By Dick Lee
Principal, High-Yield Methods
Steve Towers
Founder, Vice President, BP Group
Want to watch change in progress? Just look at the turnaround in buyer-seller relations in industrialized nations. Business is having a “Galileo moment.” After assuming for decades customers revolve around companies, guess what? Business is learning its world is round, and companies revolve around customers–at least that’s the rotation for companies planning to stick around a while.
But learning this lesson rarely translates into doing–at least doing enough to become customer-centric. Companies don’t switch to revolving around customers with a memo saying, “Beginning at noon next Monday, we’re going to be nice to customers.” Obviously. But they don’t get there with 1-to-1 marketing strategies, either. Or with sales, marketing and service using CRM software. Or with implementing more customer-friendly service policies. Or with customer analytics. Or with social networking. Or with all the above tactics. No matter what consultants and software salespeople claim.
Moving to a customer-centric business model goes way beyond these incremental changes–and way beyond the comfort levels of many companies. Organizations achieve customer-centricity through transformative change–starting with new beliefs and new cultures, which give rise to new strategies plus new work that converts strategies into actions. And to further the degree of change, new work dominoes change from organizational realignment to redesigned technology support.
Tough to achieve? You betcha. But some companies have already made the transition. In fact, some companies have been customer-centric since formation. They’re the lucky ones. But how did companies having to migrate to customer-centricity get there? There’s one common factor,“Outside-In.” They didn’t call their journey “going Outside-In.” In fact the term only surfaced several years ago, in conjunction with a Virgin Mobile customer-centric initiative. But they’ve all followed the same pattern. Now, more companies are following in their footsteps. And when something new happens frequently enough, spurred by champions “spreading the gospel,” we give it a name (hopefully not a three-letter acronym). Hence “Outside-In.”
So what is it?
Outside-In is the fusion of planning and process design into one, integrated, customer-centric activity.
The planning part redesigns strategies from a thoroughly customer perspective. And by “strategies” I don’t mean marketing, promotion, branding, stuff that advertising agencies do. I’m talking products, services, delivery, in some cases core business direction–all invented or renewed with an adult dose of innovation. It starts with “finding your inner customer,” “seeing through customer eyes,” “standing in customer shoes,” or whatever you want to call it. And results in companies raising the competitive bar, often high enough that others can’t clear it. If, that is, new strategies trigger new work.
That’s the process piece. Defining what work should be done to implement new strategies; who should do it; how it should be done; and enabling technology[1]requirements. Some call this “customer-centric infrastructure,” others “customer-optimizing operations,” but it doesn’t matter. Just no TLAs.
Worked together, these two Outside-In elements align strategy to customers; process to strategy; and technology to process–creating the spine of a customer-centric company.
Outside-In creates a framework for designing, organizing and simplifying the migration to customer-centricity–true customer centricity. The type that adds new value to customers as the only reliable means of adding new value to the company. Not that the transition is ever “simple.” But business will have to get there. Because when one player in a sector goes Outside-In, others will have to follow, or risk being left to an unhappy fate.
Just look at what happened to consumer electronics chains in the U.S. once Best Buy went Outside-In. Circuit City and CompUSA might as well have been bugs beneath a work boot. Squish. But that’s the usual fate when a competitor beats you to putting customers in the center of your business circle. Squish.
True, some companies survive by scurrying to change reactively. UPS has stayed profitable while scrambling to match customer-centric moves by FedEx. But how many companies have the strength and resources of UPS?
Despite the probability of facing dire consequences sooner or later, many change-averse companies continue to sit rather than change. As a past client once said to me, “I know we have to change, but we can’t stop doing what got us here.” They circle the wagons to protect themselves from customers fighting to take over the center of their circle. Or, perhaps a better analogy, they engage in a tug-of-war with customers over who controls buyer-seller relationships. Just one problem. There’s an 800 pound gorilla on the customer end of the rope, and she ain’t budging. And just wait until she gets impatient and starts pulling. When she does pull, companies will have to get Outside-In quickly, if they’re not already–or risk going upside-down.
Don’t wait until you’re forced to go Outside-In. Proactive change works so much better than reactive. Twice the gain with half the pain. So best to get a handle on Outside-In now, while you can still leave competitors behind.
[1] We italicized the four Outside-In process components because they represent transformative change in the process world. This isn’t your father’s process. For that matter, it’s likely not yours–yet.
Dick Lee
Dick Lee is the founder of High-Yield Methods, a Outside-In consultancy focused on helping clients align strategy with customers, process with strategy and technology with process. In 1996, HYM launched the first, formal, Outside-In process approach, Visual Workflow. In addition to consulting with clients including American Express, Honeywell and Microsoft, Dick is a speaker, educator and author of several books and numerous white papers and journal articles.
Dick is an Executive Advisor for Towers Associates and sits on the board of the BP Group.
Steve Towers
Steve Towers is the founder of the Business Process Management Group a global business network exchanging ideas and best practice in Business Process & Performance Management, Transformation and Process Improvement. He works with many of the leading fortune 500 companies as a mentor, coach and sometimes consultant specializing in the implementation of performance improvement, process change and transformation. He has written several books, many business articles and appears on radio and TV. Steve previously worked for Citibank where he led restructuring and business process transformation programs both in the US and Europe.
Steve is an Executive Advisor for High-Yield Methods and sits on the board of the BP Group.
The BP Group
The BP Group is a global 'not for profit' business network originally founded in 1992.
As a 'not for profit' the vision is to connect and network people interested in significantly improving organisation processes and as a consequence business performance. Our mission is to help improve individual and corporate performance through advanced process management.
Pleasing Customers all the time?
This is a follow-up to 'How to really annoy Americans'. You can join the extensive discussion to the original article at http://bit.ly/DdCLW
Let's turn our attention instead to making people happy and for that we need a candidate organisation who know precisely how to create and manage call centres and the resulting activities. This is also derived from ARG's research and provides useful pointers to all of us who need to intereact with customers via the phone.
Every telephone operator at Cabela's speaks English, and a customer never speaks to a machine. "Every single call is answered by a live person," Ron Spath, VP Customer Relations, states "We don't have any interactive voice recorders and there are no menu's. The feedback from our customers is very clear about how they appreciate not having to waste a lot of time to someone who speaks broken English. We realise that outsourcing these calls to india costs less but we think it is a good investment to pay more in order to save customers time."
To cap it Cabela's, the worlds largest outdoor retailer, even prints its telephone number on the front and every page of its website. Just imagine that, a company who actaully want to talk and learn from their customers.
This positive Outside-In approach pays on the bottom line and has seen Cabela grow to being the world leader in its market in just 50 years. You can read the story at http://bit.ly/xHYzL
So is it that hard to do. Actually let people talk to people that really understand?
Let's turn our attention instead to making people happy and for that we need a candidate organisation who know precisely how to create and manage call centres and the resulting activities. This is also derived from ARG's research and provides useful pointers to all of us who need to intereact with customers via the phone.
Every telephone operator at Cabela's speaks English, and a customer never speaks to a machine. "Every single call is answered by a live person," Ron Spath, VP Customer Relations, states "We don't have any interactive voice recorders and there are no menu's. The feedback from our customers is very clear about how they appreciate not having to waste a lot of time to someone who speaks broken English. We realise that outsourcing these calls to india costs less but we think it is a good investment to pay more in order to save customers time."
To cap it Cabela's, the worlds largest outdoor retailer, even prints its telephone number on the front and every page of its website. Just imagine that, a company who actaully want to talk and learn from their customers.
This positive Outside-In approach pays on the bottom line and has seen Cabela grow to being the world leader in its market in just 50 years. You can read the story at http://bit.ly/xHYzL
So is it that hard to do. Actually let people talk to people that really understand?
Outside-In Process: The New Path to Customer-Centricity
By Dick Lee, High-Yield Methods
Peter Drucker famously opined that the greatest risk to organizations was neither doing the right work wrong nor doing the wrong work but not seeing or reacting to profound change occurring around us. Today, we're in such a period of transformational change, with a powerful confluence of forces driving up the power of customers in buyer-seller relationships—and correspondingly depressing the potential for sellers to stay competitive while putting their own interests ahead of customer interests.
That this change is occurring is almost beyond debate. But how to effectively respond to this sea change is not only a matter for debate, but a source of great frustration for sellers. Fortunately, a growing number of companies are showing the way by proactively treating the rise in customer power as an opportunity rather than a threat—and using an approach becoming known as "Outside-In Process" or just "Outside-In" to build bridges extending out to customers.
Profiting from putting customers first
Since 1996, when it brought its first commercial product to market, Gilead Sciences has been among a group of companies providing pharmaceuticals to treat medical problems resulting from HIV-AIDS. But in 2006, Gilead leapt ahead of the pack by introducing a new drug developed not just for medical efficacy, but to improve quality of life for AIDS sufferers while also increasing patient compliance with following what had been an extraordinarily complex drug regimen.
A growing number of companies are showing the way by proactively treating the rise in customer power as an opportunity rather than a threat.
Gilead stepped outside of outcomes data and all the standard product development protocols to see medication through patient and physician eyes. And what it saw was patients taking its own "drug cocktail" in 17 different daily doses that required exact sequencing, including some via IV. And what Gilead also saw were patients unable to follow the regimen and falling off their medication as a result. Classic Outside-In vision through customers' eyes. And classic Outside-In customer problem identification that lead to both a medical breakthrough and a customer breakthrough.
Access the full article here > http://bit.ly/fnmU0 <
How to please all your customers all the time
This is a follow-up to 'How to really annoy Americans'. You can join the extensive discussion to the original article at http://bit.ly/DdCLW
Let's turn our attention instead to making people happy and for that we need a candidate organisation who know precisely how to create and manage call centres and the resulting activities. This is also derived from ARG's research and provides useful pointers to all of us who need to intereact with customers via the phone.
Every telephone operator at Cabela's speaks English, and a customer never speaks to a machine. "Every single call is answered by a live person," Ron Spath, VP Customer Relations, states "We don't have any interactive voice recorders and there are no menu's. The feedback from our customers is very clear about how they appreciate not having to waste a lot of time to someone who speaks broken English. We realise that outsourcing these calls to india costs less but we think it is a good investment to pay more in order to save customers time."
To cap it Cabela's, the worlds largest outdoor retailer, even prints its telephone number on the front and every page of its website. Just imagine that, a company who actaully want to talk and learn from their customers.
This positive Outside-In approach pays on the bottom line and has seen Cabela grow to being the world leader in its market in just 50 years. You can read the story at http://bit.ly/xHYzL
So is it that hard to do. Actually let people talk to people that really understand?
Let's turn our attention instead to making people happy and for that we need a candidate organisation who know precisely how to create and manage call centres and the resulting activities. This is also derived from ARG's research and provides useful pointers to all of us who need to intereact with customers via the phone.
Every telephone operator at Cabela's speaks English, and a customer never speaks to a machine. "Every single call is answered by a live person," Ron Spath, VP Customer Relations, states "We don't have any interactive voice recorders and there are no menu's. The feedback from our customers is very clear about how they appreciate not having to waste a lot of time to someone who speaks broken English. We realise that outsourcing these calls to india costs less but we think it is a good investment to pay more in order to save customers time."
To cap it Cabela's, the worlds largest outdoor retailer, even prints its telephone number on the front and every page of its website. Just imagine that, a company who actaully want to talk and learn from their customers.
This positive Outside-In approach pays on the bottom line and has seen Cabela grow to being the world leader in its market in just 50 years. You can read the story at http://bit.ly/xHYzL
So is it that hard to do. Actually let people talk to people that really understand?
Where in BPM is the Customer?
This is something scribed three years ago just after the launch of the book 'Customer Expectation Management - Success without Exception'.
Has anything changed? Well yes and no - however you be the judge.
The application of Business Process Management (BPM) is known to have multiple benefits that produce a hard return on investment (ROI). Automation, quality, compliance, management, and optimization of activities represented by business processes are the areas most often cited in this regard. Yet generally the focus of BPM started – and remains – as an “inside-out” perspective, placing hard limits on the benefits BPM can achieve.
At a time where customer satisfaction and loyalty have reached historic lows, and competition has reached its historical peak, the question must be asked, “where in BPM is the customer?” Yes, the customer is a missing piece in the vast majority of BPM practices and products. Management principles have traditionally approached business success from the inside-out perspective, concentrating on margin-based improvements. That made a lot of since during the time when internal activities suffered from substantial bloat and competition was limited by geography and time to market.
Yet over the years we have dipped into that well many times, and the well is about to run dry. Some statistics suggest as we continue to try to achieve the same percentage of gain through each improvement cycle, each iteration produces significantly less tangible value to the organization. It’s a funnel affect that just gets narrower and narrower through every cycle, leaving less and less real benefit for the business.
Meanwhile what is really driving business success? The answer, of course, is the customer. In the 21st Century Value Chain. It is the number of customers and the lifecycle of the business-customer relationship that determines business success.
Known as Customer Expectation Management, the setting of customer expectations and the delivery of those expectations without exception is the “secret sauce” behind the success of market-leading companies such as Virgin, Fedex, Zara, Best Buy, and Southwest Airlines, to name a few.
Many of these market leaders are not competing on price. Sure, their prices are competitive but that is not where their success lies. In many cases they are even able to charge a premium for their products because they are setting and managing customer expectations with a vengeance. They are telling customers what to expect, making their customers’ lives simpler and easier while delivering on these expectations with consistency.
Meanwhile, price competitors are stuck in a no-holds barred dogfight for the worst customer any business can have, the customer who buys predominately by price. There is no place where customers are less loyal and more demanding than in the arena of lowest-price decision buying.
Taking Customers to Heart
Yet BPM by-in-large doesn’t include the customer except as an adjunct to inside-out activities. Improving quality and streamlining processes can help reduce really poor customer experiences or align a business with the market expectation a competitor has set. But these are only secondary effects to the goals of reducing internal costs, increasing worker productivity and so on.
In an age verging on unlimited choice, global competition, and customers often livid with dissatisfaction, the only way to be a market leader is to be a customer leader. We all know that our businesses must have customers and we have all had our share of unsatisfactory customer experiences. In spite of this, why is it so difficult for us to quit viewing our business from the inside-out? Habit and tradition is all that is holding us back. Will we allow our history to determine our future? It’s our choice.
Is there a way to know if the customer is really part of the BPM practice?
Absolutely. Take a look at your business processes. All business processes have an outcome, right? So how many of your business processes have a customer outcome? What about the concept of a successful customer outcome (SCO)?
To fulfill its destiny of being the Next-Generation Business Enabler that its proponents want it to be, BPM must realign its focus to the customer. Business processes must focus on the customer, minimize potential points of failure (such as Moments of Truth, which yield either Moments of Magic or Moments of Misery), and produce successful customer outcomes at all points where the customer touches the business.
That’s the essence behind Customer Expectation Management. It is the critical element in the drive to increase growth and profitability. Traditional inside-out process improvement leverages customer success by maximizing the net positive effect to the organization’s bottom line but it won’t create success by itself.
The only reason we are here is to serve our customers and by serving our customers, making their lives simpler and easier, and helping them be successful we will make our businesses successful. It’s simple and straightforward. Focusing on the customer from the customer’s point of view is our opportunity to achieve the success we all want. It’s the experience we all want when we are in the role of the customer. It should be at the heart of everything we do and should be woven into the fabric of every application and system we use.
Will BPM be a cornerstone in the creation of success for your business?
It could be, but the question you should be asking yourself is far simpler:
Is the customer at the heart of your BPM plan?
The principles above are derived from direct experience and research within world leading companies. Prospective Certified Process Professionals gain full exposure to the techniques, tools and CEMMethod(tm) in the Business Professional programme
Has anything changed? Well yes and no - however you be the judge.
The application of Business Process Management (BPM) is known to have multiple benefits that produce a hard return on investment (ROI). Automation, quality, compliance, management, and optimization of activities represented by business processes are the areas most often cited in this regard. Yet generally the focus of BPM started – and remains – as an “inside-out” perspective, placing hard limits on the benefits BPM can achieve.
At a time where customer satisfaction and loyalty have reached historic lows, and competition has reached its historical peak, the question must be asked, “where in BPM is the customer?” Yes, the customer is a missing piece in the vast majority of BPM practices and products. Management principles have traditionally approached business success from the inside-out perspective, concentrating on margin-based improvements. That made a lot of since during the time when internal activities suffered from substantial bloat and competition was limited by geography and time to market.
Yet over the years we have dipped into that well many times, and the well is about to run dry. Some statistics suggest as we continue to try to achieve the same percentage of gain through each improvement cycle, each iteration produces significantly less tangible value to the organization. It’s a funnel affect that just gets narrower and narrower through every cycle, leaving less and less real benefit for the business.
Meanwhile what is really driving business success? The answer, of course, is the customer. In the 21st Century Value Chain. It is the number of customers and the lifecycle of the business-customer relationship that determines business success.
Known as Customer Expectation Management, the setting of customer expectations and the delivery of those expectations without exception is the “secret sauce” behind the success of market-leading companies such as Virgin, Fedex, Zara, Best Buy, and Southwest Airlines, to name a few.
Many of these market leaders are not competing on price. Sure, their prices are competitive but that is not where their success lies. In many cases they are even able to charge a premium for their products because they are setting and managing customer expectations with a vengeance. They are telling customers what to expect, making their customers’ lives simpler and easier while delivering on these expectations with consistency.
Meanwhile, price competitors are stuck in a no-holds barred dogfight for the worst customer any business can have, the customer who buys predominately by price. There is no place where customers are less loyal and more demanding than in the arena of lowest-price decision buying.
Taking Customers to Heart
Yet BPM by-in-large doesn’t include the customer except as an adjunct to inside-out activities. Improving quality and streamlining processes can help reduce really poor customer experiences or align a business with the market expectation a competitor has set. But these are only secondary effects to the goals of reducing internal costs, increasing worker productivity and so on.
In an age verging on unlimited choice, global competition, and customers often livid with dissatisfaction, the only way to be a market leader is to be a customer leader. We all know that our businesses must have customers and we have all had our share of unsatisfactory customer experiences. In spite of this, why is it so difficult for us to quit viewing our business from the inside-out? Habit and tradition is all that is holding us back. Will we allow our history to determine our future? It’s our choice.
Is there a way to know if the customer is really part of the BPM practice?
Absolutely. Take a look at your business processes. All business processes have an outcome, right? So how many of your business processes have a customer outcome? What about the concept of a successful customer outcome (SCO)?
To fulfill its destiny of being the Next-Generation Business Enabler that its proponents want it to be, BPM must realign its focus to the customer. Business processes must focus on the customer, minimize potential points of failure (such as Moments of Truth, which yield either Moments of Magic or Moments of Misery), and produce successful customer outcomes at all points where the customer touches the business.
That’s the essence behind Customer Expectation Management. It is the critical element in the drive to increase growth and profitability. Traditional inside-out process improvement leverages customer success by maximizing the net positive effect to the organization’s bottom line but it won’t create success by itself.
The only reason we are here is to serve our customers and by serving our customers, making their lives simpler and easier, and helping them be successful we will make our businesses successful. It’s simple and straightforward. Focusing on the customer from the customer’s point of view is our opportunity to achieve the success we all want. It’s the experience we all want when we are in the role of the customer. It should be at the heart of everything we do and should be woven into the fabric of every application and system we use.
Will BPM be a cornerstone in the creation of success for your business?
It could be, but the question you should be asking yourself is far simpler:
Is the customer at the heart of your BPM plan?
The principles above are derived from direct experience and research within world leading companies. Prospective Certified Process Professionals gain full exposure to the techniques, tools and CEMMethod(tm) in the Business Professional programme
How to really Annoy American Customers
This is based on the research from ARG (Charleston)..
To really annoy your customers have them talk to a telephone operator in India.
The numbers from ARG reveal an uncomfortable truth:
"43% of Americans told us they can't understand what a person from India is saying" and .. "21% get downright angry" Also "95% say they are provoked when a person speaks broken English when they answer their call" The same survey says "32% of Americans said its driven them to stop doing business with the company".
We'll review one excellent case study why it doesn't have to be that way in the next mini article.
What is your experience?
To really annoy your customers have them talk to a telephone operator in India.
The numbers from ARG reveal an uncomfortable truth:
"43% of Americans told us they can't understand what a person from India is saying" and .. "21% get downright angry" Also "95% say they are provoked when a person speaks broken English when they answer their call" The same survey says "32% of Americans said its driven them to stop doing business with the company".
We'll review one excellent case study why it doesn't have to be that way in the next mini article.
What is your experience?
Process & Organisation Maturity - ORCA
Within the CEMMethod(tm) we talk extensively of Organisation Maturity. The Organisation Readiness and Competence Assessment (ORCA) is designed to help with that endeavour. Now in its 5th year it has been extensively deployed by organisations seeking answers to the three questions:
1. Where are we now?
2. Where do we want to get to?
3. How big is the gap?
Certified Process Professionals have access to the full toolkit - for more information visit www.bp2009.com
Here is the ORCA overview:
1. Where are we now?
2. Where do we want to get to?
3. How big is the gap?
Certified Process Professionals have access to the full toolkit - for more information visit www.bp2009.com
Here is the ORCA overview:
Process Improvement - the tip of the iceberg
Most process improvement techniques focus on only a small portion of the improvement potential in every process… the tip of the iceberg if you will. How big is the opportunity resting out of our sight, hidden below the waterline of current practices?
Recent research by the BP Group suggests that 70 to 90 percent of the work people do comes directly from process Points of Failure and Causes of Work and this work is NOT part of the “job” for which these people were hired! Instead, this is non-value add work that takes away from people’s ability to do their job.
Does this sound familiar? Can you identify places where these Points of Failure and Causes of Work are distracting you from what you really want to be doing?
Are you required to fill out this form, check up on that order, or follow-up on those activities? Do you get tasked with finding the answer, knowing the rules, fighting that fire or explaining why you did this or that?
Fixing affects (the tip of the iceberg) only gets us so far. To create real change in how efficiently we use our time requires us to focus on eliminating the Causes of Work (the rest of the iceberg).
This is the first step we must take in aligning our businesses for success in the 21st Century.
Complexity is the Result of lack of alignment to customer success PART TWO
The debate rages over at the BP Group Linkedin zone... see http://bit.ly/LBhwq
Eliminating the Causes of Work
Fixing effects is a lot like shuffling the chairs on the deck of the Titanic. Lots of work gets done and things look different but the original problem still remains.
Fixing effects increases the complexity of our work and the technology we us to support it. It’s a vicious cycle many of us are stuck in. The more we do the worse it gets. Soon analysis paralysis sets in. We’re stuck and there’s no place for us to go.
Meanwhile successful companies around the world are now eliminating causes rather than fixing effects. But how do they spot causes and eliminate them? Is a host of Master Black Belt Cause Eliminators needed to get the job done?
Of course not. Moments of Truth, Break Points and Business Rules are the causes of work. Once we start looking for them we spot them. Elimination comes from challenging what we currently do - looking for Actions that eliminate Moments of Truth, Break Points and Business Rules.
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. Are you ready to challenge your assumptions and start eliminating those causes of work?
Fixing effects increases the complexity of our work and the technology we us to support it. It’s a vicious cycle many of us are stuck in. The more we do the worse it gets. Soon analysis paralysis sets in. We’re stuck and there’s no place for us to go.
Meanwhile successful companies around the world are now eliminating causes rather than fixing effects. But how do they spot causes and eliminate them? Is a host of Master Black Belt Cause Eliminators needed to get the job done?
Of course not. Moments of Truth, Break Points and Business Rules are the causes of work. Once we start looking for them we spot them. Elimination comes from challenging what we currently do - looking for Actions that eliminate Moments of Truth, Break Points and Business Rules.
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. Are you ready to challenge your assumptions and start eliminating those causes of work?
Complexity is the result of lack of alignment to customer success (Part 1 of 4)
There is no excuse for complexity. It is a consequence of muddled thinking and a lack of understanding of the true goal of the organisation, which is creating Successful Customer Outcomes.
Complexity has developed as organisations have added new routes to market, new ways of delivering service, new enterprise IT systems and a myriad of improvement approaches. Each internal functional specialism has developed a mindset to optimise their part of the organisation, sometimes at the expense of others. The unwieldy complexity that results has caused a reaction primarily aimed at the need to create order out of this chaos, as if accepting that complexity itself as a right to be. This is not so. Let us unravel the muddle of complexity once and for all.
All work in an organisation is fundamentally created by the need to provide product or service to the customer. Everything else is a consequence of that need, which creates value for the shareholders and creates a livelihood for the work force. All else follows.
Furthermore all interactions in meeting the needs for customers are the cause of all work within an organisation. These interactions, or Moments of Truth[i], create work in so far as we need to attend to a request internally.
In doing so we interact with our colleagues, systems and other internal processes, and create internal Moments of Truth, which can be referred to as Breakpoints[ii]. The way we deal with Moments of Truth and Breakpoints is underpinned by Business Rules[iii] which may be thought of as ‘decision points within processes’.
These three entities determine the shape of our organisation, the internal landscape of how we do work. The resulting activities from Moments of Truth, Breakpoints and Business Rules create the very processes themselves. In fact process is simply an effect caused by the way we choose to interact and guide the customer to obtain our products or service.
Think about that – process is an effect. If that is the reality then the vast range of tools and techniques created in the last century, and sometimes before, are fixing an effect. It is like taking painkillers for discomfort and nothing more. If we are not getting to grips with the causes of the pain it will surely get worse and as we discover, stronger pain killers are then required.
That’s the rub. We have been systematically fixing the wrong things and is it any wonder that change doesn’t stick? Have you ever had that feeling that this is the same project challenge as before, just dusted off and here we go again? It is because we are not fixing the causes of work, and while we continue to ignore the causes the complexity worsens, costs increase and service suffers.
Einstein put it well when he said
“We can’t solve problems using the same kind of thinking we used when we created them”
Part Two: Case Study – UK Bank “How complexity developed” - See http://bit.ly/LBhwq
[i] Moments of Truth – a concept discovered and explained by Jan Carlson.
Any interaction with the customer is a Moment of Truth.
[ii] Breakpoints – internal handoffs within an organisation.
[iii] Business Rules -Decision Points within a Process.
Complexity has developed as organisations have added new routes to market, new ways of delivering service, new enterprise IT systems and a myriad of improvement approaches. Each internal functional specialism has developed a mindset to optimise their part of the organisation, sometimes at the expense of others. The unwieldy complexity that results has caused a reaction primarily aimed at the need to create order out of this chaos, as if accepting that complexity itself as a right to be. This is not so. Let us unravel the muddle of complexity once and for all.
All work in an organisation is fundamentally created by the need to provide product or service to the customer. Everything else is a consequence of that need, which creates value for the shareholders and creates a livelihood for the work force. All else follows.
Furthermore all interactions in meeting the needs for customers are the cause of all work within an organisation. These interactions, or Moments of Truth[i], create work in so far as we need to attend to a request internally.
In doing so we interact with our colleagues, systems and other internal processes, and create internal Moments of Truth, which can be referred to as Breakpoints[ii]. The way we deal with Moments of Truth and Breakpoints is underpinned by Business Rules[iii] which may be thought of as ‘decision points within processes’.
These three entities determine the shape of our organisation, the internal landscape of how we do work. The resulting activities from Moments of Truth, Breakpoints and Business Rules create the very processes themselves. In fact process is simply an effect caused by the way we choose to interact and guide the customer to obtain our products or service.
Think about that – process is an effect. If that is the reality then the vast range of tools and techniques created in the last century, and sometimes before, are fixing an effect. It is like taking painkillers for discomfort and nothing more. If we are not getting to grips with the causes of the pain it will surely get worse and as we discover, stronger pain killers are then required.
That’s the rub. We have been systematically fixing the wrong things and is it any wonder that change doesn’t stick? Have you ever had that feeling that this is the same project challenge as before, just dusted off and here we go again? It is because we are not fixing the causes of work, and while we continue to ignore the causes the complexity worsens, costs increase and service suffers.
Einstein put it well when he said
“We can’t solve problems using the same kind of thinking we used when we created them”
Part Two: Case Study – UK Bank “How complexity developed” - See http://bit.ly/LBhwq
[i] Moments of Truth – a concept discovered and explained by Jan Carlson.
Any interaction with the customer is a Moment of Truth.
[ii] Breakpoints – internal handoffs within an organisation.
[iii] Business Rules -Decision Points within a Process.
Latest Includes: You can't manage what you can't measure (or can you?)
The weekly update on the BP Group LinkedIn has some interesting perspectives:
Group Metrics:
Members: 2,356 (up 370 from last month)
Discussions: 220 (Each Month)
Subgroups: 4
******************************************************************************
Articles/Discussions underway this week - more than 224 underway!
Dick Lee - You can't manage what you can't measure (or can you?)
http://bit.ly/1JhU53
Steve Towers - BP GROUP SOAPBOX 2: Six Sigma caused the Financial crash
http://bit.ly/5DZ21
Thomas Olbrich - Barriers to Outside-In (Outside-In subgroup)
http://bit.ly/jIPF8
Janne Ohtonen - The Gap Between IT & the Business (Research & Study subgroup)
http://bit.ly/ETOXE
Fast links to key BPM resources - http://bit.ly/Hd1pB
******************************************************************************
Subgroups:
Steve Towers – Group Controller and the Business Process Professional subgroup
http://www.linkedin.com/groups?gid=2056203
Also on twitter – http://www.twitter.com/stowers
Connect directly - http://bit.ly/11txOl and if you need an email use steve.towers@bpgroup.org
Dick Lee (US) – Group Manager and the Outside-In Process subgroup (100+ members)
http://www.linkedin.com/groups?gid=2057992
Janne Ohtonen (Finland) - Group Manager and the Research & Study subgroup
http://www.linkedin.com/groups?gid=2060282
John Corr (UK) – Group Manager and the Advanced Process Management subgroup
http://www.linkedin.com/groups?gid=2056169
Stéphane Haelterman (Belgium) – Group Manager
David Mottershead (Australia) – Group Manager
Erika Westbay (US) – Group Manager
******************************************************************************
Do you need Business Process Management, Certification (7,000 in 4 years), or Coaching Support?
Visit http://www.bp2009.com for the program or learn more at http://www.businessprocessprofessional.com
******************************************************************************
Webinars:
Quick Update on the mid year series underway. All Registrants will receive a copy of the webinars when the series completes
The sessions so far are producing lots of feedback and we'll make available a review of these soon.
If you would like to join in then this week features FIVE Free webinars.
+++ For CPP people these webinars add 2 credits for certifcation renewal in 2009 +++
Review and register at http://www.bpgroup.org
******************************************************************************
Recommended Conference (This week) - http://bit.ly/3bb8mZ
Recommended Conference (January 2010) - http://bit.ly/w2JWW
******************************************************************************
Group Metrics:
Members: 2,356 (up 370 from last month)
Discussions: 220 (Each Month)
Subgroups: 4
******************************************************************************
Articles/Discussions underway this week - more than 224 underway!
Dick Lee - You can't manage what you can't measure (or can you?)
http://bit.ly/1JhU53
Steve Towers - BP GROUP SOAPBOX 2: Six Sigma caused the Financial crash
http://bit.ly/5DZ21
Thomas Olbrich - Barriers to Outside-In (Outside-In subgroup)
http://bit.ly/jIPF8
Janne Ohtonen - The Gap Between IT & the Business (Research & Study subgroup)
http://bit.ly/ETOXE
Fast links to key BPM resources - http://bit.ly/Hd1pB
******************************************************************************
Subgroups:
Steve Towers – Group Controller and the Business Process Professional subgroup
http://www.linkedin.com/groups?gid=2056203
Also on twitter – http://www.twitter.com/stowers
Connect directly - http://bit.ly/11txOl and if you need an email use steve.towers@bpgroup.org
Dick Lee (US) – Group Manager and the Outside-In Process subgroup (100+ members)
http://www.linkedin.com/groups?gid=2057992
Janne Ohtonen (Finland) - Group Manager and the Research & Study subgroup
http://www.linkedin.com/groups?gid=2060282
John Corr (UK) – Group Manager and the Advanced Process Management subgroup
http://www.linkedin.com/groups?gid=2056169
Stéphane Haelterman (Belgium) – Group Manager
David Mottershead (Australia) – Group Manager
Erika Westbay (US) – Group Manager
******************************************************************************
Do you need Business Process Management, Certification (7,000 in 4 years), or Coaching Support?
Visit http://www.bp2009.com for the program or learn more at http://www.businessprocessprofessional.com
******************************************************************************
Webinars:
Quick Update on the mid year series underway. All Registrants will receive a copy of the webinars when the series completes
The sessions so far are producing lots of feedback and we'll make available a review of these soon.
If you would like to join in then this week features FIVE Free webinars.
+++ For CPP people these webinars add 2 credits for certifcation renewal in 2009 +++
Review and register at http://www.bpgroup.org
******************************************************************************
Recommended Conference (This week) - http://bit.ly/3bb8mZ
Recommended Conference (January 2010) - http://bit.ly/w2JWW
******************************************************************************
North American Airlines customer satisfaction falls to a 4-year low
J D Powers latest survey (issued June 30, 2009) ranks the Customer Experience of 13 Airlines.
An indicator of the trend to 'Outside-In' business models is the performance of companies delivering consumer oriented products and services (B2C) and no less so than the airline sector.
The survey, which queried nearly 13,000 travelers, measured airlines in seven categories: cost and fees; flight crew; in-flight services; aircraft; boarding/deplaning/baggage; check-in; and reservation.
"Any improvements in customer satisfaction are being offset by passenger displeasure with cutbacks on in-flight amenities, increases in fees and attitudes of flight crews,” says Dale Haines, senior director of the travel practice at J.D. Power and Associates, in a statement.
We have taken J D Powers data and with additional commentary combined results from the latest survey to present a complete picture of airline performance across the sector, ranked in terms of the customers importance.
Observations
J D Powers separates the report into two - traditional carriers and low cost airlines. We think that distinction is no longer as relevant to the customer experience as, for instance 'low cost carrier' Jet Blue offer a fully and complete range of services, on a par if not better than most regarded as 'traditional'.
In fact 'traditional' service is a poor cousin of much of the 'low cost carriers'. Also the distinction of traditional carriers having multicabin is lost on the vast majority of travelers, as for instance several carriers only additional facility in a higher class is to offer a 'free' drink and newspaper. Much has been said about the failure of tradtional carriers to effectively manage the customer expectation with feedback such as this experience is not unusual (thanks to Vicky Cartwright, e2e Technologies Ltd; Broadcast Media Consultant).
It is reassuring to see the data represented as the customer experience, rather than a set of activities. This distinction should be applied to all consumer surveys, measuring as it does the customers view of the process.
Additional steps could be taken to extend the scope of the actual survey to include the total customer experience, for instance the airport services and facilities, the transportation systems, the ease of access and egress from the airports. That actual customer experience is a big part of the consumer decision making process of which airline to fly.
Infact more progressive airlines now consider that complete customer experience as their process, and while they can't own every aspect of it they can partner and control it. For instance Southwest's partnering with various hotel chains to provide a unified check-out/check-in service is an improvement to customer service while at the same time reducing Southwests costs and growing future revenues.
As consumers it is the smart thing for airlines to do and changes the customer expectation of others. This lifting of the bar places further pressure on the inside-out carriers who continue to see a drift of passengers to a complete offering.
These aspects of travel are making their customers lives easier, simpler and more successful.
Here's the consolidated table combining the results produced by J D Power.
In summary Alaska Airlines ranked highest for a second consecutive year. JetBlue once again performed well, topping the low cost carriers followed closely by Southwest.
It is worth noting that all top five performers are 'outside-in'** companies.
More on this theme soon!
See the complete J D Power report here.
**New to the distinction of 'inside-out' to 'outside-in'?
Here's a quick summary provided by BP Group LI Manager, David Mottershead
An outside in process is one which has been created to successfully deliver a customer outcome and has been designed from the customer's perspective. This process is likely to reduce the number of moments of truth or interactions with the organisation and is "doing the right things", in terms of delivering the process as part of an overall customer success strategy.
An inside out process may be thought of as one which also provides the goods or services to the customer, but the process to provide these are viewed from the organisation's perspective. It may be "doing things right" but not necessarily "doing the right things". It may seek to improve the customer's experience, but not necessarily aligned with delivering a successful customer outcome, or what the customer really wants.
>David Mottershead, CPP (Certified Process Professional) - Creative Digital Technology (Australia)
Fundamentally flawed thinking (for the 21C) is why companies like British Airways and the Detroit car industry are going bust.
This example tells you much about the demise of many - see http://bit.ly/drVHa - with the quote from CIO Update "A process is a process is a process, whether it is the manufacturing floor or airline passenger check-in. And what worked for manufacturing in Detroit years ago is also working for British Airways."
(as a matter of fact it isn't)
This typifies the inside-out thinking which does not acknowledge anywhere near sufficiently the Successful Customer Outcome. It might have worked in the 70's and 80's but it just isn't sufficient anymore.
There's an active discussion underway on the BP Group LinkedIn community - join it here http://bit.ly/eHSEz
(as a matter of fact it isn't)
This typifies the inside-out thinking which does not acknowledge anywhere near sufficiently the Successful Customer Outcome. It might have worked in the 70's and 80's but it just isn't sufficient anymore.
There's an active discussion underway on the BP Group LinkedIn community - join it here http://bit.ly/eHSEz
Architecture World 2009
iCMG Architecture World conference is focused on IT architecture as a specialty. The key focus areas include understanding of EAF(Enterprise Architecture Frameworks), Model Driven Architecture (MDA), Component based product line, Service-oriented Architecture (SOA), Business Process Management (BPM), ITSM etc. which are key for the End-User Companies for reducing IT costs, ensuring system longevity and enhancing productivity.
IT Architecture is getting recognized as a critical element for realizing practical vision of the IT system for Fortune 2000 companies. With the rapid pace of change today... iCMG Architecture World '09 - Architecture for Business Innovation & Risk Mitigation http://bit.ly/R0imJ
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