Category: Certification

Part 2 of 4: There are four distinctly Outside-In ways that you can rethink process and in doing so achieve Triple Crown benefits.

In the first article in this four part theme we reviewed ‘Understand and applying Process diagnostics’. We now move our attention to the second  way we can rethink process forever –
Identify and aligning to Successful Customer Outcomes

“Businesses can be very sloppy about deciding which customers to seek out and acquire” Frederick F. Reichheld

The six questions we ask ourselves in this iterative process are:
I.    Who is the customer?
At first glance should be an easy answer however it is not as obvious as it seems. The ultimate customer for any profit making enterprise is the person, or company who provides the revenue by purchasing the products or services we produce. It is a matter of fact that in our inside-out legacy world we have created multiple customer-supplier relationships which include internal ‘service’ providers such as Information Services, Human Resources and so on. In mature Outside-In organisations the internal customer ceases to exist as we progressively partner to align to Successful Customer Outcomes and artefacts such as Service Level Agreements become a thing of the past.


II.    What is the Customers current expectation?
The 2006 book “Customer Expectation Management “ Schurter/Towers reviewed in detail the of creating and managing customer expectations and how through clear articulation companies such as Virgin Mobile in the US redefine their market place. In the context of the SCO map we need to understand the customers (as identified in the answer to question 1) current expectation. This often reveals both a challenge and opportunity. Customers will tell it as it is, for instance in an insurance claim process “I expect it is going to take weeks, with lots of paperwork and many phone calls”. That should tell you the current service is most likely poor and fraught with problems, delays and expensive to manage however this presents the opportunity. If that is a market condition (all insurance claims are like this) then moving to a new service proposition will be a potential competitive differentiator.  


III.     What process does the customer think they are involved with?
In the inside-out world we see process in a functional context. Therefore insurance claims are dealt with by an insurance claims department. Customer Retention is the baby of you guessed it, the Customer retention department and marketing is done by the marketing people. This split of responsibility is a legacy of functional specialisation created by relating to business as a production line. Adam Smith wrote in ‘The Wealth of Nations’ (1776) of an English pin factory.  He described the production of a pin in the following way: ”One man draws out the wire, another straightens it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head: to make the head requires two or three distinct operations: to put it on is a particular business, to whiten the pins is another … and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which in some manufactories are all performed by distinct hands, though in others the same man will sometime perform two or three of them”. The result of labor division in Smith’s example resulted in productivity increasing by 240 fold. i.e. that the same number of workers made 240 times as many pins as they had been producing before the introduction of labor division. The insights form Smith underpinned the industrial revolution however using this principle to organise ourselves in the 21st century is to a very large part the wrong approach. That is precisely what the answer to the question will tell us – “sorry sir you are talking to the wrong department, let me transfer you”. Or even getting stuck in automated response system hell “press 1 for this, 2 for that, 3 for the other and 4 if you have missed the first three options.” These are features of the labor division mindset. Ask a customer what process they think they are and you will frequently be surprised by the answer.


IV.    What do we do that Impacts customer success?
Often we ask customers to do numerous many activities which appear sensible  to receive service or indeed buy products. Relating back to the insurance claim we can see rules and procedure around how to make claims, the correct way to complete forms, the process of collating the information, the timeframes within which to claim, the way we can reimburse you and more.  Often times these restrictions that we impose made sense at some time in the past however they may no longer be relevant.

The situation is compounded by the way internal functional specialism focus on project objectives. Richard Prebble, a respected New Zealand politician writes in his 1996 book “I’ve been thinking” of the inability of organisations to think clearly of the amount of work they create and in fact “they spend a million to save a thousand every time”.
His story of the challenge within large organisations is typical “The Post Office told me they were having terrible problems tracking telephone lines … They found an excellent program in Sweden which the Swedes were prepared to sell them for $2m …. So the managers decided to budget $1m for translating into English and another $1m for contingencies. But, as the general manager explained, it had turned out to be more expensive than the contingency budget allowed and they needed another $7m. “How much”, I asked, “have you spent on it so far?” “Thirty-seven million dollars” was the reply. “Why don’t we cancel the programme?” I asked “How can we cancel a programme that has cost $37m?” they asked   “Do you believe the programme will ever work?” I asked “No, not properly” “Then write me a letter recommending its cancellation and I will sign it” The relief was visible. I signed the letter, but I knew I needed new managers.”

This type of inside-out thinking causes companies to create apparently sensible checks and controls within processes that actually manifest as customer inconvenience, cost and delay. Are you making the customers lives easier, simpler and more successful?


V.    The Successful Customer Outcome – what does the customer really need from us?
At this point we should have enough information to objectively create several statements that articulate the SCO. These statements should be specific, measureable, attainable, relevant and time-bound (SMART). Usually there will 6-10 such statements which become the actual key performance measures as move the process Outside-In. For example a North American business school completed the SCO map and created these statements from the customer perspective for an ‘Education loan application’ process:
a.    I need to receive my financial assistance
b.    I need to receive aid  before the semester starts
c.    I need to attend the classes I have chosen
d.    I do not want to call to chase progress
e.    I need to receive the correct amount
f.    I do not want to have to fix your mistakes

There is no ambiguity here and we avoid a common mistake of using management weasel words such as ‘efficient, effective, timely’ which may mean things internally but to a customer are of little help. Creating SCO statements that may be used as measures for process success is a key aid on the journey to Outside-In.


VI.    And now we reach the core of the onion. What is the one line statement that best articulates our Successful Customer Outcome? This one-liner embodies the very nature of the process and sometimes the business we are in. In ‘Thrive- how to succeed in the Age of the Customer’ McGregor/Towers (2005), Easyjet (Europe’s second largest airline) is used as an example in this quest. Their simple “Bums on Seats” SCO sentence works both from a company perspective (we must maximise utilisation, offer inexpensive seats, get people comfortably and safely to their destinations) and the customers needs  “I need a cheap safe seat to get me to the sunshine quickly without a fuss”.  

The company one liner will become part of a series which are measureable through the SCO statements and can be tested and revised depending on evolving customer expectations and needs. It may in fact ultimately replace the inside-out strategic process and provide the organisation with its Raison d’être.

Of course when we start the journey it is often sufficient to create SCO maps to help grow understanding and even if the actual SCO Map is subsequently replaced (as we take a broader view) the improvement in understanding around the customer is invaluable.

In the third part of this four part series we will review “Reframe where the process starts and ends”

Join us on LinkedIn www.linkedin.com/groups?mostPopular=&gid=1062077

Visit additional resources www.oibpm.com
Become a Certified Process Professional www.certifiedprocessprofessional.com 

Apple v.Amazon – Two Outside-In behemoths slug it out

Both organisations are VERY successful and represent the embodiment of Outside-In:
Steve Jobs “the Customer Experience is the process”, and
Jeff Bezos “..rather than ask what are we good at and what else we can do with that skill, you ask who are our customers? What do they really need? And then you say we’re going to give them that..”

In the light of recent product launches from Apple e.g. iPad2. So how do their business models compare?

Here is an excellent review of the difference and an indicator of who is going to win the race…

Outside-In Sales – by James Dodkins

Moving Outside-In effects every aspect of how an organisation manages itself. This is especially true at the ‘point of sale’ where we as customers interact with companies selling us product or service.
This article explores the shift in perspective and how organisations and sales teams can rethink their role.
The Game is changing, are you?
There has been a perspective shift in sales over the last five years, the 21st Century selling environment has changed drastically. Many businesses are finding it hard to adapt, while others are thriving and achieve record profits. How is this possible?
Let’s go back five years and examine the sales profession. The customer’s desire for knowledge was such that sales tactics such as emails or cold calls were reaping benefits hand over fist and were considered key in the sales process. Many a time the customer would not know what they wanted until it was suggested and if they did know and wanted to find out information for themselves, they had to get in front of a sales agent; this allowed for the ‘hard sell’ to begin.

The main goal of many sales agents was to get the sale at any cost. Sales agents were able to say what they wanted in order to close the sale and the customer, none the wiser, would invariably believe what they were being fed and hand over their money. 

Companies could be accused of putting many other aspects above a customer’s needs, however five years ago, while not the most effective way, it didn’t drastically effect a businesses success. Customers had money to spend and time to spend it; and sales agents rubbed their hands together, happy to take it from them. Result? Company wins, Customer loses.

 
Today there is a new breed of customer, a customer who knows what they want, an enlightened customer if you will. The immense growth of the internet has allowed customers to get the information they need at the drop of a hat. The customer’s desire for knowledge is still there, however they now know where to discover this. On average, according to ‘The Bupa Health Pulse’ survey, 58% of patients now go to the doctor after ‘self-diagnosing’. This is largely down to how readily available the information is online. This is the same with customers, they search and gain extensive knowledge around the product and ‘self-diagnose’ what they need and no longer can be told what they want.
In a complete shift from five years ago; customers now have more information yet less disposable income and as a result are now thought on as harder to sell to. What’s the solution? Don’t sell to them; let them sell to themselves! 
Let’s look at Apple for example; their sales agents are there to facilitate and support the sales process, taking a more consultative approach. The customer walks into an Apple shop knowing exactly what they want; the sales agent’s responsibility is to make sure the customer gets exactly want they want and that they leave after having a positive experience with Apple. The customer wants to buy, not to be sold to.
If you are a sales agent reading this you may well ask; what can I do to change?

Taking all into account there are many ways to become more effective. To name a few, firstly you need to make sure your product knowledge is faultless; if a customer knows more about the product than the staff, how much confidence will they have in you or the company for that matter?  Use their knowledge of the product to support them as they buy. Never be annoyed that they know as much about your product as you, show that you are impressed and complement them on this, be happy that they have practically done your job for you and given you something in common straight away. Use this to build rapport, get them involved with the product, don’t sell to them; ask them the questions that will make them sell to them self. Focus on making the customer experience a great one and you will outperform any agent stuck in the ‘hard sell’ mentality.

If you are otherwise involved in a company you may well ask; how can we rise above the rest? The best advice I can give is to move quickly, capitalise on other company’s shortfalls during this harsh economic climate, overtake them while they stagnate and become truly customer focused. Remember it’s no longer what you tell the customer about your product that matters to them; it’s what Google tells them, it’s what Facebook tells them, it’s what their friends and co-workers tell them. So leave all customers with a brilliant image of your company and you will grow exponentially more than with a website bragging about your greatness. People’s attention spans are decreasing in the digital age and according to the BBC, most internet users will spend less than one minute on an average website, so make your information quick, informative and user friendly. 
You can monitor how far along the customer has taken themselves in the sales process by how specific their search is. Common sense would dictate that the more specific the search, the further along the sales process they are. Make sure everything you do is customer-centric. Result? Company wins, Customer wins.
The planned introduction of internet sales tax, more likely than not, will bring some sales back out into the field, this allows a company’s representatives to interact face to face and deliver a truly fantastic customer experience that will perpetuate growth on all levels, however the amount of information available on the internet is still constantly increasing and is unlikely to stop, so this 21st century sales perspective shift, in my opinion, is here to stay.
To thrive in this environment companies need to take an Outside-in sales approach. Compared to five years ago many people may regard this as an ‘uneven playing field’ however the playing field is just as even as before, the game is changing, are you?
James Dodkins, Head Coach, The Alexander John Group
Review James LinkedIn profile at: http://uk.linkedin.com/in/jamesdodkins
Contact James at: james.dodkins@gmail.com
Visit Company website: http://www.alexanderjohngroup.com/
                      
 
About James:
Sales and Business Performance Transformation Coach specialising in the development of individuals and organizations.

James has a proven track record of success working with over 700 business professionals across the UK within award winning FTSE 100 companies.

He has been largely involved with high priority contracts with approximate contributions of £10.4 million a year, while continually demonstrating a high level of performance motivation.
James is currently looking to work with individuals interested in goal realisation and implementation to bring about immediate changes and long-term results towards business and life success.
As a field innovator, James has contributed regular development of coaching methodology aids to enhance
effectiveness for positive client results.

James is in the process of creating ‘Begin to Win: The Flip-it Guide to Sales and Success©’

Specialties:

  • Sales Performance
  • One to one and Group Coaching
  • Motivational Coaching
  • Goal realisation
  • Goal implementation

The Road to Hell is Paved with good intentions


This series of commentary is addressing the challenges faced by Certified Process Professionals® as they progress their organisations Outside-In.

We start with what is now a classic denial strategy and will progress over the coming weeks to review TEN (sometimes deliberate) misconceptions that seek to stop you on your journey to Successful Customer Outcomes.

‘The company has to get its own processes right first’.

In the context of Outside-In this is clearly a major mistake. As the Southwest Airlines and Apple examples demonstrate you fix the internal processes by understanding and acting on “the Customer Experience is the process”. In doing so eveything changes internally to better align to successful customer outcomes. That reduces complexity, removes costs, improves service and grows revenue.

Now if you brief is ‘in the box’ and does not yet extend to the Customer Experience the approach should be around optimisation through understanding the causes of work – moments of truth, breakpoints and business rules. Even though this is at best sub optimisation (recall the US banks Customer query process) it will take you to a much better place with significant performance improvements as you highlight and eradicate the ‘dumb stuff’.

Often times this has to be the starting point as, by definition, the way inside-out works is by the sub division of labour. You can only see the immediate walls around you and looking beyond maybe beyond your brief. Do not lose heart. Go with Optimisation (and if necessary stealth) as you introduce through existing projects the concepts of moments of truth, breakpoints and business rules. You will catch the eye of those responsible for the numbers as the changes you introduce go way beyond the traditional expectations.

Ciao, Steve

Next week… Changing the picture ‘My job doesn’t really involve the end customer. But I do have a mass of internal customers!’

Part 4 of 4: There are four distinctly Outside-In ways that you can rethink process and in doing so achieve Triple Crown benefits.

The previous three articles in this four part theme we reviewed ‘Understand and applying Process diagnostics‘, the ‘Successful Customer Outcome‘ and ‘Reframing Process for an Outside-In world‘. Now finally we move our attention to the fourth way we can rethink process forever.

Rethinking the Business you are in.

In the Southwest airlines example reviewed earlier we referred to the different viewpoints of the ‘business’ you are in. The two views – one the organisations, regarded as inside-out reflect the activities and functions undertaken. So British Airways see themselves in the business of flying airplanes and approach the customer with that product/service in mind. They set about marketing and selling the flights and hope to pull the customers to the product through pricing, availability and placement. In a slowly changing world where customers have little choice this strategy can provide a route to success.

As we have already seen the tables have turned and the enlightened customer demands so much more.
Southwest and other Outside-In companies understand this challenge and take a customer viewpoint.
What business would you say these six companies are in: Hallmark Cards, Disney, Zara, AOL, OTIS elevators, China Mobile?  Try it from the customers perspective and you’ll arrive at a very different answer – try these, expression, joy, style and comfort, community, moving people, connectivity. Yes they are very different and will reframe the way you think of the service and products you provide. Go further and look inside your existing company.

Are you still separated into functional specialist areas providing specific outputs to other departments in the so called ‘value chain’? Do you have internal ‘service level agreements’ that specify what you’ll deliver and when? How much of our internal interaction adds ultimate value for the customer? This way of organising work imposes limitations on our ability to truly deliver successful customer outcomes. The Inside-out viewpoint is inefficient, prone to red tape, is extremely risk adverse (checkers checking checkers) and slow in delivering product and service.

Many inside-out organisations actually regard customers as an inconvenience rather than the reason why they exist.

What business are you in? Past, present, future?

Join us on LinkedIn www.linkedin.com/groups?mostPopular=&gid=1062077
Visit additional resources www.oibpm.com
Become a Certified Process Professional www.certifiedprocessprofessional.com 

Part 2 of 4: There are four distinctly Outside-In ways that you can rethink process and in doing so achieve Triple Crown benefits.

In the first article in this four part theme we reviewed ‘Understand and applying Process diagnostics’. We now move our attention to the second  way we can rethink process forever –
Identify and aligning to Successful Customer Outcomes

“Businesses can be very sloppy about deciding which customers to seek out and acquire” Frederick F. Reichheld

The six questions we ask ourselves in this iterative process are:
I.    Who is the customer?
At first glance should be an easy answer however it is not as obvious as it seems. The ultimate customer for any profit making enterprise is the person, or company who provides the revenue by purchasing the products or services we produce. It is a matter of fact that in our inside-out legacy world we have created multiple customer-supplier relationships which include internal ‘service’ providers such as Information Services, Human Resources and so on. In mature Outside-In organisations the internal customer ceases to exist as we progressively partner to align to Successful Customer Outcomes and artefacts such as Service Level Agreements become a thing of the past.


II.    What is the Customers current expectation?
The 2006 book “Customer Expectation Management “ Schurter/Towers reviewed in detail the of creating and managing customer expectations and how through clear articulation companies such as Virgin Mobile in the US redefine their market place. In the context of the SCO map we need to understand the customers (as identified in the answer to question 1) current expectation. This often reveals both a challenge and opportunity. Customers will tell it as it is, for instance in an insurance claim process “I expect it is going to take weeks, with lots of paperwork and many phone calls”. That should tell you the current service is most likely poor and fraught with problems, delays and expensive to manage however this presents the opportunity. If that is a market condition (all insurance claims are like this) then moving to a new service proposition will be a potential competitive differentiator.  


III.     What process does the customer think they are involved with?
In the inside-out world we see process in a functional context. Therefore insurance claims are dealt with by an insurance claims department. Customer Retention is the baby of you guessed it, the Customer retention department and marketing is done by the marketing people. This split of responsibility is a legacy of functional specialisation created by relating to business as a production line. Adam Smith wrote in ‘The Wealth of Nations’ (1776) of an English pin factory.  He described the production of a pin in the following way: ”One man draws out the wire, another straightens it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head: to make the head requires two or three distinct operations: to put it on is a particular business, to whiten the pins is another … and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which in some manufactories are all performed by distinct hands, though in others the same man will sometime perform two or three of them”. The result of labor division in Smith’s example resulted in productivity increasing by 240 fold. i.e. that the same number of workers made 240 times as many pins as they had been producing before the introduction of labor division. The insights form Smith underpinned the industrial revolution however using this principle to organise ourselves in the 21st century is to a very large part the wrong approach. That is precisely what the answer to the question will tell us – “sorry sir you are talking to the wrong department, let me transfer you”. Or even getting stuck in automated response system hell “press 1 for this, 2 for that, 3 for the other and 4 if you have missed the first three options.” These are features of the labor division mindset. Ask a customer what process they think they are and you will frequently be surprised by the answer.


IV.    What do we do that Impacts customer success?
Often we ask customers to do numerous many activities which appear sensible  to receive service or indeed buy products. Relating back to the insurance claim we can see rules and procedure around how to make claims, the correct way to complete forms, the process of collating the information, the timeframes within which to claim, the way we can reimburse you and more.  Often times these restrictions that we impose made sense at some time in the past however they may no longer be relevant.

The situation is compounded by the way internal functional specialism focus on project objectives. Richard Prebble, a respected New Zealand politician writes in his 1996 book “I’ve been thinking” of the inability of organisations to think clearly of the amount of work they create and in fact “they spend a million to save a thousand every time”.
His story of the challenge within large organisations is typical “The Post Office told me they were having terrible problems tracking telephone lines … They found an excellent program in Sweden which the Swedes were prepared to sell them for $2m …. So the managers decided to budget $1m for translating into English and another $1m for contingencies. But, as the general manager explained, it had turned out to be more expensive than the contingency budget allowed and they needed another $7m. “How much”, I asked, “have you spent on it so far?” “Thirty-seven million dollars” was the reply. “Why don’t we cancel the programme?” I asked “How can we cancel a programme that has cost $37m?” they asked   “Do you believe the programme will ever work?” I asked “No, not properly” “Then write me a letter recommending its cancellation and I will sign it” The relief was visible. I signed the letter, but I knew I needed new managers.”

This type of inside-out thinking causes companies to create apparently sensible checks and controls within processes that actually manifest as customer inconvenience, cost and delay. Are you making the customers lives easier, simpler and more successful?


V.    The Successful Customer Outcome – what does the customer really need from us?
At this point we should have enough information to objectively create several statements that articulate the SCO. These statements should be specific, measureable, attainable, relevant and time-bound (SMART). Usually there will 6-10 such statements which become the actual key performance measures as move the process Outside-In. For example a North American business school completed the SCO map and created these statements from the customer perspective for an ‘Education loan application’ process:
a.    I need to receive my financial assistance
b.    I need to receive aid  before the semester starts
c.    I need to attend the classes I have chosen
d.    I do not want to call to chase progress
e.    I need to receive the correct amount
f.    I do not want to have to fix your mistakes

There is no ambiguity here and we avoid a common mistake of using management weasel words such as ‘efficient, effective, timely’ which may mean things internally but to a customer are of little help. Creating SCO statements that may be used as measures for process success is a key aid on the journey to Outside-In.


VI.    And now we reach the core of the onion. What is the one line statement that best articulates our Successful Customer Outcome? This one-liner embodies the very nature of the process and sometimes the business we are in. In ‘Thrive- how to succeed in the Age of the Customer’ McGregor/Towers (2005), Easyjet (Europe’s second largest airline) is used as an example in this quest. Their simple “Bums on Seats” SCO sentence works both from a company perspective (we must maximise utilisation, offer inexpensive seats, get people comfortably and safely to their destinations) and the customers needs  “I need a cheap safe seat to get me to the sunshine quickly without a fuss”.  

The company one liner will become part of a series which are measureable through the SCO statements and can be tested and revised depending on evolving customer expectations and needs. It may in fact ultimately replace the inside-out strategic process and provide the organisation with its Raison d’être.

Of course when we start the journey it is often sufficient to create SCO maps to help grow understanding and even if the actual SCO Map is subsequently replaced (as we take a broader view) the improvement in understanding around the customer is invaluable.

In the third part of this four part series we will review “Reframe where the process starts and ends”

Join us on LinkedIn www.linkedin.com/groups?mostPopular=&gid=1062077

Visit additional resources www.oibpm.com
Become a Certified Process Professional www.certifiedprocessprofessional.com 

Part 1 of 4: There are four distinctly Outside-In ways that you can rethink process and in doing so achieve Triple Crown benefits.

I explore these more thoroughly in the new book however for now let’s take them in bite sized chunks.
•    Understand and applying Process diagnostics
•    Identify and aligning to Successful Customer Outcomes
•    Reframe where the process starts and ends
•    Rethink the business you are in

Let’s start with…
1. Understand and applying Process diagnostics:
(These will be familiar to CPP people however a refresher is always nice)
Earlier we have mentioned Moments of Truth, those all important interactions with customers. Let’s 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 “Management and Statesmanship” (1975).
In 1989 Jan Carlson, the CEO of Scandinavian Airlines (SAS) immortalized the phrase with his book ‘Moments of Truth’. He clearly linked all customer interaction as the Causes of Work for the airline and set about eradicating non value added MOT’s and then improving those he couldn’t remove. 
a)    Moments of Truth are a Process Diagnostic
b)    They occur ANYWHERE a customer “touches” 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 organisations 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 productivity maximised.

Next let’s review Breakpoints. Breakpoints (BP’s) are the direct consequence of MOT’s 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 BP’s we can set about uncovering actions that would in turn remove them, or if not improve them. BP’s 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 MOT’s will typically yield 30-40 Breakpoints.
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 “found”
b)    Business Rules can be operational, strategic or regulatory and they can be system-based or manual
c)    Business Rules control the “behavior” of the process and shape the “experience” 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 (BR’s) 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 storage’ rule was related to the length of time it takes ink to dry on parchment paper. This rule hadn’t 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

Join us on LinkedIn www.linkedin.com/groups?mostPopular=&gid=1062077

Visit additional resources www.oibpm.com
Become a Certified Process Professional www.certifiedprocessprofessional.com 

    How do you start the journey to Advanced BPM/Outside-In?

    If I scan the fifteen or so new OI initiatives in large corporations I have worked closely with (in the last three years) I would say 80% of that work is through what you can think of is a 1-2-3 project cycle.

    1. Start where you are – deploy, for instance the CEMMethod 21 techniques, especially the Moments of Truth, Breakpoints and Business Rules, in whatever is your remit. Just get going.

    2. On the back of that success move upstream and downstream in the particular process. You will have internal advocates at this stage who understand how to do this stuff. At this point the fun and the wildfire starts 🙂

    3. Take the ‘boil the ocean’ proposition to the top team. Ask for the biggest current organisation wide challenge and relate the internal benefits (Project 1&2, the external case studies, the videos of the CEO’s, the HBR articles, the Business week case studies blah blah) They will love the talk of results – reducing costs, improving revenue, enhancing service. Whenever have you talked to a top team and somebody has turned round and said those elements were not part of this years agenda eh?

    Bingo – six months in and you’re on the organisation wide Outside-In transformation. 

    There is an active thread started by Dick Lee on this theme at http://bit.ly/aY8a4H  

    Get the latest book from www.outsideinthesecret.com

     

    Part 2 of 4: There are four distinctly Outside-In ways that you can rethink process and in doing so achieve Triple Crown benefits.

    In the first article in this four part theme we reviewed ‘Understand and applying Process diagnostics’. We now move our attention to the second  way we can rethink process forever –
    Identify and aligning to Successful Customer Outcomes

    “Businesses can be very sloppy about deciding which customers to seek out and acquire” Frederick F. Reichheld

    The six questions we ask ourselves in this iterative process are:
    I.    Who is the customer?
    At first glance should be an easy answer however it is not as obvious as it seems. The ultimate customer for any profit making enterprise is the person, or company who provides the revenue by purchasing the products or services we produce. It is a matter of fact that in our inside-out legacy world we have created multiple customer-supplier relationships which include internal ‘service’ providers such as Information Services, Human Resources and so on. In mature Outside-In organisations the internal customer ceases to exist as we progressively partner to align to Successful Customer Outcomes and artefacts such as Service Level Agreements become a thing of the past.


    II.    What is the Customers current expectation?
    The 2006 book “Customer Expectation Management “ Schurter/Towers reviewed in detail the of creating and managing customer expectations and how through clear articulation companies such as Virgin Mobile in the US redefine their market place. In the context of the SCO map we need to understand the customers (as identified in the answer to question 1) current expectation. This often reveals both a challenge and opportunity. Customers will tell it as it is, for instance in an insurance claim process “I expect it is going to take weeks, with lots of paperwork and many phone calls”. That should tell you the current service is most likely poor and fraught with problems, delays and expensive to manage however this presents the opportunity. If that is a market condition (all insurance claims are like this) then moving to a new service proposition will be a potential competitive differentiator.  


    III.     What process does the customer think they are involved with?
    In the inside-out world we see process in a functional context. Therefore insurance claims are dealt with by an insurance claims department. Customer Retention is the baby of you guessed it, the Customer retention department and marketing is done by the marketing people. This split of responsibility is a legacy of functional specialisation created by relating to business as a production line. Adam Smith wrote in ‘The Wealth of Nations’ (1776) of an English pin factory.  He described the production of a pin in the following way: ”One man draws out the wire, another straightens it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head: to make the head requires two or three distinct operations: to put it on is a particular business, to whiten the pins is another … and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which in some manufactories are all performed by distinct hands, though in others the same man will sometime perform two or three of them”. The result of labor division in Smith’s example resulted in productivity increasing by 240 fold. i.e. that the same number of workers made 240 times as many pins as they had been producing before the introduction of labor division. The insights form Smith underpinned the industrial revolution however using this principle to organise ourselves in the 21st century is to a very large part the wrong approach. That is precisely what the answer to the question will tell us – “sorry sir you are talking to the wrong department, let me transfer you”. Or even getting stuck in automated response system hell “press 1 for this, 2 for that, 3 for the other and 4 if you have missed the first three options.” These are features of the labor division mindset. Ask a customer what process they think they are and you will frequently be surprised by the answer.


    IV.    What do we do that Impacts customer success?
    Often we ask customers to do numerous many activities which appear sensible  to receive service or indeed buy products. Relating back to the insurance claim we can see rules and procedure around how to make claims, the correct way to complete forms, the process of collating the information, the timeframes within which to claim, the way we can reimburse you and more.  Often times these restrictions that we impose made sense at some time in the past however they may no longer be relevant.

    The situation is compounded by the way internal functional specialism focus on project objectives. Richard Prebble, a respected New Zealand politician writes in his 1996 book “I’ve been thinking” of the inability of organisations to think clearly of the amount of work they create and in fact “they spend a million to save a thousand every time”.
    His story of the challenge within large organisations is typical “The Post Office told me they were having terrible problems tracking telephone lines … They found an excellent program in Sweden which the Swedes were prepared to sell them for $2m …. So the managers decided to budget $1m for translating into English and another $1m for contingencies. But, as the general manager explained, it had turned out to be more expensive than the contingency budget allowed and they needed another $7m. “How much”, I asked, “have you spent on it so far?” “Thirty-seven million dollars” was the reply. “Why don’t we cancel the programme?” I asked “How can we cancel a programme that has cost $37m?” they asked   “Do you believe the programme will ever work?” I asked “No, not properly” “Then write me a letter recommending its cancellation and I will sign it” The relief was visible. I signed the letter, but I knew I needed new managers.”

    This type of inside-out thinking causes companies to create apparently sensible checks and controls within processes that actually manifest as customer inconvenience, cost and delay. Are you making the customers lives easier, simpler and more successful?


    V.    The Successful Customer Outcome – what does the customer really need from us?
    At this point we should have enough information to objectively create several statements that articulate the SCO. These statements should be specific, measureable, attainable, relevant and time-bound (SMART). Usually there will 6-10 such statements which become the actual key performance measures as move the process Outside-In. For example a North American business school completed the SCO map and created these statements from the customer perspective for an ‘Education loan application’ process:
    a.    I need to receive my financial assistance
    b.    I need to receive aid  before the semester starts
    c.    I need to attend the classes I have chosen
    d.    I do not want to call to chase progress
    e.    I need to receive the correct amount
    f.    I do not want to have to fix your mistakes

    There is no ambiguity here and we avoid a common mistake of using management weasel words such as ‘efficient, effective, timely’ which may mean things internally but to a customer are of little help. Creating SCO statements that may be used as measures for process success is a key aid on the journey to Outside-In.


    VI.    And now we reach the core of the onion. What is the one line statement that best articulates our Successful Customer Outcome? This one-liner embodies the very nature of the process and sometimes the business we are in. In ‘Thrive- how to succeed in the Age of the Customer’ McGregor/Towers (2005), Easyjet (Europe’s second largest airline) is used as an example in this quest. Their simple “Bums on Seats” SCO sentence works both from a company perspective (we must maximise utilisation, offer inexpensive seats, get people comfortably and safely to their destinations) and the customers needs  “I need a cheap safe seat to get me to the sunshine quickly without a fuss”.  

    The company one liner will become part of a series which are measureable through the SCO statements and can be tested and revised depending on evolving customer expectations and needs. It may in fact ultimately replace the inside-out strategic process and provide the organisation with its Raison d’être.

    Of course when we start the journey it is often sufficient to create SCO maps to help grow understanding and even if the actual SCO Map is subsequently replaced (as we take a broader view) the improvement in understanding around the customer is invaluable.

    In the third part of this four part series we will review “Reframe where the process starts and ends”