James Dodkins, CCO BP Group

In 1996, Gilead introduced a “next phase” AIDS medication patients could
take in a single daily dose. The new drug, Atripla, vastly improved patient
quality of life. It vastly improved compliance. And it has given Gilead an
80% market share of medication prescribed to newly identified AIDS and HIV
positive patients, despite introduction of directly competing, single dose
products from larger competitors.

Atripla has dramatically grown Gilead’s revenue, along with producing near
40% profit margins. Plus, manufacturing one medication is far less expensive
than making 17, matching revenue gains with cost reduction. But Gilead was
not finished. Since 2006, Gilead has introduced single dosage treatment for
hepatitis-B patients, who had to follow a similarly complex medication
schedule, and has initiated development of a similar medication for
hepatitis-C.

Achieving Customer-Centricity

Through Outside-In, Gilead has become a customer-centric company
specializing in quality of life and compliance as well as quality
efficacious treatments. However, a common first reaction might be, “How
obvious.” And a second might be, “Nothing much to it.”

Gilead did experience a blinding flash of the obvious. But untold numbers of
“obvious” solutions to major customer problems go unnoticed because
companies can’t see through customer eyes­ or are afraid to do so.
Outside-In forces the issue by starting with the customer­ not the product or the
company or sales goals or profits.

“Nothing much to it?” Au contraire, there was a whole lot to it. Having
helped many a company through this type of transformative change, I can reel
off a list of likely barriers Gilead faced: reorganizing R&D to focus on
drug delivery, a very different discipline than traditional pharmaceutical
research; changing support staff roles; laying off manufacturing staff and
management; repositioning the company; and that’s just for starters. What
Gilead achieved required transformational change, which stresses
organizations and often tests their resiliency? No surprise that so many
organizations limit themselves to incremental change.

What’s new here?

As you’ve almost certainly recognized, some organizations have employed
Outside-In thinking since their inception, as has U.S. department store
chain Nordstrom’s, or at least for many years. But two things have changed.

First, Outside-In today extends far beyond identifying opportunities. While
full scale OI starts by aligning strategy with customers,it continues by
next aligning process with strategies and then technology with process. In
that order. More specifically, following opportunity identification OI
determines “what” work has to be done by “who” in order to turn opportunity
into reality. This strategic step defines organizational change as well as
changes to workflow and information flow. Then OI defines “how” the work
should be done and the technology enablement required, the tactical side.
Not only does Outside-In expand the scope of customer-centric thinking to
include implementation; but it also stretches traditional boundaries of
process to include the “what” and the “who” plus technology support ­beyond
just addressing the “how.” And that’s why we call it “Outside-In Process.”

The second change is the volume of Outside-In occurring. A number of
organizations have already completed the migration from “inside-out”
(company-centric) to Outside-In (customer-centric). Others are
opportunistically starting to migrate. And some laggards within their own
industries have moved or are moving defensively, to avoid the fate of
Circuit City, CompUSA, WAMU (Washington Mutual Bank), General Motors and
Northwest Airlines ­all notoriously inside-out companies insensitive to
customer needs.

More next week…