It was a great pleasure visiting San Francisco for the 4th time this year and hosting the CPP Masters session at the Waterfront. We had a terrific time consolidating Outside In.
From l>r: Grace, Angela, Mark, Steve, Kandice, Jamie, Moosa, Nivesh
This was one of those sessions that transcends what we did in a few days. Moosa and Nivesh will return to Qatar, Jamie to Phoenix, Kandice to Denver (yay!), Steve to Singapore, Mark to the world of education, Angela here in the Bay, and Grace to Washington DC.
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.
Many decades ago, as a trainee industrial engineer I was introduced to the works of Rudyard Kipling[1].
In the context of the Customer Age his sage wisdom lives on.
A renowned English writer (born in Mumbai) he influenced my life from that get go and here I pay homage to his life changing verse Six Honest Serving Men
1.Why What Who Where When How
Why do you want to measure your customer experience? We want to understand the current state of our experience and see how it impacts the bottom line, revenue growth and shareholder value.
Why is that important? We know that a great customer experiences leads to significantly enhanced customer lifetime value. Customers buy more, stay longer and become a part of your Awareness for future customers.
Why do you need a measurement for this? We need to get scientific about the customer experience. We need to understand where we should focus to profitably improve experiences, and to measure the ongoing evolution of Customer Experience Management.
Why is this important? Existing measures of Customer Experience are subjective and prone to bias, whether that is sample size, emotional influence or even the time of day. It is not realistic to base our future growth on a set of flaccid anecdotal measures.
2.Why What Who Where When How
What is the first step? We need get factual. What are the real measures? The hard noised objective and accessible metrics that move beyond the soft and fluffy emotional feedback.
What system do we need in place? Something that is repeatable and predictable. Certainly not the latest anecdotes from the customer service
What is the priority? To coin a phrase – where the rubber hits the road. In a very direct sense it is where the customer interactions are taking place and where the reality of the service and product offering happens. We need to measure the real interaction, less so the feelings created.
3. Why What Who Where When How
Who is the most important person in your organization? Who is the ultimate cause of all the work? The answer is the same – yes, the customer of course.
Who should lead the change to understand and develop the Customer Experience? Well that isn’t a bunch of guys doing strategy in their glass ivory towers remote to the business. Guess what. It is everyone of us, as ultimately we all walk in the customer shoes.
Who engages the organization for success? Vision is essential. Moving beyond the industrialized function specialist silos’ to the sunny uplands of customer awareness requires fortitude and leadership. It is certainly not for the feint of heart.
4. Why What Who Where When How
It is not top down, strategy driven.It isn’t even bottom up frontline informed. Where have those ideas come from? Yes the industrialized world of the 1700’s. Wind forward to now. We are a bunch of able and skilled individuals aligned to successful customer outcomes (or we should be)
5. Why What WhoWhere When How When? What are you waiting for? You do not really want to go down the road of Kodak, Nokia and Blackberry? Surely. The customers have changed. Have you? Or is the management team doing the same old same old? Light the fire. Make a noise. If you don’t you know all to well what will be next.
6. Why What Who Where When How
It is not top down, strategy driven.This is the easiest of all. It starts with you. The messages you relate. The language you use. The people you influence. Every conversation and internal exchange is an opportunity to win hearts and minds. Is it tough? Yes of course it is, however was anything ever worth doing easy? The choice is yours.
There is no excuse for complexity. It is a consequence of muddled thinking and a lack of understanding of the true goal of the organization, which is creating Successful Customer Outcomes.
Complexity has developed as organizations have added new routes to market, new ways of delivering service, new enterprise IT systems and a myriad of improvement approaches. Each internal functional specialism has developed a mindset to optimize their part of the organization, sometimes at the expense of others. The unwieldy complexity that results has caused a reaction primarily aimed at the need to create order out of this chaos, as if accepting that complexity itself as a right to be. This is not so. Let us unravel the muddle of complexity once and for all.
All work in an organization is fundamentally created by the need to provide product or service to the customer. Everything else is a consequence of that need, which creates value for the shareholders and creates a livelihood for the work force. All else follows.
Furthermore all interactions in meeting the needs for customers are the cause of all work within an organization. These interactions, or Moments of Truth[i], create work in so far as we need to attend to a request internally.
In doing so we interact with our colleagues, systems and other internal processes, and create internal Moments of Truth, which can be referred to as Breakpoints[ii]. The way we deal with Moments of Truth and Breakpoints is underpinned by Business Rules[iii] which may be thought of as ‘decision points within processes’.
These three entities determine the shape of our organization, the internal landscape of how we do work. The resulting activities from Moments of Truth, Breakpoints and Business Rules create the very processes themselves. In fact process is simply an effect caused by the way we choose to interact and guide the customer to obtain our products or service.
Think about that – process is an effect. If that is the reality then the vast range of tools and techniques created in the last century, and sometimes before, are fixing an effect. It is like taking painkillers for discomfort and nothing more. If we are not getting to grips with the causes of the pain it will surely get worse and as we discover, stronger pain killers are then required.
That’s the rub. We have been systematically fixing the wrong things and is it any wonder that change doesn’t stick? Have you ever had that feeling that this is the same project challenge as before, just dusted off and here we go again? It is because we are not fixing the causes of work, and while we continue to ignore the causes the complexity worsens, costs increase and service suffers.
Einstein put it well when he said “We can’t solve problems using the same kind of thinking we used when we created them”
Every two years, PEX Network undertakes a State of the Industry research project to better understand general trends in how companies are approaching operational excellence.This infographic summarizes the results of our 2013-2014 benchmarking survey.
Download this infographic to find out key trends in approaches, projects, budgets, and investment plans in process excellence for the year ahead.
And don’t forget to stay tuned for the release of our State of the Industry report in the coming weeks!
You can access and download the resources that will provide an overview of the value of becoming scientific about the Customer Experience. Meanwhile Customer Experience Mapping gets a kick in the pants as we integrate ABACUS (the BPGroup toolkit) to demonstrate a generic process across several channels.
