During my encounters with global business leaders, I am frequently asked the question of what is the difference between Lean Six Sigma (LSS) and Outside-In thinking and practice?
Often the question is prompted as a consequence of the huge investment many large corporations have made into up-skilling their people and processes to LSS. Many times those same executives are querying the return on those investments and hence now looking at more progressive alternative approaches to evolve their business performance.
For those familiar with Outside-In thinking and practice the difference is fundamental however if you haven’t been exposed to such training or working in one of the worlds leading Outside-In companies it would be good to have a short comparison of the key thematic differences.
In the interests of full disclosure, I was an Industrial Engineer qualified as a Lean Master and Six Sigma Master black belt and I see and witness the significant differences every day. Does the implication of the difference mean we should abandon LSS? No, far from it. In fact, integrating the Outside-In perspectives into existing programs is a proven tried and tested way of advancing LSS to the centre stage of winning performance.
Case in point is a North American plastics extrusion company. They had previously been a powerhouse of Six Sigma, grown into and become a Lean ‘Toyota way’ dynamo only to run into the problem of diminishing returns.
Investing just as much in getting better the decreasing returns and eroding margins made it an issue at the top table. In true pragmatic Texan style (their CEO is from Dallas) they embraced Outside-In big time. Over 6-9 months people were upskilled for the Customer Age and then let loose to transform the organization. Not only did they save their bacon they are now a world-leading company. And what do they call their program? OIL – Outside-In Lean. Nice eh?
So be pragmatic. Look for the bridges from here to there and you can have the best of both worlds.
Table 1: Comparison of some differences between Lean Six Sigma and the CEMMethod™.
Lean Six Sigma
Customer Experience Management/Outside-In
Customer Digital Age
Improve current work
Align to achieve SCO’s
Process will exist at the end of a review
Processes may be removed
Focused on improving outputs
Focused on delivering Outcomes
Triple Crown achievement (Cost/Service/Revenue)
Accepts the functional hierarchy
Proposes the appropriate structure to deliver SCO’s
Outside-In is a regular theme during most of my keynotes, not least this last week here in Florida. A question asked from the floor related to the 30-second elevator test “can you explain to the CEO what this stuff is, why it is different, and how it reframes the work we do?”. I guess I was about to fudge and say this needs more than 30 seconds, and then remembered my two-slide explanation!
So, for those guys looking for a simple explanation, these two slides will do the job. I have put a bit of narrative in there also.
120+ in Florida at the keynote, 16 January 2018
The old, industrial-age traditional way of doing business. We make products (and services). We look for the market to sell them in. We segment customers by circumstance and pitch our products to those segments. We add variations to the products to better fit certain niche segments. We build back-end systems and digital capabilities in this increasingly complex world. We are rigid, functionally oriented and abhor change.
The new Outside-In customer-centric way. We identify the customers we would like to do business with. We understand their needs (even when they may not know them themselves) and specific Successful Customer Outcomes (SCO’s). We categorise customers by need. We then create the capability to deliver to these categories the SCO’s (both products, people and digital). Progressively we manage new and existing customer expectations to deliver success without exception. We are agile, innovative and attuned to 21st century needs.
Let me know if this works for you.
For the curious, the original slides came from a deck presented as a keynote in Sydney, Australia 3 years ago.
You can access that here: http://bit.ly/SydneyPEX