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Business Transformation - Are you onboard?

Synopsis
The world of business is undergoing dramatic change. Driven by a number of factors organizations are needing to realign themselves to adapt and evolve. This transformation is global and reaches into every business sector impacting how companies create, deliver and sustain their products and services.

This three part article introduces the reasons for the change, the size of the challenge and how some world leading trend setter companies are achieving dramatic success in this new order.

| Part 1 | Part 2 | Part 3 |

The current challenge

Almost without exception anyone in business these days learned their trade during the Information Age which arrived with the advent of mainframe computers in the 1960’s. The transformation of the way work, especially in services industries, was radical and gave birth to new ways of doing things that had remained largely unchanged since the invention of the steam engine. Alongside this information revolution a change came about in the way we organized business in order to exploit the advantages offered by automation. People talked of software and hardware; information systems; bits and bytes; system development; data processing. In fact this new way of doing work influenced every aspect of our lives and we adopted a predominantly a left brain structured approach to organizing ourselves.
The very way we designed work became dominated by ‘structured approaches’ for systems development and management. Subsequently this information age mindset grew its influence into work areas such as human resources, sales and marketing, operations and all the other ‘functional areas’ we are now very familiar with. The specialists in each of these respective functions, take Accounting for example, thought of their world through a lens provided by the information Age which ensured a structured methodical approach to change that would indeed harness the power of computers.
Everything became information centric. Think about this for a moment. What is the language you use in your particular discipline? For instance in Financial Management the talk may be of Activity Based Management systems, Budgetary control, Accounts reconciliation, purchasing, Cost Codes and such. All these things are underpinned by ‘systems’ and we draw structures that represent information processing. Companies like Oracle and SAP prosper in helping companies understand these functional controls and databases.

The things we do as work can also be represented as processes and these are conceived, developed and distributed through the information age lens. Swim lanes, functional hierarchies, business process management systems, process modeling languages and much more. Where has this all taken us? To put it bluntly away from the customer who is, let’s not forget, the very reason why our businesses exist in the first place. If you are involved in creating processes or systems think about the designs you produce.

CustomerInTheMiddle

Where is the customer in those ’pictures’ and designs? Customers are frequently an afterthought and at best at the ‘beginning’ or the ‘end’ of a process. We draw organization models as pyramids and talk about the ‘front line’, interestingly customers are usually placed at the foot of the organizational pyramid. Our very ways of thinking isolate us from the customer and many can pretty much carry on with their functional objectives often without even thinking of the real customer as anymore than something at the beginning or the end – nothing to do with them.

Where we have taken time to think about customers we have created ‘Customer Relationship Management (CRM) systems’ which are frequently islands of automation not fully integrated with back-offices – what is that the ‘back office’? Groups of people remote from the customer, processing information and occasionally needing to deal with other parts of the organization. Sometimes the apparent disconnects between different functional areas result in another initiative to ‘outsource’ work that is regarded as not being part of a core competence.
Customers then end up talking to remote people sitting on the other side of the planet with mixed results.

Some people may argue that they do in fact deal with customers – those internal counterparts in other functions. We establish customer-supplier relationships, negotiate Service Level Agreements and busy ourselves with negotiations and agreed targets. Competition for scarce resources is the name of the game as we go into the annual round of bidding and corporate in fighting. Sounds familiar? Well you are not alone as this is the way of the Information Age mindset.

Work has become so complex with the interconnection between people and systems that we seem constantly to be reinventing projects to ‘sort the mess’ out however our efforts are stilted by this very complexity with unfulfilled promises of new systems and improved ways of working. It just gets even more complicated.

The is a New Way -

The Unified Theory of Business

Customer Expectation Management is a business framework and system for creating and sustaining successful organizations. It’s central tenet is that all organizations should be built and designed ‘outside-in’ with a focus to achieving Successful Customer Outcomes.

In industry and business no one invents anything completely new. Rather people see how existing ideas fit into new frameworks. The components of a new idea are usually floating around in the milieu of business research and discourse prior to its discovery. What is new is the packaging of these components into a cohesive whole.

Similarly the idea that all business should be oriented to achieve Successful Customer Outcomes and ‘Outside-In’ is not entirely new. It has been floating around in various forms for some time. But is has not yet assumed its rightful position at the centre of business theory and practice.

Ironically some of the pioneers, both business leaders and theorists, of ‘Outside-in’ thinking and practice had a notion of how best to align businesses to achieve success. In 1985 Paul Strassman in

’Information Payoff The Transformation of Work in the Information Age’ discussed how information technology changes the very nature of work and why we do it …. he didn’t use the words Successful Customer Outcomes or Outside-In but he was thinking along the same lines.

Since the mid 1980’s, terms such as customer centric, business process management and the agile organization, have grabbed the minds of business leaders and academics alike. They all refer to related ideas. For example, in 1993 Hammer and Champy in their book ‘Reengineering the Corporation’ proclaimed the need to ‘start over’ and rethink the way work is done. Writers and Consultants such as Charles Handy , the leading European authority, academics Kaplan & Norton , author Peter Fingar , Dr. Tom Davenport and many more of written, theorized and in some cases pointed out the pivotal role of the Customer for all organizations.

What has been lacking is putting these disparate ideas into a coherent and practical framework. This I argue has not been done before and is precisely what Customer Expectation Management (CEM) is all about. While successful ‘outside-in’ organizations may not explicitly call their approaches CEM the principles, methods and application are there and accessible by others.

In Part Two we will ‘look into’ some of these success stories including Virgin, South West, Best Buy, Citibank, FedEx Kinko, Zara plus others and examine emerging best practice and its implications for everyone.
Steve's signature

If you wish to explore the subject further immediately you can:

Download the Customer Expectation Management Toolkits (there's six)

Join us at one of our mentoring & professional coaching sessions

and qualify as a Certifed Process Professional®

Review Steve's fifth book

"Outside-In The Secret of the 21st century leading companies"

http://bit.ly/OutsideInTheSecret

References:
| Part 1 | Part 2 | Part 3 |

Successful Customer Outcomes (SCO’s)

Charles Handy – The Empty Raincoat (1995)

Kaplan & Norton – The Balanced Scorecard (1996) and Strategy Maps (2003)

Peter Fingar – BPM The Third Wave (2003), Extreme Competition (2005)

Tom Davenport – Process Innovation (1992)

About the Author

Steve Towers, Co-founder and Chair of the BP Group (www.bpgroup.org) and founder of Towers Associates, is an expert on process and performance transformation.

Steve founded the first community focused on business process management in 1992.

Steve has bases in Europe and Colorado.
Meet Steve at http://www.bpgroup.org/bp-group.html

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