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.
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.
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.
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 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……

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BPM and Process Excellence is changing the world

Join the growing number of monthly readers following Steve Towers and his BPM column on the PEX network, BPM Leader and the BP Group – 8,600 strong now and growing.
Steve has consistently received great reviews by his clients and readers and it seems people are telling their colleagues to check these columns out. 
Steve is the founder and CEO of the BP Group (established in 1992), a Keynote speaker and workshop leader with the PEX Network, and featured author on the BPM Leaders blog.  He is the author of FIVE books on business process and performance transformation and is a member of the prestigious California based BPM Forum.
Because of his activities with the BP Group, leading international corporates, including Citi, Apple, Disney, Zara and many others, Steve can be found always at the pragmatic leading edge of what is going on in Advanced BPM and Outside-In.   He believes that his work with these organisations and his exposure to a broad range of situations through global leaders and their approaches provides insight into the problems and issues leading BPM professionals face every day. 

Steve says that these experiences have caused him to look at BPM in a remarkable way. As the catalyst for global transformation BPM and process excellence is the means to realign our organisations on behalf of its employees and customers to achieve spectacular results.
If you’d enjoy sharing some of the insights and the secrets of 21st century organisation success you will enjoy his columns.

You can find Steve’s latest columns at on:


The Bezos mandate – is it still working?

Back in the day (well 2002 to be precise) Jeff Bezos rallied Amazon with the following directive:

1) All teams will henceforth expose their data and functionality through service interfaces.

2) Teams must communicate with each other through these interfaces.

3) There will be no other form of interprocess communication allowed: no direct linking, no direct reads of another team’s data store, no shared-memory model, no back-doors whatsoever

4) It doesn’t matter what technology they use

5) All service interfaces, without exception, must be designed from the ground up to be
externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions.

6) Anyone who doesn’t do this will be fired.