Are you a Process Performance Outside-In Outlier?

The Road to Hell is Paved with good intentions

This series of commentary is addressing the challenges faced by Certified Process Professionals® as they progress their organisations Outside-In. We start with what is now a classic denial strategy and will progress over the coming weeks to review TEN (sometimes deliberate) misconceptions that seek to stop you on your journey to Successful Customer Outcomes. 'The company has to get its own processes right first'. In the context of Outside-In this is clearly a major mistake. As the Southwest Airlines and Apple examples demonstrate you fix the internal processes by understanding and acting on "the Customer Experience is the process". In doing so eveything changes internally to better align to successful customer outcomes. That reduces complexity, removes costs, improves service and grows revenue. Now if you brief is 'in the box' and does not yet extend to the Customer Experience the approach should be around optimisation through understanding the causes of work – moments of truth, breakpoints and business rules. Even though this is at best sub optimisation (recall the US banks Customer query process) it will take you to a much better place with significant performance improvements as you highlight and eradicate the 'dumb stuff'. Often times this has to be the starting point as, by definition, the way inside-out works is by the sub division of labour. You can only see the immediate walls around you and looking beyond maybe beyond your brief. Do not lose heart. Go with Optimisation (and if necessary stealth) as you introduce through existing projects the concepts of moments of truth, breakpoints and business rules. You will catch the eye of those responsible for the numbers as the changes you introduce go way beyond the traditional expectations. Ciao, Steve Next week… Changing the picture 'My job doesn't really involve the end customer. But I do have a mass of internal customers!'

CPP Master® Series FREE webinars and resources

BP Group updates and *NEW* WEBINAR series with CPP Master® Martina Beck-Friis

** FREE WEBINAR SERIES STARTS THIS WEEK**
The CEMMethod® WEBINAR with Martina Beck-Friis
- http://bit.ly/CEMMOverview


** Top DISCUSSION **
When you're in a support department like IT, Finance, or HR who is your end customer, the rest of the organisation or customers outside...(Hussein Patel)
- http://linkd.in/at8hcB

Welcome to the BP Group led by Charles Bennett - http://bit.ly/9FDzJk
Dedicated groups for the Certified Process Practitioner | Professional | Master |
- http://linkd.in/CPP_subgroups

** David Mottershead Provides us with a new perspective with a prezi ?!**
http://prezi.com/xtekxms1ul3v/successful-customer-outcomes/

** Articles **
Outside-In is a business imperative (Steve Towers)
- http://bit.ly/cbszHM

All the Best until next time,
Steve Towers, BP Group Founder

BIG thanks to the BP Group Advisors, Managers & Sundowner Directors including:
John Corr | Sunil Dutt Jha | Charles Bennett | David Mottershead | Erika Westbay | Janne Ohtonen | Nick Harvard | Stephane Haelterman | Paul Bailey | Martina Beck-Friss | Mark Barnett | Steve Melville | Stephen Nicholson | Marjolein Towler | Jennifer van Wyk | MichelineLogan |

See them at http:://www.oibpm.com |

BP Group 18th Annual CONFERENCE | Book your diary in Orlando Jan 17-21, 2010
- http://bit.ly/BPGroupUR18

Advancing Outside-In - The worlds FIRST Outside-In Conference

BP Group BPM Conference

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Advancing Outside-In update, resources and links

MAJOR MILESTONE ACHIEVED 5,400 members on BP Group Linked-In
BPGroup (est 1992. 43,000+ members | LinkedIn est. Oct 2008.)
Reflecting the growth and interest in all things process

The BP Group are Sponsors of the Business Process Professional® pathway -

http://www.businessprocessprofessional.com

News | Events | Coaching & Certification | Discussions | Conferences | BPGroup Personnel |

** News & Events**
The CEMMethod® WEBINAR with Martina Beck-Friis (CPP Master®) and Steve Towers
- http://bit.ly/CEMMOverview
Enterprise Architecture CONNECTIONS subgroup exceed 340 in three months
- http://linkd.in/EAandProcess

BP Group 18th Annual CONFERENCE Heads-up | Book your diary in Orlando Jan 17-21, 2010
- http://bit.ly/BPGroupUR18

** Top DISSCUSSIONS **
When you're in a support department like IT, Finance, or HR who is your end customer, the rest of the organisation or customers outside...
- http://linkd.in/at8hcB (Hussein)

How far down should process drill?
- http://linkd.in/ProcessDrilldown (Dick Lee)

Are corporate silo's like castles? http://linkd.in/ProcessSilos (Karl Walter Keirstead)

Outside-in at Trader Joes http://linkd.in/ProcessTraderJoes (thanks to Patrick Ryder)
** New Sub Groups **

Welcome to the BP Group led by Charles Bennett - http://bit.ly/9FDzJk
Certified Process Practitioner | Professional | Master | - http://linkd.in/CPP_subgroups

** David Mottershead Hosts ANZ CPP Programme in November | (spaces strictly limited)
Auckland - http://aucklandcpp.eventbrite.com
Wellington - http://wellingtoncpp.eventbrite.com/

** New Articles **
Outside-In is a business imperative (Steve Towers)
- http://bit.ly/cbszHM

** 2011 Certification & Training programme**
- http://www.bp2010.com

Cheers, Steve Towers, BP Group Founder

BIG thanks to the BP Group Advisors, Managers & Sundowner Directors including:
Dick Lee | John Corr  | Sunil Dutt Jha | Charles Bennett | David Mottershead | Erika Westbay | Janne Ohtonen | Nick Harvard | Stephane Haelterman | Paul Bailey | Martina Beck-Friss | Mark Barnett | Steve Melville | Stephen Nicholson | Marjolein Towler |  Jennifer van Wyk (South Africa)  |
See them at http:://www.oibpm.com |

Dedicated BPGroup discussions - apply via the links!

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Certified Process Practitioner® - for those qualified to CPP Level 1
http://www.linkedin.com/groups?mostPopular=&gid=2929539

Certified Process Professional® - for those qualified to CPP Level 3
http://www.linkedin.com/groups?mostPopular=&gid=2515784

Certified Process Master® - for those qualified to CPP Level 5
http://www.linkedin.com/groups?mostPopular=&gid=2741121

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EA Connections - interested in Enterprise Architecture & BPM?
http://www.linkedin.com/groups?mostPopular=&gid=3180325

Outside-In Process - Advanced & Enterprise BPM takes centre stage
http://www.linkedin.com/groups?mostPopular=&gid=2057992

Advanced BPM - it says what it does on the tin
http://www.linkedin.com/groups?mostPopular=&gid=2056169

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BPGroup Sweden - led by Martina Beck-Friis
http://www.linkedin.com/groups?mostPopular=&gid=2678614

BPGroup Germany - Led by Paul Bailey
http://www.linkedin.com/groups?mostPopular=&gid=2669692

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Certified Process Professional® November-January - Six cities to Mastery

The global programme grows capabilities from Certified Process Practitioner® through to Certified Process Master® - review the series at http://www.bp2010.com

The quest for the Triple Crown – Four ways to transform process for success forever

The quest for the Triple Crown – Four ways to transform process for success forever

There’s been much discussion about the Successful Customer Outcome across several LinkedIn threads recently
(see http://linkd.in/DanielaProcess, http://linkd.in/ProcessDick, http://linkd.in/ProcessGeoff, and http://linkd.in/ProcessNic)
however that isn’t the only way to move processes Outside-In. In fact there are FOUR tried, tested and proven approaches to simultaneously reduce costs, improve revenues and enhance customer service (winning the Triple Crown).
You can explore this territory by visiting the following mini articles. Next week we’ll feature several recent webcasts.

Articles:
Part 1: Understand and apply process diagnostics
| http://bit.ly/ProcessDiagnostics |

Part 2: Successful Customer Outcomes
| http://bit.ly/SuccessfulCustomer |

Part 3: Reframing process for an Outside-In world
| http://bit.ly/ReframingProcess |

Part 4: Rethinking the business you are in
| http://bit.ly/WhatBusinessRUin |

 

If you are already qualified as a Certified Process Professional you should already have completed the Outside-In Strategic Matrix® (OI-SM) which complements the articles. Try it out for yourself and see how Outside-In you actually are.

Next week THREE webcasts to as we travel deeper into Outside-In.

Best Buy is a poster boy of Outside-In, Are they done yet?

Although Best Buy gets its fair share of customer complaints online, it responds to them in a different way due to its Outside-In philosophy. Take Twelpforce. This system lets Best Buy employees see and respond to Best Buy-related issues that Twitter uses express, and over 2,500 people are taking part. The Twelpforce system brings together several groups: customer service representatives, in-store salespeople (called blueshirts), and the Geek Squad, technicians that visit homes to render technical assistance.

To see Twelpforce in action, consider this: Earlier in the year, Josh Korin purchased an iPhone and insurance plan from a Chicago Best Buy. His iPhone stopped working one day, and the store's staff gave him a loaner BlackBerry to replace it. He didn't want this -- especially since he bought insurance -- so he tweeted his disapproval. He did this on the weekend, but even so, customer service representative Coral Biegler tweeted back at him. The very next day, she had managed to find a replacement iPhone for him. From then on, Korin tweeted about how impressed he was with the service he received from Best Buy. His wife did too -- and she has over 3,000 people following her on Twitter. Twelpforce grew out of Best Buy's commitment to technological innovation from employees.

The idea was the brainchild of Gary Koelling, a member of Best Buy's marketing group and a social-media guru. Ben Hendrington, a technology staffer in the e-commerce division, spent a week thinking about how he could harness the Google cloud computing platform to create a Twitter app to serve many employees at once. Marketing manager John Bernier was in charge of the project and successfully managed legal challenges like labor laws. The leaders at Best Buy support innovation, no matter where it originates inside the organization. CMO Barry Judge places a strong emphasis on innovations such as Twelpforce. We are nearly constantly in a half-baked mode, as for ideas, Judge states. Half-baked ideas let individuals [on the inside as well as the outside] offer you feedback. There is always an education going on in Judges department of marketing. If you're not inquisitive, you will not last for very long in marketing, he stated. You must have some that aren't successful to notice that.

The results of this mindset are easy to see in Best Buys marketing. One way Judge does this is posting television commercials on his blog prior to airing them. In one instance, commenters beyond the company expressed displeasure claiming a lack of sensitivity in a commercial that tells how a Blue Shirt assisted a customer in the armed forces. There was no airing of the commercial. Another innovation from Best Buy is opening the programming interfaces on its site, www.bestbuy.com, which lets other sites know about things like changes in price. The staffers in marketing made up all of these activities.
They were all risky. And they all proceeded.

Sources of Information for Advanced BPM aka Outside-In

If you wish to read and listen more on these themes the following references are useful.
Join the community discussing these issues, challenges and opportunities.

Community and social networking	Networking	http://bit.ly/I0tvw
Customer Capitalization – Roger Martin, Dean of Faculty, Rottman Business School	Article	HBReview, Feb 2010
Don’t give customers what they think they want Steve Towers	Article	http://bit.ly/3xUIn4
Evolution of Approaches BP Group	Research	http://bit.ly/Fw5Kv
Outside-In Interview with Blog Radio	Podcast	Outside-In (15 mins)
The Best Performing companies Millward Optimoor	Research	http://bit.ly/uAyVW

Outside-In overview Interview - Key issues, challenges, opportunities and case studies

Outside-In monthly newsletter - September reaps a big harvest

The monthly newsletter "Outside-In" contains 4 Videos, 3 Webinars, 2 Sundowners, 1 Whitepaper plus new articles, links, resources and nice pictures of people from around the world becoming Certified Process Masters :-)
http://www.towersassociates.com/Process_Performance_September_2010.html

And do not forget the groundswell towards the 18th Annual Conference also: http://www.bpm-summit.com

All the Very Best,
hopefully catch-up with you soon

Steve

The convergence of BPM and EA - Keynote from Architect World 2010

Ew10 Keynote

View more presentations from stowers.

The convergence of BPM, Enterprise Architecture and Customer alignment

If you are new to this debate you might want to join EA Connections, chaired by Steve Melville who penned the following words....

Your value proposition sets expectations with potential customers. The more compelling your value proposition, the larger the pool of potentially interested customers and the fewer competitors that can match it. So, the goal is to create product and service offerings that set expectations that more customers find compelling and few competitors can match. In so doing, you have re-set the bar for customer expectations within your market and created the foundation for your organization's success.

But here's the catch... you have to deliver against those expectations. One failure and you begin to lose your customer's trust. You lower their expectations with your actions, regardless of your lofty initial promises of value. And, with the explosion of social networking, blogs, 24 hour news channels, online reviews, etc., any failure to deliver against expectations, gets broadcast pretty quickly. Ask BP or Toyota what happens when you fail to meet customer expectations of safety.

So... to match the high expectations of your value proposition, the delivery processes of your organization need to consistently meet those expectations. And it is in the design and deployment of those delivery processes that the critical dependency on EA surfaces. For, in the 21st Century, such processes are heavily dependent on technology:

eCommerce and online support sites, mobile applications, ERP systems, RDBMS, SOA, SANs, etc. And not just some delivery processes, Outside-In companies recognize that the entire enterprise needs to be focused on delivering successful customer outcomes.

So the challenge becomes to align all of the process, application, information and technology resources across the entire enterprise to deliver successful customer outcomes in order to support higher and higher customer expectations. And alignment is the sweet spot of enterprise architecture. EA is the right fit because both its sweep (across the entireenterprise) and its scope (processes, information, application, and the technology that supports them) match the demands of the Operational Framework Layer of the Outside-In enterprise.

Come on down to the Linkedin discussions:
Join the BP Group http://bit.ly/joinbpgroup | EA Connections http://bit.ly/EAConnections | Outside-In Resources http://oibpm.com

Part 4 of 4: There are four distinctly Outside-In ways that you can rethink process and in doing so achieve Triple Crown benefits.

The previous three articles in this four part theme we reviewed 'Understand and applying Process diagnostics', the 'Successful Customer Outcome' and 'Reframing Process for an Outside-In world'. Now finally we move our attention to the fourth way we can rethink process forever.

Rethinking the Business you are in.

In the Southwest airlines example reviewed earlier we referred to the different viewpoints of the ‘business’ you are in. The two views – one the organisations, regarded as inside-out reflect the activities and functions undertaken. So British Airways see themselves in the business of flying airplanes and approach the customer with that product/service in mind. They set about marketing and selling the flights and hope to pull the customers to the product through pricing, availability and placement. In a slowly changing world where customers have little choice this strategy can provide a route to success.

As we have already seen the tables have turned and the enlightened customer demands so much more.
Southwest and other Outside-In companies understand this challenge and take a customer viewpoint.
What business would you say these six companies are in: Hallmark Cards, Disney, Zara, AOL, OTIS elevators, China Mobile?  Try it from the customers perspective and you’ll arrive at a very different answer – try these, expression, joy, style and comfort, community, moving people, connectivity. Yes they are very different and will reframe the way you think of the service and products you provide. Go further and look inside your existing company.

Are you still separated into functional specialist areas providing specific outputs to other departments in the so called ‘value chain’? Do you have internal ‘service level agreements’ that specify what you’ll deliver and when? How much of our internal interaction adds ultimate value for the customer? This way of organising work imposes limitations on our ability to truly deliver successful customer outcomes. The Inside-out viewpoint is inefficient, prone to red tape, is extremely risk adverse (checkers checking checkers) and slow in delivering product and service.

Many inside-out organisations actually regard customers as an inconvenience rather than the reason why they exist.

What business are you in? Past, present, future?

Join us on LinkedIn www.linkedin.com/groups?mostPopular=&gid=1062077
Visit additional resources www.oibpm.com
Become a Certified Process Professional www.certifiedprocessprofessional.com 

Leaning to Outside-In..

“Not everything old is bad and antiquated and not everything new is shiny and good. The real secret to success is to combine the best of both.” Rene Carayol,  Senior Executive & Former Board Member for Pepsi, Marks & Spencer, IPC Media & The Inland Revenue

The world's leading companies have come to realize that only when their customers are successful, will they be successful. In pursuit of their market leadership not only they need to spend time to look inside their business to know how things are getting done but also look outward to get deep understanding of their customers.

Process has indeed come a long way from it humble routes amidst the early industrial revolution and Adam Smiths ‘Wealth of Nations’.

Although many in Western economies are in a state of denial, we are undergoing the greatest reorganization in the business world since the Industrial Revolution. No matter what industry you are in, no matter how successful you are, it's time to get ready for the world as it will be --a world where your customers have new choices from a sea of suppliers from across the globe. Peter Fingar Executive Partner, Greystone Group Author of Extreme Competition: Innovation and the Great 21st Century Business Reformation

One of the first people to describe process was Smith who in 1776 describes a new way for process in an English pin factory. He outlines the production methods and created one of the first objective and measureable enterprise process designs. The consequence of 'labour division' in Smith’s example resulted in the same number of workers making 240 times as many pins as they had been before the introduction of his innovation.

Adam Smith participated in a revolution that transformed the planet. He lived at a time when the confluence of factors, political change, emergence of the New World, industrialization and a new optimism that the world could move from the shackles of the past.

In heralding a movement that developed into Scientific Management the foundation was laid that established a way of working that has survived and thrived for 200 years.


And yet now, more than ever, is a time to perhaps take a careful glance back to the past to guide the way for not only surviving the current economic turmoil but to also prepare us to thrive in the seismic shifts of the 21st century ‘new world’ order where the customer has become central to everything we do.


Leading global corporations are now evolving their tried and tested approaches into methods suited to the changed challenges of customer promiscuity, globalisation, IT innovation and the Prosumer.  That is the essence of what we call Outside-In.

"The Customer Experience is the Process"
Outside-In can really be summarised in the statement that “the customer experience is the process”.  We can no longer just look within our organisation boundary to create a sustainable competitive advantage. We have to extend our scope and embrace a broader view of optimising process by understanding, managing and developing customer expectations and the associated experience. We need to articulate Successful Customer Outcomes and let those guide our product and service development as we move beyond the limiting scope of silo pyramidal based left to right thinking.

In 2006 BP Group Research identified the ‘Evolution of Approaches’ and how steps can be taken to grow Lean Six Sigma’s influence and success into a strategic Outside-In toolkit. In fact the last 4 years are seeing the fruition of these advances with recent Best in Class 2009 Award winners PolyOne, a dyed in the wool Lean outfit, advancing their stock price six fold in 18 months on the back of radical and innovative changes across its customer experience.

The Death knell for BPR, TQM, Lean and Six Sigma?
Some see Outside-In as the death knell for approaches developed during the late 20th century. Not so as that narrow and simplistic view does not acknowledge the stepping stones available to embrace the new customer centric order. In fact the foundations of our futures are always laid on the learnings of the past with those innovators who recognise the need to evolve leading that charge.

Victory will go to the brave who seize the moment and push forward their approaches into the brave new world of Outside-In. The sector leaders have set a precedent - can you embrace the challenge?

* * *

If you wish to read and listen more on this theme the following references are useful.
Join the community discussing these issues, challenges and opportunities.

Community and social networking	Networking	http://bit.ly/I0tvw
Customer Capitalization – Roger Martin, Dean of Faculty, Rottman Business School	Article	HBReview, Feb 2010
Don’t give customers what they think they want Steve Towers	Article	http://bit.ly/3xUIn4
Evolution of Approaches BP Group	Research	http://bit.ly/Fw5Kv
Outside-In Interview with Blog Radio’s Gienn Weiss	Podcast	Outside-In (15 mins)
The Best Performing companies Millward Optimoor	Research	http://bit.ly/uAyVW

Steve Towers
Steve is the founder of the Business Process Group (www.bpgroup.org) a global business club (originally formed 1992) exchanging ideas and best practice in Business Performance Management, Transformation and Process Improvement.

He leads from the front and works with many of the leading fortune 500 companies as a mentor and coach specializing in the implementation of performance improvement, process change and transformation.
Steve is ‘Expert Advisor’ for IQPC and participates as a judge, workshop and track leader for the Lean Six Sigma and Process Excellence summits in the US and Europe.
He recently co- judged the Best Improvement Project category and selected US company PolyOne as the foremost Lean company on their journey to Outside-In.

An inspirational speaker and author of several books including “A Senior Executives guide to BPR”, “In Search of BPM Excellence”, “Thrive! How to Succeed in the Age of the Customer” and recently “Customer Expectation Management – Success without Exception”.  The new book, “Outside-In. The Secret of the 21st century leading companies”  chronicles the rise and approaches shared amongst the best companies in the world. Steve is noted for his direct and pragmatic approach.

Steve previously worked for Citibank where he led restructuring and business process transformation programs both in the US and Europe. Steve advises many boards and sits on the steering panel of the influential California based BPM Forum, a group of distinguished C-Level executives heading up Global 500 companies

Steve has bases in Europe (UK) and Colorado.

 

Copyright MMX, Towers Associates

Part 3 of 4: There are four distinctly Outside-In ways that you can rethink process and in doing so achieve Triple Crown benefits.

In the first two articles in this four part theme we reviewed 'Understand and applying Process diagnostics' and the 'Successful Customer Outcome' map. We now move our attention to the third  way we can rethink process forever

Reframing process for an Outside-In world

A fundamental principle of Outside-In is the understanding of where your process starts and ends.

In the 20th century many techniques and approaches developed to better understand and create processes. In its earliest form pioneering work undertaken by the United States Airforce created modelling approaches based on the Structured Analysis and Design Technique (SADT) that produced iDEF (Integrate DEFinition Methods). iDEF became recognised as a global standard as a method designed to model the decisions, actions, and activities of an organization or system[1].  iDEF as a method has now reached iDEF14 [i] and embraces a wide range of process based modelling ideas. Concurrent with the development of iDEF technology providers created proprietary modelling approaches, and subsequently developed into modelling language standards, used by many organisations to represent their systems and ways of working. The convergence of business process modelling and business process management (BPM) has now produced a rich set of tools and techniques

able to model and ideally manage an organisation. In fact one of the more accepted definitions of BPM (based on the British Journal of Management[ii]): "Business process management (BPM) is a management approach focused on aligning all aspects of an organisation with the wants and needs of clients. It is a holistic management approach"

Until a few years ago process management approaches looked within the boundaries of the organisation and the combination of modelling and management approaches were adequate to understand the enterprise. The impact of process management in improving organisation performance has been profound however we now face a different reality driven by the customer.

As a consequence both disciplines now present a series of problems that include

(a)    understanding the beginning and end of the process,

(b)   the techniques used to model process are inadequate and focused  on the wrong things

Strangely customer involvement in a process often appears as an afterthought and the actual representation systems (left to right, top to bottom) create an illusion that fosters the belief that “the customer isn’t my job”.

Let’s deal with each in turn by example:
a.     The beginning and end of process

To aid the discussion let’s look at two airlines, British Airways and Southwest, and we’ll review how they ‘think’ about their business through the eyes of process. If you sit down with British Airways executives and asked the question “where does your process start and end?” the response reflects the main source of revenue, seat sales.

So the answer “the process is from the ticket purchase to the collecting the bags off the carousel” is no great surprise. In fact that is the way we have mostly thought about process in that it starts when it crosses into organisation, and finishes when it leaves. We can easily model that, identify efficiency improvements, improve throughput and optimise apparent value add.

As far as British Airways is concerned what you do outside of that process is no concern of theirs, after all they are an airline and that’s what they do. Now let’s change our perspective and visit Love Field in Texas and meet the executive team of Southwest. Ask the guys the same question “where does your process start and end?” and the answer is a whole different viewpoint.

The process begins when the potential customer thinks of the need for a flight, and only ends when they are back at home following the journey. The scope of this process is defined by the phrase “the customer experience is the process”. That’s an Outside-In perspective and creates opportunities across the whole customer experience.

More than that it raises the prospect of additional revenue streams, spreads the risk associated with a dependency on seat sales, reinforces the customer relationship and develops an entirely different way of doing business.  So let’s ask another question of our friends at Southwest “guys, what business are you in?”, and the answer changes everything you ever thought about airlines forever “we’re in the business of moving people”.

Downstream Southwest may well turn the industry further on its head as they move from being the low cost airline to the ‘no cost airline’ and give their seats free of charge. What would that do to your business model if 95% of your revenues, as with British Airways, comes from seat sales?

The business challenge for Southwest becomes one of controlling the process to benefit and maximise the customer experience. That involves partnering, sharing information and doing all necessary to make customers lives easier, simpler and more successful.

Now how do you model that?


b.     The techniques used to model process are inadequate and focused on the wrong things

We have reviewed the ultimate cause of work for all organisations is the customer. Organisations exist to serve the customer though the provision of products and services and in this way develops revenue that goes to the profit and onward distribution to the stockholders.

In other organisations without the profit motivation, for instance the public sector, then the effective delivery of services is measured by citizens and stakeholders.  Accordingly it stands to reason that everything happening within the organisation should be organised and aligned to deliver customer success and anything that isn’t is potentially ‘dumb stuff’. The techniques we use to ‘capture’ process are however not suitable to understanding the causes of work and focus attention instead on the visible tasks and activities that are perceived to create value for customers. In the context of the enlightened customer[iii] this is at best misleading and at its worst actually part of the broader problem. In Outside-In companies the focus has shifted to understanding the causes of work, and then engineering those causes to minimize negative effects.

Once more to go Outside-In we need a perspective shift and we can achieve this by identifying those three causes of work and then set out to reveal them and their negative impact.

How big is the size of the prize? Efficiency and productivity gains of 30% to 60% are common. Cost reduction of services by 50% is not unusual.

Cause elimination is a seek and destroy mission. It’s the challenge to weed out the “dumb stuff” in our organizations.

By truly fixing the Causes of Work, rather than messing around with the Effects (a bit like moving the chairs on the deck of the Titanic) we will all find our customers and employees life simpler, easier and more successful. Are you ready to challenge your assumptions and start eliminating those causes of work? Fix the Cause, remove the effect.


[1] http://www.idef.com/IDEF0.htm


[i] http://en.wikipedia.org/wiki/IDEF

[ii] Understanding Business Process Management: implications for theory and practice, British Journal of Management (2008) (Smart, P.A, Maddern, H. & Maull, R. S.)

Join us on LinkedIn www.linkedin.com/groups?mostPopular=&gid=1062077

Visit additional resources www.oibpm.com
Become a Certified Process Professional www.certifiedprocessprofessional.com 

Part 2 of 4: There are four distinctly Outside-In ways that you can rethink process and in doing so achieve Triple Crown benefits.

In the first article in this four part theme we reviewed 'Understand and applying Process diagnostics'. We now move our attention to the second  way we can rethink process forever -
Identify and aligning to Successful Customer Outcomes

“Businesses can be very sloppy about deciding which customers to seek out and acquire” Frederick F. Reichheld

The six questions we ask ourselves in this iterative process are:
I.    Who is the customer?
At first glance should be an easy answer however it is not as obvious as it seems. The ultimate customer for any profit making enterprise is the person, or company who provides the revenue by purchasing the products or services we produce. It is a matter of fact that in our inside-out legacy world we have created multiple customer-supplier relationships which include internal ‘service’ providers such as Information Services, Human Resources and so on. In mature Outside-In organisations the internal customer ceases to exist as we progressively partner to align to Successful Customer Outcomes and artefacts such as Service Level Agreements become a thing of the past.


II.    What is the Customers current expectation?
The 2006 book “Customer Expectation Management “ Schurter/Towers reviewed in detail the of creating and managing customer expectations and how through clear articulation companies such as Virgin Mobile in the US redefine their market place. In the context of the SCO map we need to understand the customers (as identified in the answer to question 1) current expectation. This often reveals both a challenge and opportunity. Customers will tell it as it is, for instance in an insurance claim process “I expect it is going to take weeks, with lots of paperwork and many phone calls”. That should tell you the current service is most likely poor and fraught with problems, delays and expensive to manage however this presents the opportunity. If that is a market condition (all insurance claims are like this) then moving to a new service proposition will be a potential competitive differentiator.  


III.     What process does the customer think they are involved with?
In the inside-out world we see process in a functional context. Therefore insurance claims are dealt with by an insurance claims department. Customer Retention is the baby of you guessed it, the Customer retention department and marketing is done by the marketing people. This split of responsibility is a legacy of functional specialisation created by relating to business as a production line. Adam Smith wrote in ‘The Wealth of Nations’ (1776) of an English pin factory.  He described the production of a pin in the following way: ”One man draws out the wire, another straightens it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head: to make the head requires two or three distinct operations: to put it on is a particular business, to whiten the pins is another ... and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which in some manufactories are all performed by distinct hands, though in others the same man will sometime perform two or three of them”. The result of labor division in Smith’s example resulted in productivity increasing by 240 fold. i.e. that the same number of workers made 240 times as many pins as they had been producing before the introduction of labor division. The insights form Smith underpinned the industrial revolution however using this principle to organise ourselves in the 21st century is to a very large part the wrong approach. That is precisely what the answer to the question will tell us – “sorry sir you are talking to the wrong department, let me transfer you”. Or even getting stuck in automated response system hell “press 1 for this, 2 for that, 3 for the other and 4 if you have missed the first three options.” These are features of the labor division mindset. Ask a customer what process they think they are and you will frequently be surprised by the answer.


IV.    What do we do that Impacts customer success?
Often we ask customers to do numerous many activities which appear sensible  to receive service or indeed buy products. Relating back to the insurance claim we can see rules and procedure around how to make claims, the correct way to complete forms, the process of collating the information, the timeframes within which to claim, the way we can reimburse you and more.  Often times these restrictions that we impose made sense at some time in the past however they may no longer be relevant.

The situation is compounded by the way internal functional specialism focus on project objectives. Richard Prebble, a respected New Zealand politician writes in his 1996 book “I’ve been thinking” of the inability of organisations to think clearly of the amount of work they create and in fact “they spend a million to save a thousand every time”.
His story of the challenge within large organisations is typical "The Post Office told me they were having terrible problems tracking telephone lines ... They found an excellent program in Sweden which the Swedes were prepared to sell them for $2m .... So the managers decided to budget $1m for translating into English and another $1m for contingencies. But, as the general manager explained, it had turned out to be more expensive than the contingency budget allowed and they needed another $7m. "How much", I asked, "have you spent on it so far?" "Thirty-seven million dollars" was the reply. "Why don't we cancel the programme?" I asked "How can we cancel a programme that has cost $37m?" they asked   "Do you believe the programme will ever work?" I asked "No, not properly" "Then write me a letter recommending its cancellation and I will sign it" The relief was visible. I signed the letter, but I knew I needed new managers."

This type of inside-out thinking causes companies to create apparently sensible checks and controls within processes that actually manifest as customer inconvenience, cost and delay. Are you making the customers lives easier, simpler and more successful?


V.    The Successful Customer Outcome – what does the customer really need from us?
At this point we should have enough information to objectively create several statements that articulate the SCO. These statements should be specific, measureable, attainable, relevant and time-bound (SMART). Usually there will 6-10 such statements which become the actual key performance measures as move the process Outside-In. For example a North American business school completed the SCO map and created these statements from the customer perspective for an ‘Education loan application’ process:
a.    I need to receive my financial assistance
b.    I need to receive aid  before the semester starts
c.    I need to attend the classes I have chosen
d.    I do not want to call to chase progress
e.    I need to receive the correct amount
f.    I do not want to have to fix your mistakes

There is no ambiguity here and we avoid a common mistake of using management weasel words such as ‘efficient, effective, timely’ which may mean things internally but to a customer are of little help. Creating SCO statements that may be used as measures for process success is a key aid on the journey to Outside-In.


VI.    And now we reach the core of the onion. What is the one line statement that best articulates our Successful Customer Outcome? This one-liner embodies the very nature of the process and sometimes the business we are in. In ‘Thrive- how to succeed in the Age of the Customer’ McGregor/Towers (2005), Easyjet (Europe’s second largest airline) is used as an example in this quest. Their simple “Bums on Seats” SCO sentence works both from a company perspective (we must maximise utilisation, offer inexpensive seats, get people comfortably and safely to their destinations) and the customers needs  “I need a cheap safe seat to get me to the sunshine quickly without a fuss”.  

The company one liner will become part of a series which are measureable through the SCO statements and can be tested and revised depending on evolving customer expectations and needs. It may in fact ultimately replace the inside-out strategic process and provide the organisation with its Raison d'être.

Of course when we start the journey it is often sufficient to create SCO maps to help grow understanding and even if the actual SCO Map is subsequently replaced (as we take a broader view) the improvement in understanding around the customer is invaluable.


In the third part of this four part series we will review "Reframe where the process starts and ends"

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Evolving Support for Outside-In

Ranjay Gulati presents a great case for moving Outside-In. His website http://ranjaygulati.com/rg/ provides access to several very useful and tested resources for those tasked with helping their organizations break out of their inside-out straightjackets.  Here's a preview video:

Highly recommended.

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Visit additional resources www.oibpm.com
Become a Certified Process Professional www.certifiedprocessprofessional.com 

Part 1 of 4: There are four distinctly Outside-In ways that you can rethink process and in doing so achieve Triple Crown benefits.

I explore these more thoroughly in the new book however for now let's take them in bite sized chunks.
•    Understand and applying Process diagnostics
•    Identify and aligning to Successful Customer Outcomes
•    Reframe where the process starts and ends
•    Rethink the business you are in

Let's start with...
1. Understand and applying Process diagnostics:
(These will be familiar to CPP people however a refresher is always nice)
Earlier we have mentioned Moments of Truth, those all important interactions with customers. Let’s take that discussion further and include other closely related techniques for uncovering the real nature of process – breakpoints and business rules.

Firstly Moments of Truth (MOT) were first identified by Swedish management guru Richard Normann (1946-2003) in his doctoral thesis “Management and Statesmanship” (1975).
In 1989 Jan Carlson, the CEO of Scandinavian Airlines (SAS) immortalized the phrase with his book ‘Moments of Truth’. He clearly linked all customer interaction as the Causes of Work for the airline and set about eradicating non value added MOT’s and then improving those he couldn’t remove. 
a)    Moments of Truth are a Process Diagnostic
b)    They occur ANYWHERE a customer “touches” a process
c)    They can be people-to-people, people-to-system, systems-to-people, system-to-system, and people-to-product
d)    ANY interaction with a customer is a Moment of Truth
e)    Moments of Truth are both process Points of Failure and Causes of Work

Carlson transformed the fortunes of SAS with this straightforward insight – all work in our organisations is ultimately caused by the Moment of Truth. Fix them and you fix everything else.
All Moments of Truth should be eradicated and those remaining improved. In doing so the customer experience is improved, costs are reduced and productivity maximised.

Next let’s review Breakpoints. Breakpoints (BP’s) are the direct consequence of MOT’s and are all the internal interactions that take place as we manage the processes caused by the customer interactions. 
a) Any place that a hand-off occurs in the process is a Break Point
b) Break Points can be person to person, person to system, system to person or system to system
c) Break Points are both process Points of Failure and Causes of Work

By identifying BP’s we can set about uncovering actions that would in turn remove them, or if not improve them. BP’s are especially evident were internal customer supplier relationships have been established say between Information Systems departments and Operations. Empirical research suggests that for every Moment of Truth there are an average of 3 to 4 Breakpoints. In other words a process with ten MOT’s will typically yield 30-40 Breakpoints.
All Breakpoints should be eradicated and if not at the very least improved. In doing so we get more done with less, red tape is reduced, control improves and the cost of work comes down.

The third in our triad of useful Outside-In techniques is Business Rules.
Business Rules are points within a process where decisions are made.
a)    Some Business Rules are obvious while others must be “found”
b)    Business Rules can be operational, strategic or regulatory and they can be system-based or manual
c)    Business Rules control the “behavior” of the process and shape the “experience” of those who touch it
d)    Business Rules are highly prone to obsolescence
e)    We must find and make explicit the Business Rules in the process

Business Rules (BR’s) are especially pernicious in that they are created for specific reasons however over time their origin is forgotten but their effect remains. For instance one Life insurance company had a delay of eight days before issuing a policy once all the initial underwriting work was complete. This has a serious impact on competitiveness as newcomers were able to issue policies in days rather than weeks. After some investigation it was discovered that the ‘8 day storage’ rule was related to the length of time it takes ink to dry on parchment paper. This rule hadn’t surfaced until the customer expectations changed. There are many examples of previously useful rules evading 21st century logic and blocking the achievement of successful customer outcomes. All Business Rules should be made explicit and challenged in todays context.

Next time we'll take a look at the second way to radically redefine process:

• Identify and aligning to Successful Customer Outcomes

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Hypothesis: BPM Really Needs EA (start with the customer)

Courtesy of Steve Melville, EA Connections Manager...

At first blush, this statement might seem absurd. Many of you may already be reflecting on BPM projects where you managed to achieve perfectly fine results without the help of Enterprise Architecture (if an EA group even existed in those organizations).

Ah... the early days of BPM introduction, when low hanging fruit seems ripe for the picking! Hopefully, those successes led to other BPM projects. Wonderful! Sooner or later,

though, questions start to arise. How do all these business processes relate to one another? Where, exactly, do these processes start and stop? Where is the best data source for the information this process requires? How can I "unbundle" this hard-coded business logic that's buried deep in an application, so that I can re-order or insert activities into my business process? How many different BPMS tools do we really need? How can we ensure the processes are available 24x7? Welcome to the domains of Business

Architecture, Information Architecture, Application Architecture and Technology Architecture -- i.e., welcome to EA!

If you continue this Inside-Out journey you run into questions like... Do we really need this or that process? What are all these processes really for? And (with some help from the BP Group) you eventually arrive at the answer... the Customer! Welcome to Outside-In!

So... while I believe there are many facets to the connection between BPM and EA, I'd like to start with the Customer and, specifically, Customer Expectation Management (CEM). If you haven't read Schurter and Towers delightful book on this subject, get it (http://amzn.to/9eaGi6). I liked the book so much when I first read it, that I put together a 1- page CEM Quick Reference Guide for my own use. I am happy to share it with EA Connections members.

Here's a highly condensed thread within CEM:

Your value proposition sets expectations with potential customers. The more compelling your value proposition, the larger the pool of potentially interested customers and the fewer competitors that can match it. So, the goal is to create product and service offerings that set expectations that more customers find compelling and few competitors can match. In so doing, you have re-set the bar for customer expectations within your market and created the foundation for your organization's success.

But here's the catch... you have to deliver against those expectations. One failure and you begin to lose your customer's trust. You lower their expectations with your actions, regardless of your lofty initial promises of value. And, with the explosion of social networking, blogs, 24 hour news channels, online reviews, etc., any failure to deliver against expectations, gets broadcast pretty quickly. Ask BP or Toyota what happens when you fail to meet customer expectations of safety.

So... to match the high expectations of your value proposition, the delivery processes of your organization need to consistently meet those expectations. And it is in the design and deployment of those delivery processes that the critical dependency on EA surfaces. For, in the 21st Century, such processes are heavily dependent on technology:

eCommerce and online support sites, mobile applications, ERP systems, RDBMS, SOA, SANs, etc. And not just some delivery processes, Outside-In companies recognize that the entire enterprise needs to be focused on delivering successful customer outcomes.

So the challenge becomes to align all of the process, application, information and technology resources across the entire enterprise to deliver successful customer outcomes in order to support higher and higher customer expectations. And alignment is the sweet spot of enterprise architecture. EA is the right fit because both its sweep (across the entireenterprise) and its scope (processes, information, application, and the technology that supports them) match the demands of the Operational Framework Layer of the Outside-In enterprise.

Your thoughts?
http://www.linkedin.com/groups?mostPopular=&gid=3180325

Customer Orientation: The Overlooked Driver of Sustained BPM Success

Many companies have eagerly embraced the principles of Business Process Management (BPM) over the past decade. However, in hindsight, it is clear that results are not quite as positive as they first appeared. Recent studies suggest that the BPM success rate (i.e., the frequency with which BPM initiatives achieve, sustain, and continuously improve on performance targets) may be as low as 20%. Many executives confirm that the promised early savings from BPM has quickly dissipated. In short, benefits are not sustained over the long term.

What has gone so wrong?
A core problem is that companies often undertake BPM too narrowly, viewing the issue solely as a matter of identifying and grouping related business process activities, often defined through the short sighted “lens” of the internal customer. This is compounded by a focus on related information and data which further reinforces a ‘within the walls’ view of process. Although some would argue this approach is core within the BPM philosophy, it is simply ‘not of this time’ and doesn’t understand the changed needs of the 21st century customer.

If BPM benefits are to really stick and continue to drive on-going value, much more is required—companies must adopt a new perspective on process which is driven from the ‘Outside-In’. This imperative requires companies to identify their ‘real’ customers – the ones who generate revenue and sustain the organisation - and empower the “process leaders”—the business unit or functional managers who lead the revitalization of business processes and who are accountable for its success.

We articulate this shift to Outside-In thinking and delivery as going way beyond the inner confines of legacy BPM. It liberates the people in the organisation to get on with doing what they know achieves results in both the immediate and long terms. That is achieving Successful Customer Outcomes.

Is your BPM initiative on track? How are you measuring its success? Are you really delivering what is needed in the short term? How’s about ensuring the success that is needed in the long term?

Outside-In (aka Advanced/Enterprise BPM) measures success simply.
For instance in the last year by how much have you achieved simultaneous (a) reduction in costs, (b) growth in revenues and (c) improvement to customer service? Ultimately it is about changing to this customer perspective and achieving these on-going results. Leading companies of the 21st century are already delivering on that promise.


Are you inside-out or Outside-In?

OutsideIn 101. The Webinar Part 1 on June 17.

https://www2.gotomeeting.com/register/567910794

Advanced/Enterprise BPM aka Outside-In

Thought we should post this before it dissolves into the data quagmire that Linked-In is:

What is Outside-In?

1. Outside-In is a philosophy and method of managing an organisation by understanding and delivering Successful Customer Outcomes.

2. Outside-In Process optimizes value-delivery to customers. By fusing customer-driven process with customer-centric strategies, O-I creates successful customer outcomes (SCOs) – the foundation for achieving sustainable growth and profitability in an increasingly buyer-driven marketplace.
(Customer ProcessOne Council, May 2010)

There are many accreditations in the process space. This BP Group community is sponsored by www.bpgroup.org which in turn advocates the Certified Process Professional qualification
(http://www.bp2010.com ).
There are four levels of recognition:
Certified Process Practitioner (CPP-Practitioner)
Certified Process Professional (CPP-Professional)
Certified Process Master (CPP-Master)
Certified Process Advanced Master (CPP-AdvMaster)

A significant part of that hands-on learning is focused on Outside-In and includes discussion of various methods such as CEMMethod http://www.cemmethod.com) and High Yields approach ( http://www.h-ym.com ).

There is a rapidly developing cadre of people and organisations delivering Outside-In training, consultancy and advisory services with case studies, presentations and podcasts at http://www.oibpm.com

The 18th Annual BP Group conference will have a strong flavour of Outside-In with notable organisations who are the pioneers of Outside-In present and delivering case studies, tutorials and workshops. We will be publishing details of that event in Florida in January in the next few days.

The above links are for reference however if you do want a more commercial discussion and personal recommendations drop us a line and we can progress your needs! 

Not least of which is the fifth book - Outside-In, now in its third edition ( http://www.outsideinthesecret.com )