From the desk of James Dodkins There is no easy way to introduce a new order of things however there are some principles that can be followed based on this type of mind shift. 1. Objective and immediate. The results we achieve with Outside-In are significant and substantive e.g. Triple Crown*. Accordingly any effort should first of all identify the clear tangible benefits. 2. Talk is cheap. Fine words and phrases will not win hearts and minds without substance. Delivery is key, hence the ‘start where you are’ sentiment. In current projects (where support may be lacking) introduce the techniques within the CEMMethod by stealth. Lift the heads of those around you to think of Moments of Truth, Break Points and Business Rules for instance. “Nothing new mate, just some stuff other guys have used within… Six Sigma../..Lean../..EA../..compliance etc. (delete as appropriate)” 3. Build support. With (2) underway you will build support. That is the point to shift focus and begin the more practical discussion of where and how. 4. Go for broke. If you are extremely lucky/persuasive and have the top team already onboard go for broke. Discover the worst most problematic issues and set to righting em. By fixing the Cause you will remove the Effect.
5. Move on. It is a 400 year shift in mindset (Dee Hock, VISA founder). It will ultimately transform the planet. The jury is in fact back and the results speak for themselves. So when all looks desolate and casting your pearls before swine is depressing, remind the swine that they are part of the problem and move on.
6. Make it so. YOU ARE NOT ALONE it just feels that way when surrounded by flat-landers (doh). Learn, exchange and do.
I also want to touch on the hurdles these companies using OI as their route to customer-centricity faced or are facing. While achieving customer-centricity is a noble goalĀ even a necessity for many companiesĀit’s not easy. It requires transformational change. On the flip side, sticking to incremental change doesn’t get you there. Not even close.
Amazon.com may have achieved Jeff Bezos’s dream of becoming the world’s most customer-centric company. And Amazon had the advantage of starting from scratch with nothing preexisting in the way, except for a pervasive business culture that believes companies went broke by trying to be too nice to customers and became successful by rigorous cost control and a laser-like focus. But Bezos understood the comfort level customers would feel with Amazon sourcing whatever they need to buy (almost) instead of dealing with scores of online merchants, including some not trustworthy. He also understood that the best way to keep customers is by continually finding new ways to offer them value. These were hardly popular concepts when he started Amazon. And for straying from conventional “wisdom,” Bezos and Amazon took a pounding from pundits and analysts before proving them wrong.
Best Buy senior execs banked on their understanding of how customers really wanted to buy electronics.
Best Buy made a major shift from a “cash and carry” electronics discounter to a combined product/service provider that supports every facet of customers enjoying high-tech electronics, with some appliances thrown in for good measure. To get there, Best Buy had to re-staff the stores with better trained, higher paid employees; bring in substantial new management expertise, redesign stores from the ground up, go to store plans that flexed with local demographics and take a huge financial risk on a then untested concept of “higher touch” electronics retailing. Best Buy senior execs banked on their understanding of how customers really wanted to buy electronics. Customers rewarded them by leaving competitors in droves, until the two primary U.S. competitors collapsed.
Fed-X has been an Outside-In company from the day the first Dassault Falcon flew off from Memphis back in 1971, and it has reaped the rewards. But in 1998 Fed-X chose to break its own air courier business model by acquiring the parent of both Roadway trucking and RPS (Roadway Parcel Express, formed to compete against UPS). The customer problem the acquisition solved was visible every day at hundreds of thousands of shipping docksĀone pile of small parcels for priority air shipping by Fed-X; a 2nd pile of small parcels for routine ground shipping by UPS; and a 3rd pile of larger shipments, including single packages over 60lbs., to be picked up by various LTL (less-than-truckload) carriers that serviced varying city pairs.
For logistics managers this meant: multiple types of waybills and manifests to complete; multiple tracking systems (or no tracking); angst and errors from trying to price shipments to attach shipping charges to invoices; and three different pick-up vans, often jockeying for space at a single loading dock at the same time. But once Fed-X melded the three service into one, logistics could have just one pile of shipments for ground and air, including packages up to 150lbs.
UPS, a totally inside-out company at the time, never saw the opportunity, despite seeing the three piles every day, because they were seeing the piles from their point of view, not the customer’s.
All these cases represent achieving customer-centricity through transformational change from inside-out business practicesĀplus, overcoming inertia and defying yet more conventional “wisdom.” In the CRM space, there’s a pejorative term, “boiling the ocean,” to describe asking companies to change too much. Supposedly, attempting “excessive” change leads to certain failure and death by firing squad. Yet any company striving to achieve customer-centricity has to switch from the inside-out perspective to Outside-In. And that takes “boiling the ocean.”
Feeling the urgency for change will help some companies clear the hurdles. Not feeling the urgency for change will cause others to take face plants on the trackĀor wither away at the starting blocks.
Reactive cases
UPS was forced Outside-In (or else it would have gone upside down) by Fed-X’s ground transportation acquisition. For an extraordinarily routinized and standardized company, that meant adopting a new business model requiring disruptive process change.
More recently, Sprint was on the slippery slope, put there by inside-out thinking, including deplorable customer service. Its new CEO is taking an Outside-In view of the business to try to dig out of the hole. Too late? Maybe, maybe not. Forgiveness doesn’t always come easy. Sometimes it doesn’t come at all.
And speaking of forgiveness, General Motors is struggling for life after bankruptcyĀand trying to overcome an almost impermeable inside-out culture. Getting to Outside-In is a prerequisite for winning back customer trust. So far, reports coming out of GM have been mixed. What are you waiting for?
Sure Outside-In takes work. But don’t wait for an industry competitor to go there first. Forced change is so much harder than proactive change. And don’t wait until it’s too late and suffer the ultimate change. The Outside-In train is leaving the station, likely populated by a competitor or two or four. It’s time you hopped on board for the journey to Outside-In.
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 eyesĀ or are afraid to do so. Outside-In forces the issue by starting with the customerĀ 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 Ābeyond 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 Āall notoriously inside-out companies insensitive to customer needs.
People get confused and systems can’t cope. When production and service cycles take forever, and costs are high, chances are that most of your processes are mired in complexity. Since Victorian times, companies have felt compelled to offer consumers whatever they want, creating a myriad of choice with goods and services each having their own process and production lines.
In turn these processes are supported by complex systems and require specific skills for bespoke services and products. How often do you hear the recital āoh weāre very different around here. What we are do is unique in the industry.ā And it probably is to the detriment of the very people you are trying to please – the customer.
Consider a few of the not so hidden costs of complexity:
1. Customer inconvenience ā Your customers have to negotiate your complex system and its mind-numbing array of alternatives. Q. Just how many Moments of Truth are there?
2. Unwieldy sales processes ā The sales systems needed to support complex product lines soon grow too cumbersome, whether they require filling out complicated order forms, getting indecipherable invoices or navigating endless voice mail paths. Q. How many rules exist to āguide and directā and are now out of date slowing things to crawl? Q. How many hand-offs occur internally, and are they necessary? Eradicating those Moments of Truth, Rules and Breakpoints can change everything.
3. Impact on management ā Eventually, even your managers will find numerous services and processes too much to track. Q. How much money have you spent training people to deal with this complexity? Remove the complexity and those inside-out approaches such as Six Sigma and Lean are not required!
4. As an absolute, the greater an organizationās complexity, the less focused its management. Q. Where does all that management time get directed? Fire fighting and fixing problems caused by the nightmare of complexity. Refocus management time to helping align processes for successful outcomes.
The Customer Experience is the Process. What does that really mean and how can that help us reduce costs, grow revenues and improve the customer delivery (at the same time). In this first short presentation James Dodkins (BP Groups Chief Customer Officer) provides us with an understanding.
This week a large part of the BP Group team and leaders are in Florida for the annual PEX conference.
There is still time to register: www.pexweek.com and also sign-up for the
Certifed Process Professional Levels 1 and 2 program!
This is the place to network, learn and explore all that is process from the leading organizations, practitioners and Guru’s.
As the week unfolds we’ll be bringing you highlights and snippets.
…or that is what the Mayan’s say. The big day is 21 December 2012. Whether we experience the apocalypse, or it is just another dull day before Christmas? remains to be seen. Meanwhile we had better make use of the time in hand š
With that in mind I have turned my attention to a genius of time management, managing conflicting interests and on the whole being hugely successful at such a young age…. James Dodkins. Here are his tips for pre Armageddon (and tuning in to deliver that project success).
Thanks James….
Sort your life with this formula, agree with yourself at bedtime and Kazam…
By Steve Towers, used with permission (Thanks, Steve!)
Tips for Success as a Middle Manager
There are a number of individual and organizational actions that lead to proven success:
Move away from day-to-day operations – these belong in the front-line.
Think like senior managers
Understand the business strategy
Participate at all levels by exploiting their technical and organizational expertise
Manage change and people together.
Utilize their role as ‘Ace mediator’.
Become a practical visionary.
Become the master of change
(Full text of the article follows)
Steve Towers, Chairman of the Business Process Management Group (BPMG) and UtiliSense, offers some sage advice for survival.
Preamble: Middle Managers are under immense pressure from above and below to do more with less.
Everyone is doing it – Southern Electric International acquiring SWEB, Hanson and Eastern Group getting together, North West Water and Norweb forming United Utilities. London city is rife with more rumors – who’s next? One thing is certain and that is that everything is changing. Many utilities are anticipating, and indeed pre-empting change, by taking greater control over their own destiny through Business Process Re-engineering. Amidst all this radical change what is happening to the Middle Manager? Is the role still a viable one? What does the Middle Manager have to do to survive?
Pressure to change almost irresistible
The current Merger/Acquisition mania-sweeping the sector, coupled with nervous Regulators, Customer dissatisfaction, Director pay publicity, and the looming election are rocking the boat and causing utilities to rethink themselves. This self-appraisal is resulting in ‘new-look’ organizations which have been become Down-sized, Customer focused, Team managed with Flatter, de-layered organization structures.
Middle Manager has become an endangered species
In response to the need to cut costs some organizations have effectively scrapped the role of Middle Manager! They are viewed by many writers on change as excess ‘organizational baggage’. Mike Hammer, co-author of ‘Re-engineering the Corporation’ says in his latest eulogy ‘. . . we refer to this managerial hierarchy . . . as the Death Zone of re-engineering. Middle managers have the most invested in the status quo and stand to lose the most in re-engineering’ So that’s it? The end of Middle Management as we know it? Yes and no, the organizations that have achieved re-engineering success (ant there’s a lot who haven’t) have done so with the middle manager playing the key role. However it does involve transforming the role. Evidence is now emerging that organizations who view the middle manager as ‘dead wood’ are doomed; companies that ‘hack out’ the middle manager are destroying the greatest potential asset. Unfortunately many still believe that by scrapping this vital resource they will succeed. This is one of the reasons why so many re-engineering programs falter and subsequently fail.
Middle Manager survival
The key to success is changing the role. Middle managers are no longer up-and-down information conduits, or simple plan-control-evaluate-functionaries. They embody the core competence of the successful organization. Re-engineering success is achieved by the middle managers identifying the business breakthroughs; becoming good role models and overcoming the organizational barriers that prevent success. Senior management are beginning to appreciate that in true Pareto style, if they are to achieve the customer improved, reduced cost, flexible and dynamic business they must use and enhance this organizational role. The really successful business managers know that the pivotal position of the middle managers can convert a cynical ‘change-blitzed’ organization.
So what does the Middle manager need to do to ensure success?
There are a number of individual and organizational actions that lead to proven success: 1. Move away from day-to-day operations – these belong in the front-line. Avoid being distracted by the minutia of life. Becoming buried in the detail is a sure-fire way of missing the point. There’s a need to focus on the important more strategic issues, let the front-line worker gain the necessary knowledge and competence to develop the skills to fulfill a more rounded role, and indeed deal with the detail. 2. Think like senior managers Looking up and out provides scope for dealing with more substantive issues. Contributing to the internal ‘way forward’ debates will ensure that the Middle Managers extensive knowledge is utilized for organizational benefit. 3. Understand the business strategy What are the things which cause the organization to want to change? How can the organization direct its own future, anticipating threats and exploiting opportunity? 4. Participate at all levels by exploiting their technical and organizational expertise Many Middle Managers have internalized a great deal of technical and organizational knowledge – how their business works best, the mechanics of the way things get done, what will work and why some things fail. Spread the knowledge. It will ensure that decision making is informed and well thought out. 5. Manage change and people together. Set an example and coach the less experienced through difficulties. 6. Utilize their role as ‘Ace mediator’. Someone who is able to understand internal and external pressures on the organization and satisfy competing interests. 7. Become a practical visionary. Converting the strategic ‘top-think’ into meaningful actions, and counseling the front-liners through often difficult transformation. 8. Become the master of change Set the agenda by recognizing what is possible and harnessing the organization to achieve it. Understand the practical ways of implementing change, initiate activities that lead to ‘shifts in thinking’ about the way work is done.
Comments from the field
Asking the question ‘How can you become a more effective middle manager?’ elicited the following thought-provoking responses. Rory Chase, Managing Director of IFS International in Bedford, has first-hand experience of the challenges:
He says “the new role of the middle manager embraces three key areas – Team leadership, Change Maker and Facilitator.”
Rory explains that Team leadership is about setting an example, establishing a good role model and actively leading from the front.
Being a Change Maker means being innovative, looking for continual improvement and interpreting the needs of senior management, staff and customers alike.
The Facilitator is about getting the right things to happen.
Rory finally adds “Getting total buy-in to change.
Gaining the commitment of the organization to successful improvement.”
That’s no small agenda to accomplish, especially since ‘business as usual’ doesn’t stop as the new role develops.
In the more fragmented United States utility sector they have been experiencing this type of change for some time now. Leonard Sayles, author of ‘The Working Leader’ and a senior manager at the Center for Creative Leadership says:
“Everything has changed.
You have much more demanding customers, who are increasingly demanding customization.
These customers are not only demanding, their needs are in flux . . .
The market is itself more turbulent.”
Leonard sees the new role as completely rethinking the past, “You need to keep redesigning and adapting the (business) processes, with the power and autonomy people can have.
This type of integration can only take place through a variety of middle manager negotiations and interventions.
Mainly you have to remember that all the things you’ve been told (about managing) are totally wrong.”
Grasp the Change
Realizing this transformation will free not just yourself but the people around you. Seizing the initiative, and going for growth will truly empower you and the organization. Chocks away!
Acknowledgement:
After an early career in the Utility and then the Financial Services sector Steve Towers co-founded Utilisense Consulting, now established as a leading BPR consultancy. He is Chairman of the Business Process Management Group (BPMG) and has recently been appointed Chairman of IntraNet Solutions, a systems consultancy currently undertaking Internet/IntraNet assignments with leading blue chip companies.
Well that was back in the 20th century. Is it really any different now?
Moving Outside-In effects every aspect of how an organisation manages itself. This is especially true at the āpoint of saleā 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?
Letās go back five years and examine the sales profession. The customerās 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 āhard sellā 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 customerās needs, however five years ago, while not the most effective way, it didnāt 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 customerās desire for knowledge is still there, however they now know where to discover this. On average, according to āThe Bupa Health Pulseā survey, 58% of patients now go to the doctor after āself-diagnosingā. 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 āself-diagnoseā 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. Whatās the solution? Donāt sell to them; let them sell to themselves!
Letās 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 agentās 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, donāt 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 āhard sellā 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 companyās shortfalls during this harsh economic climate, overtake them while they stagnate and become truly customer focused. Remember itās no longer what you tell the customer about your product that matters to them; itās what Google tells them, itās what Facebook tells them, itās 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. Peopleās 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 companyās 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 āuneven playing fieldā however the playing field is just as even as before, the game is changing, are you?
James Dodkins, Head Coach, The Alexander John Group
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 Ā£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.
