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Part 1 of 4: There are four distinctly Outside-In ways that you can rethink
process and in doing so achieve Triple Crown benefits.
Let’s take them in bite sized chunks.
- Understand and applying Process diagnostics
- Identify and aligning to Successful Customer Outcomes
- Re-frame where the process starts and ends
- Rethink the business you are in
1. Understand and applying Process diagnostics:
Earlier we have mentioned Moments of Truth, those all important interactions
with customers. Let¹s take that discussion further and include other closely
related techniques for uncovering the real nature of process breakpoints
and business rules.
Firstly Moments of Truth (MOT) were first identified by Swedish management
guru Richard Normann (1946-2003) in his doctoral thesis ³ Management and
In 1989 Jan Carlson, the CEO of Scandinavian Airlines (SAS) immortalized the
phrase with his book Moments of Truth¹. He clearly linked all customer
interaction as the Causes of Work for the airline and set about eradicating
non value added MOT¹s and then improving those he couldn¹t remove.
a) Moments of Truth are a Process Diagnostic
b) They occur ANYWHERE a customer ³touches² a process
c) They can be people-to-people, people-to-system, systems-to-people,
system-to-system, and people-to-product
d) ANY interaction with a customer is a Moment of Truth
e) Moments of Truth are both process Points of Failure and Causes of Work
Carlson transformed the fortunes of SAS with this straightforward insight
all work in our organizations is ultimately caused by the Moment of Truth.
Fix them and you fix everything else.
All Moments of Truth should be eradicated and those remaining improved. In
doing so the customer experience is improved, costs are reduced and
Next let¹s review Breakpoints. Breakpoints (BP¹s) are the direct consequence
of MOT¹s and are all the internal interactions that take place as we manage
the processes caused by the customer interactions.
a) Any place that a hand-off occurs in the process is a Break Point
b) Break Points can be person to person, person to system, system to person
or system to system
c) Break Points are both process Points of Failure and Causes of Work
By identifying BP¹s we can set about uncovering actions that would in turn
remove them, or if not improve them. BP¹s are especially evident were
internal customer supplier relationships have been established say between
Information Systems departments and Operations. Empirical research suggests
that for every Moment of Truth there are an average of 3 to 4 Breakpoints.
In other words a process with ten MOT¹s will typically yield 30-40
All Breakpoints should be eradicated and if not at the very least improved.
In doing so we get more done with less, red tape is reduced, control
improves and the cost of work comes down.
The third in our triad of useful Outside-In techniques is Business Rules.
Business Rules are points within a process where decisions are made.
a) Some Business Rules are obvious while others must be ³found²
b) Business Rules can be operational, strategic or regulatory and they
can be system-based or manual
c) Business Rules control the ³behavior² of the process and shape the
³experience² of those who touch it
d) Business Rules are highly prone to obsolescence
e) We must find and make explicit the Business Rules in the process
Business Rules (BR¹s) are especially pernicious in that they are created for
specific reasons however over time their origin is forgotten but their
effect remains. For instance one Life insurance company had a delay of eight
days before issuing a policy once all the initial underwriting work was
complete. This has a serious impact on competitiveness as newcomers were
able to issue policies in days rather than weeks. After some investigation
it was discovered that the 8 day storage¹ rule was related to the length of
time it takes ink to dry on parchment paper. This rule hadn¹t surfaced until
the customer expectations changed. There are many examples of previously
useful rules evading 21st century logic and blocking the achievement of
successful customer outcomes. All Business Rules should be made explicit and
challenged in todays context.
Next time we’ll take a look at the second way to radically redefine process:
Identify and aligning to Successful Customer Outcomes
This week I’m going to pass the baton over to Ranjay Gulati.
He is the Professor of Business Administration at Harvard Business School,
and talks about ‘Outside-In’ in great detail.
Read this fantastic article here http://hbswk.hbs.edu/item/6201.html
So what are you doing to bring a smile to your loyal customers?
Companies with a worldwide presence face many challenges such as globalization, regional trading agreements and the uncertainty of the economic markets. These challenges require a coordinated approach which maximizes the benefits of a world-wide presence and at the same time provide a local focus. Global processes are the way to achieve this balance and include front end activities like customer acquisition or new business processing, support processes like information systems right the way through
to back end customer retention and financial management.
How does a company create, implement, and manage global processes?
Co-ordination. Teams need to develop a common process approach which regardless of culture speaks the same language i.e. what is the successful customer outcome (SCO)? Figuring out how work gets done and achieves the SCO is key to global process success. Implementation needs a pragmatic approach which acknowledges cultural perspectives.
Bringing a strategic multi disciplinary team together led by qualified process leaders familiar with cultural and economic challenge is a starting point.
What are the most common challenges associated with global processes?
Getting everyone on the same page. Even the way we think and speak of processes is different and so developing a common way of looking at work is critical to a successful operation. For instance the collecting the money process¹ has a very specific objective however each location may have different custom and practice how do you ensure a uniform and yet different approach? The underpinning technology that supports a global
process can be common, however the business rules that we operate to make sure our endeavor is successful often need to be different.
What is the relationship between global processes and performance
The relationship is absolute. In the 20th century we may have talked about standardization and conformity. Performance is now much more driven by the capability to act in the moment e.g. a US insurance company has the slogan think global, act local¹ which provides both a degree of uniformity and empowers the people locally to act in the best interests of the business there and then.
Why should the average employee care about global processes?
It is the understanding that there is a framework and common structure torunning the business successfully that provides assurance that senior management knows what they are doing and are operating as a team. Process is the way we get work done. It is the way we deliver value to our customers.
It¹s the way we create profits for our shareholders. This can then be encapsulated in our rewards systems and provide a framework for success, both in process, people, systems and global strategy.
(From the desk of James Dodkins)