By Dick Lee
Principal, High-Yield Methods
Steve Towers
Founder, Vice President, BP Group
Want to watch change in progress? Just look at the turnaround in buyer-seller relations in industrialized nations. Business is having a âGalileo moment.â After assuming for decades customers revolve around companies, guess what? Business is learning its world is round, and companies revolve around customersâat least thatâs the rotation for companies planning to stick around a while.
But learning this lesson rarely translates into doingâat least doing enough to become customer-centric. Companies donât switch to revolving around customers with a memo saying, âBeginning at noon next Monday, weâre going to be nice to customers.â Obviously. But they donât get there with 1-to-1 marketing strategies, either. Or with sales, marketing and service using CRM software. Or with implementing more customer-friendly service policies. Or with customer analytics. Or with social networking. Or with all the above tactics. No matter what consultants and software salespeople claim.
Moving to a customer-centric business model goes way beyond these incremental changesâand way beyond the comfort levels of many companies. Organizations achieve customer-centricity through transformative changeâstarting with new beliefs and new cultures, which give rise to new strategies plus new work that converts strategies into actions. And to further the degree of change, new work dominoes change from organizational realignment to redesigned technology support.
Tough to achieve? You betcha. But some companies have already made the transition. In fact, some companies have been customer-centric since formation. Theyâre the lucky ones. But how did companies having to migrate to customer-centricity get there? Thereâs one common factor,âOutside-In.â They didnât call their journey âgoing Outside-In.â In fact the term only surfaced several years ago, in conjunction with a Virgin Mobile customer-centric initiative. But theyâve all followed the same pattern. Now, more companies are following in their footsteps. And when something new happens frequently enough, spurred by champions âspreading the gospel,â we give it a name (hopefully not a three-letter acronym). Hence âOutside-In.â
So what is it?
Outside-In is the fusion of planning and process design into one, integrated, customer-centric activity.
The planning part redesigns strategies from a thoroughly customer perspective. And by âstrategiesâ I donât mean marketing, promotion, branding, stuff that advertising agencies do. Iâm talking products, services, delivery, in some cases core business directionâall invented or renewed with an adult dose of innovation. It starts with âfinding your inner customer,â âseeing through customer eyes,â âstanding in customer shoes,â or whatever you want to call it. And results in companies raising the competitive bar, often high enough that others canât clear it. If, that is, new strategies trigger new work.
Thatâs the process piece. Defining what work should be done to implement new strategies; who should do it; how it should be done; and Âenabling technology[1]requirements. Some call this âcustomer-centric infrastructure,â others âcustomer-optimizing operations,â but it doesnât matter. Just no TLAs.
Worked together, these two Outside-In elements align strategy to customers; process to strategy; and technology to processâcreating the spine of a customer-centric company.
Outside-In creates a framework for designing, organizing and simplifying the migration to customer-centricityâtrue customer centricity. The type that adds new value to customers as the only reliable means of adding new value to the company. Not that the transition is ever âsimple.â But business will have to get there. Because when one player in a sector goes Outside-In, others will have to follow, or risk being left to an unhappy fate.
Just look at what happened to consumer electronics chains in the U.S. once Best Buy went Outside-In. Circuit City and CompUSA might as well have been bugs beneath a work boot. Squish. But thatâs the usual fate when a competitor beats you to putting customers in the center of your business circle. Squish.
True, some companies survive by scurrying to change reactively. UPS has stayed profitable while scrambling to match customer-centric moves by FedEx. But how many companies have the strength and resources of UPS?
Despite the probability of facing dire consequences sooner or later, many change-averse companies continue to sit rather than change. As a past client once said to me, âI know we have to change, but we canât stop doing what got us here.â They circle the wagons to protect themselves from customers fighting to take over the center of their circle. Or, perhaps a better analogy, they engage in a tug-of-war with customers over who controls buyer-seller relationships. Just one problem. Thereâs an 800 pound gorilla on the customer end of the rope, and she ainât budging. And just wait until she gets impatient and starts pulling. When she does pull, companies will have to get Outside-In quickly, if theyâre not alreadyâor risk going upside-down.
Donât wait until youâre forced to go Outside-In. Proactive change works so much better than reactive. Twice the gain with half the pain. So best to get a handle on Outside-In now, while you can still leave competitors behind.
[1] We italicized the four Outside-In process components because they represent transformative change in the process world. This isnât your fatherâs process. For that matter, itâs likely not yoursâyet.
Dick Lee
Dick Lee is the founder of High-Yield Methods, a Outside-In consultancy focused on helping clients align strategy with customers, process with strategy and technology with process. In 1996, HYM launched the first, formal, Outside-In process approach, Visual Workflow. In addition to consulting with clients including American Express, Honeywell and Microsoft, Dick is a speaker, educator and author of several books and numerous white papers and journal articles.
Dick is an Executive Advisor for Towers Associates and sits on the board of the BP Group.
Steve Towers
Steve Towers is the founder of the Business Process Management Group a global business network exchanging ideas and best practice in Business Process & Performance Management, Transformation and Process Improvement. He works with many of the leading fortune 500 companies as a mentor, coach and sometimes consultant specializing in the implementation of performance improvement, process change and transformation. He has written several books, many business articles and appears on radio and TV. Steve previously worked for Citibank where he led restructuring and business process transformation programs both in the US and Europe.
Steve is an Executive Advisor for High-Yield Methods and sits on the board of the BP Group.
The BP Group
The BP Group is a global ‘not for profit’ business network originally founded in 1992.
As a ‘not for profit’ the vision is to connect and network people interested in significantly improving organisation processes and as a consequence business performance. Our mission is to help improve individual and corporate performance through advanced process management.