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

From the desk of James Dodkins:In the first article in this four part theme we reviewed ‘Understand andapplying Process diagnostics’. We now move our attention to the second  waywe can rethink process forever –

Identify and aligning to Successful Customer Outcomes“Businesses can be very sloppy about deciding which customers to seek outand 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 itseems. The ultimate customer for any profit making enterprise is the person,or company who provides the revenue by purchasing the products or serviceswe produce. It is a matter of fact that in our inside-out legacy world wehave created multiple customer-supplier relationships which include internalservice¹ providers such as Information Services, Human Resources and so on.In mature Outside-In organizations the internal customer ceases to exist aswe progressively partner to align to Successful Customer Outcomes andartifacts such as Service Level Agreements become a thing of the past.

II.    What is the Customers current expectation?The 2006 book ³Customer Expectation Management ³ Schurter/Towers reviewed indetail the of creating and managing customer expectations and how throughclear articulation companies such as Virgin Mobile in the US redefine theirmarket place. In the context of the SCO map we need to understand thecustomers (as identified in the answer to question 1) current expectation.This often reveals both a challenge and opportunity. Customers will tell itas it is, for instance in an insurance claim process ³I expect it is goingto take weeks, with lots of paperwork and many phone calls². That shouldtell you the current service is most likely poor and fraught with problems,delays and expensive to manage however this presents the opportunity. Ifthat is a market condition (all insurance claims are like this) then movingto 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. Thereforeinsurance claims are dealt with by an insurance claims department. CustomerRetention is the baby of you guessed it, the Customer retention departmentand marketing is done by the marketing people. This split of responsibilityis a legacy of functional specialization created by relating to business asa production line. Adam Smith wrote in The Wealth of Nations¹ (1776) of anEnglish pin factory.  He described the production of a pin in the followingway: ²One man draws out the wire, another straightens it, a third cuts it, afourth points it, a fifth grinds it at the top for receiving the head: tomake the head requires two or three distinct operations: to put it on is aparticular business, to whiten the pins is another … and the importantbusiness of making a pin is, in this manner, divided into about eighteendistinct operations, which in some manufactories are all performed bydistinct hands, though in others the same man will sometime perform two orthree of them². The result of labor division in Smith¹s example resulted inproductivity increasing by 240 fold. i.e. that the same number of workersmade 240 times as many pins as they had been producing before theintroduction of labor division. The insights form Smith underpinned theindustrial revolution however using this principle to organise ourselves inthe 21st century is to a very large part the wrong approach. That isprecisely what the answer to the question will tell us ­ ³sorry sir you aretalking to the wrong department, let me transfer you². Or even getting stuckin automated response system hell ³press 1 for this, 2 for that, 3 for theother and 4 if you have missed the first three options.² These are featuresof the labor division mindset. Ask a customer what process they think theyare 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 sensibleto receive service or indeed buy products. Relating back to the insuranceclaim we can see rules and procedure around how to make claims, the correctway to complete forms, the process of collating the information, thetimeframes 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 thepast however they may no longer be relevant.

The situation is compounded by the way internal functional specialism focuson project objectives. Richard Prebble, a respected New Zealand politicianwrites in his 1996 book ³I¹ve been thinking² of the inability oforganizations to think clearly of the amount of work they create and in fact³they spend a million to save a thousand every time².His story of the challenge within large organizations is typical “The PostOffice told me they were having terrible problems tracking telephone lines… They found an excellent program in Sweden which the Swedes were preparedto sell them for $2m …. So the managers decided to budget $1m fortranslating into English and another $1m for contingencies. But, as thegeneral manager explained, it had turned out to be more expensive than thecontingency 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 program?” I asked “How can we cancel a program thathas cost $37m?” they asked   “Do you believe the program will ever work?” Iasked “No, not properly” “Then write me a letter recommending itscancellation and I will sign it” The relief was visible. I signed theletter, but I knew I needed new managers.”

This type of inside-out thinking causes companies to create apparentlysensible checks and controls within processes that actually manifest ascustomer inconvenience, cost and delay. Are you making the customers liveseasier, simpler and more successful?

V.    The Successful Customer Outcome ­ what does the customer really needfrom us?At this point we should have enough information to objectively createseveral statements that articulate the SCO. These statements should bespecific, measurable, attainable, relevant and time-bound (SMART). Usuallythere will 6-10 such statements which become the actual key performancemeasures as move the process Outside-In. For example a North Americanbusiness school completed the SCO map and created these statements from thecustomer perspective for an Education loan application¹ process:

a.    I need to receive my financial assistanceb.    I need to receive aid before the semester startsc.    I need to attend the classes I have chosend.    I do not want to call to chase progresse.    I need to receive the correct amountf.    I do not want to have to fix your mistakes

There is no ambiguity here and we avoid a common mistake of using managementweasel words such as efficient, effective, timely¹ which may mean thingsinternally but to a customer are of little help. Creating SCO statementsthat may be used as measures for process success is a key aid on the journeyto Outside-In.

VI.    And now we reach the core of the onion. What is the one linestatement that best articulates our Successful Customer Outcome? This one-liner embodies the very nature of the process and sometimes the businesswe are in. In Thrive- how to succeed in the Age of the Customer¹McGregor/Towers (2005), Easyjet (Europe¹s second largest airline) is used asan example in this quest. Their simple ³Bums on Seats² SCO sentence worksboth from a company perspective (we must maximize utilization, offerinexpensive seats, get people comfortably and safely to their destinations)and the customers needs  ³I need a cheap safe seat to get me to the sunshinequickly without a fuss².

The company one liner will become part of a series which are measureablethrough the SCO statements and can be tested and revised depending onevolving customer expectations and needs. It may in fact ultimately replacethe inside-out strategic process and provide the organisation with itsRaison d’être.

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

In the third part of this four part series we will review “Re-frame wherethe process starts and ends”

The post Part 2 of 4: There are four distinctly Outside-In ways that you can rethink process and in doing so achieve Triple Crown benefits. first appeared on CX Obsession - for Process & Experience Professionals.

The post Part 2 of 4: There are four distinctly Outside-In ways that you can rethink process and in doing so achieve Triple Crown benefits. appeared first on CX Obsession - for Process & Experience Professionals.