Monthly Archives: August 2009

Two Minute Test: How Far Are You Along the Continuum From Inside-Out Process (Company-centric) to Outside-In (Customer-centric)

No company or consultant I know of is at either end of the spectrum, nor should they be. But the vector definitely points towards Outside-In and customer-centricity. Rate yourself between 1O (the first statement is correct) and 0 (the second statement is correct) on each of these 10 statement pairs.

O/I:  You focus on finding breakthrough new ways to create customer value

I/O:  You feel you’re already creating enough value

 

O/I:  You try to deliver more value by changing what work you do and who does it

I/O:  You try to add value by changing how you work

 

O/I:  You redraw functional boundaries and merge or eliminate functions to align with customers

I/O:  You keep your organization the same and expect customers to adapt to it

 

O/I:  You base decisions for improving work purely on serving customers

I/O:  You base decisions for improving work purely on reaching internal goals

 

O/I:  You let customers decide how you should operate

I/O:  You let senior managers and function leaders decide how to operate

 

O/I: You consider redesigning your work, including company policies, the first step in building customer relationships

I/O: You consider building customer relationships solely up to sales, marketing and service

 

O/I:  You empower customer contact employees to make independent decisions

I/O:  You punish customer contact employees for varying from tightly defined policies

 

O/I:  You consider employee training far more important to customers than promotion

I/O:  You fund promotion to the hilt and pay lip service to training

 

O/I:  You consider adapting products, services and work to suit customers your first priority

I/O:  You consider brand-building your top priority

 

O/I:  You would never consider buying customer-related technology without first redesigning work to create maximum customer value with or without the technology

I/O:  You consider customer-related technology the best way to influence customers while controlling costs

Now add up your 10 scores. If you finish under 30, you or your company are probably so far behind the customer learning curve that you’re terminal. Scores in the 30-50 range would indicate that you’re behind, but not terminal. Scores in the 50 – 70 range indicate that you’re probably keeping pace with business trends. In the 70 – 90 range you’re leading edge. Scores over 90 indicate you’re in danger of sliding down a razor blade.

Understanding Outside-In Process

To fully understand Outside-In Process, commonly called “Outside-In” or “OI,” you first have to step outside your current perception of the process discipline. OI takes many secondary elements of traditional process and pushes them to the forefront–and adds new elements at the front and back ends of process design.

Shattering the traditional process model

Traditional process design, which includes approaches such as Six Sigma, Lean, TOC and TQM) works “inside-out.” Traditional approaches focus on what’s happening internally, and the primary goals are typically internal measures. In recent years, process professionals driving design have started paying much more attention to customer needs. Despite this enhanced sensitivity to customer needs, however, customer considerations influence process design as a conditioner rather than drive process design, as with Outside-In.

Scope leap

Outside-In brings “scope leap,” rather than scope creep, to process design. OI starts by developing customer vision. We often call this “finding your inner customer.” By seeing through customer eyes, we can much more readily appreciate customer concerns–and we can often identify unarticulated needs subconsciously waiting for business to discover how to fulfill them. An excellent example of an unarticulated need is customers accepting low service electronics retailing as the price for paying less than at boutique stores–until Best Buy transformed itself into a low price, high service and demographically sensitive seller. Best Buy broke the electronics retailing mold to deliver what customers thought they couldn’t have–but BB understood they yearned for.

But why do we call such customer vision “process?” Because business concepts by themselves deliver no customer value. The implementation of concepts–the work designed to make them the reality–delivers the value. And designing work is pure process, or should be. Which makes developing customer-centric business strategies the first step that drives the rest of OI.

New focus

In most settings, traditional, inside-out process approaches focus 90% of process attention on how work is performed, which is natural because traditional process started in manufacturing, where how work happens is the dominant variable affecting both quality and efficiency. However, while manufacturing certainly does play a role in delivering customer value, discovering new ways to please customers–and implementing the appropriate activities–starts with front and back office functions or in service areas. And OI excels at designing office/serviced (O/S) process.

Once customer strategies are determined, Outside-In designs:

  • What work will implement the strategies
  • Who would best perform this work (functionally)
  • How work should be accomplished
  • Technology support required to enable and facilitate the work

All but how fall outside the traditional purview of business process.

Transformational change

Traditional process design delivers incremental change. But putting the customer in the driver’s seat may require transformational change. When called for, OI will redefine work, redraw functional boundaries, reroute workflow and information flow and recalibrate the technology environment. However much change you decide to make, OI is up to the task.