Tag Archives: Outside-In Process

How Much Does Corporate Design Fight Customer-Centricity?

Historically, virtually all corporate entities have been designed from production/service delivery out (inside-out). And a few unlucky companies have been designed from accounting out (upside-down).  In either case, when companies try to redesign strategy and process from the customer in (outside-in), they run smack up against their organizational structures.

Inside-out and upside-down companies are aligned and managed around functions. Customer-centric (outside-in) companies are aligned and managed around customers. Unfortunately for customer-centricity, companies can’t get from A to B by throwing a switch. The journey is rough and risky, which is a core reason why most customer-centric companies either started that way or transitioned before they were fully formed.

Based on my experience, the alignment change issue stops more companies in their path to customer-centricity than even lack of executive leadership. Do you agree?

If you’d like to do a deeper dive on this topic here’s a new white paper (parts of which will be folded into the book).

http://www.h-ym.com/articles/Alignment.pdf

Are We Witnessing the “Half-Life” of Customer-Centricity?

The optimist in me says, “Probably not.” The realist in me suspects we are, for several reasons.

-Customers were initially grateful that many companies appeared to be searching for comity. However, buyers now appear to be moving through this phase, which I call “play nice.” Now they’re seeing through the many insincere seller efforts to look and sound more customer-centric and becoming more cynical and mistrustful of sellers than ever. Hence, an increasing percentage is no longer “playing nice.”
-Influenced not only by transacting business over the web but by not seeing the “what’s in it for them” from forming relationships with sellers, many buyers are trying to minimize contact with sellers, preferring efficiency over spending time interacting with sellers.
-The more latitude sellers give buyers to “have it their way,” the more idiosyncratic customer behavior becomes – to the point where finding common approaches to satisfying varied customer preferences is becoming very difficult. “Process-on-demand” (term coined by my colleague Bob Starinsky) is beginning to replace customer best practices.

I’ve gone into much more detail in a new white paper, titled, “After Customer-Centricity Comes…?” http://tinyurl.com/9huk63k

 

Please know in advance that I’ve “trampled over” a number of customer-centricity’s sacred cows, and even more of marketing’s. But please don’t shoot the messenger :-).

Layoffs – Where’s the Learning Curve?

One touchy subject inevitably arises when we design customer-centric process. And I hate to see it happen.

Redesigning process from the customer inwards produces an ancillary “benefit,” which to many execs becomes their short-term ROI justification. While new process designs are adding new value to customers, they’re also streamlining the organization, which can dramatically reduce front and back office FTE requirements, raising the specter of layoffs.

While we always consul clients to first consider using temporary functionless staff for special projects, then reabsorbing them to create “no hire growth,” some layoffs inevitably occur. One of our clients, post process redesign, eliminated 600 front office positions, and our process reworking contributed to the eventual closing of multiple plants. Worse yet, overall demand in their industry was declining, leading to very slow growth.

Two things really bug me about this situation. First, too many companies practice “boom or bust” staffing. They lurch from overstaff to understaffing, because they don’t have a clue how to avoid either excess. Second, necessary layoffs often cut people but not their functions or positions. Process streamlining should reduce functions and positions and does not target specific workers. And in neither case are they learning anything from experience. They just keep repeating their destructive practices.

Not a pleasant topic at all, but I just read an excellent post an excellent post by Ron Ashkenas (co-author of “The GE Workout”) that spot on addresses both things that bug me. If the subject’s relevant, I strongly suggest reading it (link below).

http://tinyurl.com/c329on8

Confusing ISO with Process

Can companies with inefficient, even “broken” process successfully go through ISO-certification? Over the years, I’ve encountered a number that have, which answers the question for me. ISO certifies that quality standards are in place, but it’s a poor indicator of how high the standards are and whether they’re the best the company can do. ISO certification also fails to gauge whether process has been designed to optimize customer experience, despite including numerous customer-related standards.

Nevertheless, organizations frequently confuse the two. Any thoughts on why?

Are Service & Production Quality Two Sides of the Same Coin? (be careful how you answer)


I suspect most readers will instinctively answer, “No.” Production quality refers to meeting a normative standard with as little deviation as possible. Service quality means meeting customer needs and expectations, which are all over the lot. So they’re not only not two sides of the same coin. But they’re different currencies. They just don’t equate.

But here’s a catch, at least for process professionals. You can’t answer “No” yet still maintain we should use the same process design approaches to achieve both a fixed standard and a highly variable “non-standard” – at least not rationally. But too often traditionally trained production process people, anxious to move into the customer process world, fall into “Maslow’s trap.”

“If the only tool you have is a hammer, than all the world tends to look like a nail”

Comments?

Follow http://tinyurl.com/3swacdn for further illustration.

Customer-centricity is irrevocably changing IT. What other disciplines are being reshaped?


Used to be enterprise technology was designed for finance and/or manufacturing first – and all other functions, especially those directly affecting customer experience, as an afterthought. Still today finance and manufacturing technology needs are typically taken more seriously than other functions requirements. But that’s changing.

Increasingly, the business community is viewing technology’s first obligation as enabling and improving process.  When process design starts out at the customer end, rather than deep in the bowels of the company, technology must start there too. Otherwise, process and technology inevitably wind up misaligned. Plus, as it turns out, supporting finance in particular with technology is much less demanding than supporting customer-affecting work. So why would any systems architect let the less demanding functions dominate systems design and decisions? For example, we’re working now with a client that hired us to redesign process and then help select a new ERP system to support process. But they now realize that managing service operations is their major challenge, while they have tons of accounting and finance options. So we’ll design around the application layer.

This customer-driven turn of events turns systems architecture and IT overall on their respective ears. But we would do well to step back and look at other functions to anticipate customer primacy turning them outside-in as well. Your observations?

Reverse Engineering the Organization, Starting from Customer Process

What customers want from companies is becoming a common “conditioner” of organizational design and change management – but rarely a driver. That’s unfortunate, because empirical evidence shows the best way to build customer-centricity AND streamline companies is by starting with customer experience and redesigning the work (process) of the company from the customer in. Plus, putting customer interests first also greatly mitigates resistance to change by giving employees a much more palatable goal to work towards than “making more money for the company” (although that’s what ultimately happens.

But going “outside in” also involves serious change: changing work; who does it; how it’s done; and the underlying technology – all of which in turn require organizational change. Is that why companies continue designing change from the executive level down? Or is it more that management doesn’t like taking direction from customers.

Frankly, I suspect it’s the latter, although we always have to respect management resistance to change. “Taking orders from customers” flies in the face of the long-held belief that companies can manipulate customers into doing their bidding, buying into their brand, etc. And when you step back and considers how out of sync with today’s reality this belief is – you get a sense of how desperately senior management continues clinging to it.

Does redesigning process to cut waste produce similar outcomes to redesigning process to improve customer experience?

Before you protest, I do understand that waste-cutting process approaches can be applied for the benefit of customers. But here’s the difference I’d like to highlight.

Waste-eliminating approaches change internal operations – albeit increasingly to benefit customers. In contrast, customer-experience focused approaches changes what happens at points of customer contact and works its way back inside the company, almost in concentric rings. While customer-sensitive, waste-focused process approaches work from inside the company outwards towards customers, trying to add more customer value at every step – customer experience process methods move in the opposite direction.

I’ve designed process both ways, depending on context. But I do find the outcomes radically different – with customer-experience-based process design triggering far more organizational change and involving much more application-layer technology support (which is not appropriate for every context).

How does my experience square with your hands-on process work? And I hope this doesn’t sound exclusionary, but this is such a ground-level experience that I’m especially interested in comments from experienced process practitioners who have “been there,  seen that” for themselves.

Which contributes more to improving customer experience: Process that changes company behavior? Or promotion that changes customer behavior?

Most in the business community agree that adding and retaining customers is becoming harder by the year. And economic conditions will continue growing the gap between potential supply and trailing customer demand – even after the recession eases. That’s forcing more and more companies to change from company-first (inside-out) models to customer-first (outside-in).

The question is…how? Do they invest first in becoming super-communicators with customers with strong brands – or do they start by changing: what work is done; by who (organizational redesign); how; and with which enabling technologies – otherwise known as Outside-In process?

A marketer’s first reaction will likely be through customer communication. A process person will almost all come down on the side of customer-driven process. But what about those in customer experience?

I believe an increasing number of CEM folks are starting to agree with the process perspective. Not even well-trained and highly motivated customer contact staff can overcome bad process (and policies). And the most influential aspect of customer experience is employee contact.

Several years ago, my research partner David Mangen Ph.D and I (no Ph.D) conducted a study of both B2B and B2C buying triggers across a range of industries. Like many an objective research project not seeking to validate beliefs does, this one surprised us with several unexpected findings. Principal among these was customers ranking “dealing with knowledgeable and empowered employees” their second most influential buying trigger for both B2B and B2C. That’s a process outcome, not a product of branding or any other form of customer communication.

Your thoughts?

Customer-Centric Process Design is Clashing with Organizational Design: Which is more likely to “give?”

Most organizations are designed from the top down: determining the management structure first, typically using traditional silo roles; divvying up among silos responsibility for classes of activities next; then letting silos determine specific activities (processes). Things have worked this way seemingly forever.

Today, however, competitive pressures are driving more and more companies towards more customer-centered business models. And the most successful approach to implementing the change from “inside-out” (company-centric) to “outside-in” (customer-centric) has been redesigning processes around customer needs and preferences. Sounds innocuous from an O.D. standpoint, except outside-in process redesign relies on determining who best should do what activities from the customer perspective, which usually clashes with current-state organizational structures and responsibilities. Plus, implementing outside-in process requires heavy and unaccustomed collaboration among functions – and potentially placing an enterprise-wide customer advocate above the silo tops. Two more conflict points.

These clashes are only starting to occur, but will grow in number and intensity as pressures to conduct business “the customer’s way” mount. Do you think your organization, for example, or your clients’, are willing to reorganize to better support customer-driven process? Or are we about to see “irresistible force meets immovable object?”