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 book Outside In 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.

LinkedIn: http://bit.ly/joinbpgroup Twitter: http://twitter.com/stowers

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

Identify and aligning to Successful Customer Outcomes

Australia month for the Process Excellence communities

Let’s start with a fantastic PEX offering in Sydney, with the latest PEX Week (July 22-24) chaired by Process Excellence guru and leader Morgan Jones of BOC.

A complete package and been there and done it guy who leads with a passion. Get the latest insights and stories from the Process Excellence world.

http://www.processexcellencesummit.com.au/

The agenda includes diverse organisations including:
BOC,

Morgan Jones, Conference Chair

Rio Tinto, ProExc, Fortescue Metals Group, Transport Accident Commission, National Australia Bank, Theiss Services, Australia Post, Baxter Healthcare, University of Technology Sydney, Australian Taxation Office, BP Group, TCS, Austin Hospital, Fonterra, Department of Resources Energy and Tourism

We will also have the annual Australasia Awards programme where the best share the secrets with the rest of us. A great networking occasion hosted by our Partners IQPC and PEX.
See http://www.processexcellencesummit.com.au/

We then have a nearly sold out CPP Masters (Levels 1-5 inc.) session in Brisbane. w/c 29 July.
Featuring new case studies, an accelerated learning format and of course yours truly this promises to be a very memorable event. Still a couple of places so run along to: See http://brisbanemasters2013.eventbrite.com/

And then we travel south again to the Sydney Masters w/c 5 August.
Always a favoured event in our Australian series you can renew your knowledge (extra special price for refresher (almost zero) – contact Rachel.smith@bpgroup.org) plus the very latest learnings from the hands on doers (not the copies and theorists!) with tips, tricks and the magic of Outside In.

You can check out the agenda and register at: http://australiathewholedeal.eventbrite.com/

First Steps into Outside-In Thinking Part 4b) - Sustained Focus and Reduced Complexity

Outside-In is more than a series of tools and techniques to view and improve our business. It is designed as ‘practical thinking’ or a ‘business attitude’ to be orientated to as much of the business that the practitioner or management requires. If implemented to the greatest degree then a company may design and represent its organisation charts around the customer with the customer as the driving central theme. It may represent performance measures using Outside-In measures as its KPIs.

The thinking does not prevent other techniques to be used in analysing and improving our business but it does ensure Successful Outcome is maintained as a central theme even when CEO’s, boards and senior managers change. If focus is only maintained at a tools and techniques level they tend to be pigeon holed into a specific silo and more likely to become forgotten or ignored as the latest panacea for change raises its head.

Taking the Complexity out of how we view our business
One of the issues that change practitioners face is that of the underlying complexity of the business we are trying to improve or change.

How many changes to the way we do business seem obvious once we have identified what they are but somehow eluded us when we are looking at our businesses as a ‘haystack’ of processes?

When we move from high level management representations to process detail, a much more complex picture emerges which we have defined on the basis on that’s what we do. But if we look at that process again from the customer viewpoint then the process is very different. Outside-In shows that the way we traditionally view process is an illusion and prevents us from viewing business in a way to enable significant change.

Viewing what we do from the perspective of the customer enables us to think of performance change initiatives that would never been possible if we had studied our business from the traditional left to right top to bottom basis inherited from the industrial change.

Great week for reviewing the State of the Process Nation - download them there resources before they go :)

How many places can you go for information?
At the BP Group we have at least TEN, and here are the links:

http://www.successfulcustomeroutcomes.net
- 283 articles on Advanced BPM

http://bpcommunity.blogspot.co.uk/
- 200+ articles on process improvement

https://www.youtube.com/user/snoozers69
- Over 50 videos on the theme

http://www.slideshare.net/stowers/
- More than 70 presentations (downloadable)

http://www.bpgroup.org/
- 80+ courses leading to the Certified Process Professional qualification (CPP) all over the globe through 2013/14

http://www.oibpm.com/
- for all things and links Outside In

http://www.certifiedprocessprofessional.com/
- Professional qualifications since 1992

http://www.processmiracle.com/ - FREE course featuring the Secret Sauce

http://www.bpgroup.org/their-opinion.html - Testimonials about us

http://bit.ly/joinbpgroup - 11,000 members networking with ideas

All the Very Best
Steve

First Steps into Outside-In Thinking Part 4a) - The Successful Customer Outcome

There are a number of key supporting themes - the first is "Exclusive focus on Successful Customer Outcome (SCO)"

The approach, distilled from global leading companies, is Customer Expectation Management

Method (CEMMethod), has a set of principles and philosophy that ensures everything you do is aligned to and improves the SCO. CEMM helps an organization bring their processes, systems, strategy and people into ‘outside-in’ alignment.

Every company in business will have an SCO to a degree – they have to otherwise customers would not buy. OI is built on the philosophy that the better a company impacts its SCO the greater proportion of available business its going to win as a result. Further applying the thinking takes you to places (ie business opportunities) that competition has never been able to exploit and perhaps never thought about.

Apple are producing apps that people never thought they needed whereas Nokia who have built what they believe is technology superiority has had to re-think their approach to business amidst falling revenues and margins. Southwest are close to the era of the free flight ticket and enjoying consistent profitability whereas British Airways are going through possibly the worst business fortunes in its history.

OI is designed on the premise if a process or operation does NOT contribute to the Successful Customer Outcome – you don’t do it! On first analysis this may appear difficult to rationalise – most organisations have non-customer facing departments – how can the principle of the SCO still apply?

If you think about it, an airline is a business which are made up of the same commodity components – similar aeroplanes, customers with roughly the same wants/needs, airports with the ability to offer the same services (if they choose) – yet some operators are flying high and others are sinking towards government bailout or bankruptcy. Both SouthWest and BA will claim customer centricity but OI defines the important outcome components that are critical to business success and under this lens it becomes very clear that BA is left wanting.

What Price Complexity?

Complexity is insidious. Costs go sky high.

People get confused and systems can't cope.
When production and service cycles take forever, and costs are high, chances are that most of your processes are mired in complexity. Since Victorian times, companies have felt compelled to offer consumers whatever they want, creating a myriad of choice with goods and services each having their own process and production lines.

In turn these processes are supported by complex systems and require specific skills for bespoke services and products. How often do you hear the recital “oh we’re very different around here. What we are do is unique in the industry.”
And it probably is to the detriment of the very people you are trying to please - the customer.

Consider a few of the not so hidden costs of complexity:

1. Customer inconvenience – Your customers have to negotiate your complex system and its mind-numbing array of alternatives.
Q. Just how many Moments of Truth are there?

2. Unwieldy sales processes – The sales systems needed to support complex product lines soon grow too cumbersome, whether they require filling out complicated order forms, getting indecipherable invoices or navigating endless voice mail paths.
Q. How many rules exist to ‘guide and direct’ and are now out of date slowing things to crawl?
Q. How many hand-offs occur internally, and are they necessary?
Eradicating those Moments of Truth, Rules and Breakpoints can change everything.

3. Impact on management – Eventually, even your managers will find numerous services and processes too much to track.
Q. How much money have you spent training people to deal with this complexity?
Remove the complexity and those inside-out approaches such as Six Sigma and Lean are not required!

4. As an absolute, the greater an organization’s complexity, the less focused its management.
Q. Where does all that management time get directed? Fire fighting and fixing problems caused by the nightmare of complexity.
Refocus management time to helping align processes for successful outcomes.

Kindest Regards

James Dodkins
Chief Customer Officer
BP Group

First Steps into Outside-In Thinking Part 3 - What is OI in the context of the BP Group?

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.certifiedprocessprofessional.com ).

There are five levels of recognition:
• Certified Process Practitioner (CPP-Practitioner)
• Certified Process Professional (CPP-Professional)
• Certified Process Master (CPP-Master)
• Certified Process Advanced Master (CPP-AdvMaster)

• Certified Process Champion (CPP-Champion)

http://www.cemmethod.com

A significant part of that hands-on learning is focused on Outside-In and includes discussion of various methods such as CEMMethod

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 Annual BP Group conferences 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. Not least of which is Steve Towers book – Outside-In,
now in its fifth edition ( http://www.outsideinthesecret.com )

First Steps into Outside-In Thinking Part 2 - Origins of Outside-In

Despite all the issues documented in Part 1, there have been companies who have regularly ‘bucked’ the trend and posted great business results, grown significantly and sustained that growth.

Outside-In has been built on the approaches and lessons learnt from those companies who have managed to beat the competition and moreover delivered market beating results on a sustained basis. The approaches and techniques have been developed to be easily applied even to those organisations that have already been through numerous change iterations and believe they are as efficient as they could expect to get.

For example SouthWest Airlines posts 58 consecutive quarters of profit when most of their competition made huge losses – in the case of Delta this has been billions AND more than once ‘achieved’ in just a quarter! Apple have introduced innovative new products and regularly posted impressive results and increasing market share when organisations like Motorola who used to be one of the main players in the mobile handset market have dramatically suffered despite having gone through numerous iterations of business improvement.

First Steps into Outside-In Thinking Part 1 - The Challenge

First published by the BP Group 3 years ago here's some of the mindset behind Outside In.

If we consider the challenges of succeeding in business in the 21st century, most major companies would come up with a similar list:

When they talk about their customers
> Competition is fierce, global and increasing.
> Customers have become rebellious, they realise they have the right to alternatives and they frequently exercise that right.
> Customers have high expectations, they demand more and unless that demand is met they will go elsewhere.
> Customers demand choice, comprehensive information and the best price.

When they talk about their operations
> Operations, structures and business flows are becoming ever more complex
> The process of change is becoming ever more complex as the obvious improvements are delivered and the focus is on looking for new improvements often with diminishing returns
> A significant proportion of change projects under-perform and do not achieve the desired outcome
> There are so many alternative methods to effecting change out there it is difficult to select which one makes most sense for my business

When they talk about their overall business performance
> I fundamentally believe I offer a superior product and/or service but I’m still struggling to make the returns I believe possible
> I strive to be a market leader, I believe we have the capability to be a market leader but the issues above prevent me from getting there
> It is difficult to markedly cut my costs without impacting my service levels
> The impact of the global recession has affected my business and our fortunes won’t markedly improve until the business environment improves.

There may be additional comments however this is typical of observations from companies all over the world. And it is getting worse.

It isn’t though we don’t have choice in improvement approaches. As of 2010 there were over 6000 improvement methodologies all geared to helping organisations improve performance. How do you decide which one works best? How do you ensure sustained business improvement when the average CEO in the 21st century lasts 3 years and each new regime brings fresh ideas but a lot of the same issues?

See more of the thinking, practice and qualify as a Certified Process Professional (CPP) www.bpgroup.org

Is Process Excellence growing/declining?

Great question posed in Lean Six Sigma and Process Excellence by Vijay Bajaj. There are several indicators and one of the leading is the amount of internet interest. So let’s look at some stats courtesy of Google.

(Blue BPM, Red SixSigma)

So at first glance BPM is in the ascendency, SIx Sigma declining, however let's factor in Lean for the same period against BPM.

This time we see BPM flat against a more volatile Lean, however Lean had its greatest interest back in 2007.

A much more interesting trend, which impacts all three aspects of Process Excellence is the recent emergence of Customer Experience Management. WIth progressive PEX types pushing the boundaries of process Outside-In rapidly, the migration to "the customer experience is the process" seems well established.

Is CEM the natural evolution of PEX? It certainly seems so.

South Africa Business Process Management 2013 - BPM goes Strategic

ITWebBPM is South Africa's premier event featuring the latest and most incisive business process management learning and next practice.

It was a pleasure meeting so many people from the African continent (and further afield including Finland, Germany and the USA!). Watch the overview video, and if you would like a copy of my keynote, panel sessions or workshop do let me know (steve.towers@bpgroup.org).

Process, Performance, Outside In. Keeping touch via Twitter and the blogs - Let's join hands

Linked-In http://bit.ly/joinbpgroup helps us all exchange information and is a very useful resource as part of being a successful business professional.

Three places to complement Linked-In include:

Twitter: http://twitter.com/stowers
Successful Customer Outcomes: http://bit.ly/SCOblog
BP Community blog: http://bit.ly/bplatest

Oh and of course I would love to connect directly and exchange: http://bit.ly/LinkWithSteve

BPM must sync with company strategy

Business Process Management (BPM) should be part of every organization’s strategic plan.

By Admire Moyo, ITWeb's portals deputy editor.

Johannesburg, May 2013

BPM is all about simultaneously reducing costs, growing revenues and improving customer service, says BP Group’s Steve Towers.

According to Towers, strategy means many things to many people. However, from a BPM context, it means to create a high-performance organization.
“In BPM, strategy is the ability to connect the dots from the front line to the boardroom, and demonstrate how every single activity contributes to the strategy of the organisation.”

He also pointed out that BPM is about simultaneously reducing costs, growing revenues and improving customer service.

See also

On improving customer service, Towers noted that customer needs have changed drastically, thanks to digitisation, which means everyone is connected intimately all the time. “The customer experience is the process and we have to get scientific about the customer experience.”
He also noted that the customer should be at the centre of everything the organisation does and that organisations should work to identify factors that will not contribute to the overall success of the enterprise.

He revealed that many organisations do not understand their business processes or their customers’ needs, which is why they fail in the end. “If you don’t understand your customers, you’ll end up failing like Kodak and Nokia.”

He, therefore, urged organisations to go out of their way and be innovative in order to determine their customers’ needs.

On the other hand, he pointed out that organisations should not make promises to their customers that they will not be able to keep. “I like it when people say you have to go beyond customer expectations. That is impossible because people will always have their own standards. Rather, promise them the best service you can manage.”

Towers also urged organisations to understand and develop successful customer outcomes, create process activity lists, identify moments of truth, identify breakpoints, identify business rules, perform risk assessments, and develop action plans before managing delivery.
“The starting point will be determined by the nature of the challenge. It is, however, essential that a clear and objective understanding of customer needs is articulated. This specifically involves the needs of the customer and goes way beyond traditional voice-of-customer insights.”

Revealing a successful customer outcome project, Towers said organisations must ask: ‘Who is my customer? What is the customer’s current expectation? What is the process the customer thinks they are involved in? How does what we do impact customer success? What does the customer really need from us?’

He added that the primary purpose of crafting successful customer outcomes is creating a fundamental focus for a process or set of processes, or a complete enterprise strategy.
“Advanced BPM aka Outside-In extends way beyond the legacy inside-out thinking to create an actionable strategic and operational objective for the entire organisation.”

Customer Experience Management