organizations create a mass of so called internal customers and the resulting customer-supplier internal relationships do not contribute to achieving a Successful Customer Outcome for the real customer.
2. Articulate your Successful Customer Outcome (SCO)
Easyjet, Europes 2nd largest airline defined a relatively simple SCO - "Bums on Seats". Everything they do across people, process, systems and strategy is aligned with achieving that. Hallmark Cards based in the US out of Kansas City define their SCO as "Expression'. A good SCO will catapult performance as people better understand how their contribution adds to the achievement of the SCO.
3. Establish your alignment to achieving the SCO
Four areas to start from include people reward systems, systems capability, process maturity and strategic endeavour. If you have a scorecard or Strategy map ask yourself how many performance measures (a) contribute to the SCO, and (b) are forward looking to progressively help us get better at delivering results. We can't go forward by just looking in the rear view mirror.
4. Identify customer touchpoints - Moments of Truth (MOT)
Customers are the Cause of Work. Every interaction we have with them results in work for our organization and creates Points of Failure. Apple have done a miraculous job in creating the i-phone and integrating the MOTs into one slick interface. Rather than many key presses for a simple operation like getting the contact list those various actions have been combined into one finger swiping Moment of Truth and in doing so made the customers life simpler, easier and more successful. Once you have identified the MOTs the edict is 'remove or improve'.
5. Reveal internal hand-offs - Breakpoints (BP)
Moments of Truth spawn Breakpoints. Every customer intereaction requires us to go away and do stuff internally. The resulting activity with hand-offs between departments, people, systems and functions are Breakpoints. These Points of Failure result in unneccesary non value added work which from recent Bennu Research may be as much as 70-90% of what actually goes on in a company. Once identified Breakpoints should be removed.
6. Capture the Business Rules (BR)
Business Rules determine our behavior. They tell us what to do and when. Frequently BR's were created to prevent things going wrong and get forgotten as we change and develop our businesses. Identify them, make them explicit and challenge them.
7. Perform an Impact and Risk Assessment against Customer Needs
Are you delivering what the customer says they want, or actually what they really need? Henry Ford said "If I had asked them what they wanted they would have said faster horses". Are you creating the equivalent of faster horses and then wondering why sales are struggling? Do your processes rely on input from self-selecting customers analysed by the marketing teams? Get the customer in there. Seek the answers and then match the real need.
8. Develop an Outside-In Action Plan
Many of the inside-out plans are really obvious as the actions are more about dealing with symptoms and affects rather than the true causes of work. Truly Outside-In Action Plans are about reinforcing the acheivement of SCO's through process change and subsequently defining and managing new customer expectations. How many of us knew we needed an Apple ipod before they were invented? What about that extra fancy drink from Starbucks that you are addicted to? What about the personal loan that hits your bank account the same day?
9. Execute the Plan as you go (simple and no nonsense)
Many plans stay exactly that - just plans. The Outside-In reality demonstrates that many actions revolve around stopping the dumb stuff which shouldn't need escalated sign-offs and committees to push them through. One recent survey suggested that more than 80% of the effort around plans in inside-out organizations consisted of talking about, getting buy-in and then acheving sign-off. If you are doing dumb stuff then stop it. Now.
10. Begin the Journey to the Outside-In world now.
Waiting for exectuive sign-off or concensus will never get you off the launch pad. There's that old Irish joke of when you are lost in Eire and you stop to ask a guy directions and he ponders, stares off into space for a couple of minutes and then offers the sage wisdom "I wouldn't start from here". Most of us don't have a choice - just get started.
Examine everything you do from the CEM perspective and begin where ever you are currently to implement this 'call to arms'. Your progress as individuals, teams or improvement initiatives will get noticed soon because you will be achieving triple crown success - taking out costs, improving service, and ultimately driving more revenue to the bottom line.
"...keep things simple. People get lost when a systematic approach becomes over complex and they lose sight of the actual goal." Richard Branson, 2007
In doing so you will be creating a sustainable, agile and responsive enterprise where everyone explicitly contributes to individual, team and corporate success.
All the Very Best in your journey!
If you wish to explore the subject further immediately you can:
Download the Customer Expectation Management Toolkits (there's six)
Join us at one of our mentoring & professional coaching sessions
and qualify as a Certifed Process Professional®
Review Steve's fifth book
"Outside-In The Secret of the 21st century leading companies"
http://bit.ly/OutsideInTheSecret
References:
Business Transformation - Article part 1 of 3, Steve Towers
See
Successful Customer Outcomes (SCO’s) See http://www.bpgroup.org/category/successful-customer-outcomes/
Robert M. Pirgis– Zen and the Art of Motorcycle Maintenance (1974)
Madan Birla - FedEx delivers (2005)
What is your SCO and how aligned is your organization to achieving it?
Take the SCO test FREE here.
About the Author
Steve Towers, Co-founder and Chairman of the BP Group (www.bpgroup.org) and founder of Towers Associates, is an expert on process and performance transformation.
Steve founded the first community focused on business process management in 1992.
Steve has bases in Europe and Colorado.
Meet Steve at http://www.towersassociates.com/SBT_services.html#upcoming