Leaning to Outside-In..

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 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 Executive Partner, Greystone Group 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 an English 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 recent Best in Class 2009 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.

The Death knell for BPR, TQM, Lean and Six Sigma?
Some see Outside-In as the death knell for approaches developed during the late 20th century. Not so as that 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?

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	Networking	http://bit.ly/I0tvw
Customer Capitalization – Roger Martin, Dean of Faculty, Rottman Business School	Article	HBReview, Feb 2010
Don’t give customers what they think they want Steve Towers	Article	http://bit.ly/3xUIn4
Evolution of Approaches BP Group	Research	http://bit.ly/Fw5Kv
Outside-In Interview with Blog Radio’s Gienn Weiss	Podcast	Outside-In (15 mins)
The Best Performing companies Millward Optimoor	Research	http://bit.ly/uAyVW