Steve Towers

Every Customer Interaction is a Moment of Truth (MOT). Whether it’s person to person, person to system, system to person, system to system or person to product they are all Causes of Work.

That work in dealing with MOT’s creates internal handoffs, these are Breakpoints. Places where things can and do go wrong and we see them happening between people, systems and services all the time.

All our internal communications are in fact Breakpoints. For instance how many emails do you receive from colleagues and business partners daily? How many calls do you have to make to get the job done? How many ‘systems’ do you work with?

According to US research firm The Radicati Group, individual workers sent an average of 37 e-mails a day in 2006 with predictions this will rise to 47 by the end of this year.

A further study conducted by researchers at the Universities of Glasgow and Paisley in Scotland found that one third of users felt overloaded and stressed by the heavy volume of e-mail they had to deal with.

When e-mail behaviour was tracked it is was found that many were checking their inbox as often as 30 to 40 times per hour.
"There was a mismatch between how often people thought they looked at their inbox and how often they actually did it," said Mario Hare, a lecturer at the University of Paisley.

With those facts in mind Intel has become the latest in an increasingly long line of companies to launch a so-called ‘no e-mail day’.

On Fridays, 150 of its engineers revert to more old-fashioned means of communication. Engineers are encouraged to talk to each other face to face or pick up the phone rather than rely on e-mail. In Intel’s case the push to examine breakpoints followed a comment from chief executive Paul Otellini criticising engineers "who sit two cubicles apart sending an e-mail rather than get up and talk".

Energy-draining monster

I am not convinced that switching e-mail off is the answer to stress and lack of productivity in the office. We really need to get to grip with the causes of work – the Moments of Truth and begin to engineer those away. Back as far as the 1980’s Jan Carlson at Scandinavian Airlines realised that and drove out lots of wasteful time consuming activity which in turn result in lots of ineffective and needless internal communication.

Alan Elliot, director of business development of e-mail specialists Mirapoint agrees and says "Depicting e-mail as some kind of resource-draining monster that we’d all be better off without wilfully ignores the realities of the modern business world."

By truly fixing the Causes of Work, rather than messing around with the Effects (a bit like moving the chairs on the deck of the Titanic) we will all find our customers and employees life simpler, easier and more successful.

So how many Causes of Work have you eradicated today?

About the Author

Steve Towers, Co-founder and Chair of BP Group (www.bpgroup.org), 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 (UK), New York and Colorado.

Steve Towers

Synopsis

In the previous articles we have reviewed the global business transformation underway and how Advanced BPM is helping notable organizations assert their leadership. In this final article we’ll look at the ingredients of success and ten best practice ‘how to’s’ to deliver the transformation.

Thisthird of a three part article reviews how world leading trend setter companies are achieving dramatic success with an ‘ouside in’ approach.

Steve Towers

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.

Thisthree 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.

Synopsis

In PartOne of this three part article we reviewed the factors driving transformational change and how the old ‘inside-out’ approach to business is about as useful as a steam engine in getting to the moon.

In Part two we’ll look at how some of the world leading trend setter companies are embracing the new outside-in challenge and creating new powerful business models driven by advanced forms of BPM such as the Customer Expectation Management Method (CEMMethod®).

Thissecond of a three part article the size of the challenge and how some world leading trend setter companies are achieving dramatic success in this new order.

Steve Towers

It’s a confusing world out there. At the last count there were over 6,000 improvement methodologies (Wikipedia) all geared to helping organizations get better at business. So at least there’s always been plenty of choice depending on your particular flavor of the month however one has to ask the question why so many and why do even the better ones fail to help our companies adapt and change?

Regular readers of our stuff will know we can be quite outspoken on this matter, and it’s best summed up by the phrase “you may be doing things right, but are you doing the right thing?”. The vast majority of techniques, approaches and methods are geared to fixing problems, and essentially getting better at doing things right. That’s fine in the 20th century world where efficiency was king. Not so anymore where effectiveness and efficiency are pre-requisites for business success. Just getting better at what you currently do (doing things right) is the route of diminishing returns. The harder we try, the tighter we get, the poorer the gain each time around.

Let’s contrast that with doing the right thing. Here we seek to determine what the right thing is, and in our language it centers on Successful Customer Outcomes (SCOs). And that isn’t about (just) filling forms correctly, tightening bolts or producing widgets. It is a philosophy that seeks to improve our alignment in everything we do towards the SCO. It is geared to understanding Causes rather than fixing effects, and unfortunately again so much of what is called ‘improvement’ is about fixing effects, rather than flushing out the Cause of Work (COW) and the Points of failure (POF).

The approach we have distilled from global leading companies, which we call Customer Expectation Management Method (CEMM), has a set of principles and philosophy that makes sure everything you do improves the SCO. CEMM helps an organization bring their processes, systems, strategy and people into ‘outside-in’ alignment.

Does CEMM work? Absolutely and that’s precisely what allows those leading companies to carry on creating clear water between themselves and the nearest ‘inside-out’ rivals.

So how could we compare the recent emergence of CEMM with less effective approaches like Six Sigma and Lean? Easy..

Six Sigma – Fixing problems. Doing Things Right.
For example people may not be filling in a form correctly. Six Sigma understands how often, where and what could be done to improve accuracy of the form.

Lean – Doing Things Right, and sometimes doing the Right Thing.
Similar to Six Sigma however goes a stage further in removing waste associated with form completion by removing unnecessary steps and sometimes as a consequence negates the need for a form entirely. In doing so occasionally, but not by design, stumbles into doing the right thing.

Both Six Sigma and Lean don’t challenge directly whether the form helps to achieve an SCO. Conversely,

CEMM – Doing the Right Thing. Doing it Right, doing it even Better.
Asks whether the form contributes to the achievement of the SCO. If it doesn’t we stop doing this dumb stuff. It is typical to find that a massive amount of work in a CEMM examined process becomes unnecessary and in doing so frees up scarce resource.

The good news is that those ‘outside-in’ success stories can help all of us embrace the SCO and identify and achieve immediate substantive triple crown benefits for our organizations.

Terms used in this article:

CEM – Customer Expectation Management
CEMM – Customer Expectation Management Method
SCOs – Successful Customer Outcomes
COWs – Causes of Work
POFs – Points of Failure
Triple Crown – Concurrently Improving Revenues, Enhancing Service and Reducing Costs.
Inside-Out – viewing the organization as a self sustaining functional enterprise focused on silo based specialism
Outside-In – understanding and living an approach that recognizes the only reason an organization exists is to deliver SCOs. In doing so achieving Triple Crown benefits which benefit the Customer, the companies employees and the shareholders.

What is your SCO and how aligned is your organization to achieving it?
Take the SCO test FREE here.

About the Author

Steve Towers, Co-founder and Chair of BP Group 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 (UK), New York and Colorado.

Meet Steve at http://www.towersassociates.com/SBT_services.html#upcoming

(c) BPGroup 1992-2011

By Steve Towers The original creators and advocates of Six Sigma, General Electric and Motorola (they even have their own University for Six Sigma!) are having a tough time. Compare them to ‘outside-in’ companies such as Apple (AAPL) and Southwest (LUV) airlines (58 quarters of successive profits) the contrast is stark. Investing $100 in July 2007 would have grown to $138 with Apple and shrunk to a paltry $40 with Motorola (MOT). General Electric are down a stomach churning $25 on the year. Customers and markets are making their choice everyday and the corresponding strategic decisions made in terms of business improvement have a direct impact on cost, revenue and service performance. How successful are your Process Improvement programs? There are those who would say, and I quote Alberto Manuel, at FPAS – Industrias Metalurgicas – SA "When initially Steve Towers published (this) article he tried to demonstrate that companies such as Motorola that had embraced the six sigma had disastrous results with regard to shares price, and therefore that was the proof this approach was obsolete, I think he forgot that the company’s failure was related to the inability to launch products whose features that consumers wanted, particularly after RZR model." (BPGroup – Linkedin ) I would respond that it is precisely because companies such as Motorola’s have a fixation of ‘doing things right’ rather the focus on ‘doing the right things’ is at the root of their failure. Six Sigma and Lean are both culpable in causing organisations to encourage efficiency of potentially dumb work, despite the potential clear disconnect between that work and delivering good product and service. The Fourth Wave of Process Management (see Article) shows an evolution with guys like GE’s new CEO Jeff Immelt now beginning to embrace more comprehensive and appropriate approaches. Perhaps those of us intent on flogging the horse called Six Sigma should reflect… you may be doing things right but are you doing the Right Thing? Investigate how to go ‘outside-in’ – Articles on this theme Gain the skills, access the techniques – Open training now About the Author Steve Towers, CEO and BPGroup founder. 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 (UK), Texas and Colorado. Meet Steve at http://www.towersassociates.com/SBT_services.html#upcoming

(c) BPGroup 1992-2011

The last three decades have seen a gradual refinement of management thinking and practice to now present a strategic choice for organizations. The route people take should be determined by the place companies find themselves in, the place they would like to get to and the speed with which they need to move. Unfortunately all too often companies are choosing inappropriate methods and tools, investing large amounts of money in dubious technologies and training their people in techniques already proven suspect in the last century. Why is this so?

Confucius said “Knowing the right thing and not doing it is the ultimate cowardice”. None more so in the current business climate where political and shareholder pressure has resulted in extreme short–termism. It is estimated that the average tenure of the CEO in the 21st century is less than three years and accordingly results need demonstrating in quick-time. Senior executives faced with this kind of pressure will often revert to what they think they know best. It is a popular military axiom that the generals in the face of battle will fight the last war again, despite improvements in machinery and capability. History is littered with examples of such failures and it seems in business some CEO’s are just as culpable. Witness the recent statements from one CEO of a top three American airline commenting that their industry (airlines) was really not profitable anymore and at best they are striving for a social service for the best part? Contrast that with South West airlines and 57 quarters of successive profit.

Similar comments from the financial service, retailing, pharmaceutical and petroleum industries appear in the press ever-day. And yet those companies like South West continue to buck the trend and achieve double digit growth consistently. Delivering the Triple Crown is a way of life for these companies and interestingly the formula for this success is not difficult to understand.

So back to the myriad of different approaches and how they compare. There is in fact a means of understanding which one to choose and what size of benefit may result from the effective implementation of the correct choice. In terms of timeline the evolution from acknowledging processes to fully exploiting those covers the best part of thirty years. During this time practical experience of the different forms of business improvement has resulted in a range of approaches that can help us determine how best to make our companies more successful. In the ultimate form the emergence of Customer Expectation Management in the last two years produces a formula that embraces and suits current business challenges. A range of industry leading companies have emerged who consistently achieve Triple Crown plus performance some of their approaches are discussed in our book on this theme.

To better understand the ontology of Business Process Excellence we have produced the following chart. Explanations of each approach are provided in part by Wikipedia.

Figure 1: Approaches for Improving Business Performance
(Research of 800+ organizations, BP Group (www.bpgroup.org) 2006-7)

Total Quality Management (TQM)

is a management strategy aimed at embedding awareness of quality in all organizational processes. TQM has been widely used in manufacturing, education, government, and service industries, as well as NASA space and science programs.
Total Quality provides an umbrella under which everyone in the organization can strive and create customer satisfaction at continually lower real costs.

Business Process Improvement (BPI)
is a systematic approach to help any organization make significant changes in the way it does business. The organization may be a for-profit business, a non-profit organization, a government agency, or any other ongoing concern.
BPI works by:

Defining the organization’s strategic goals and purposes
(Who are we, what do we do, and why do we do it?)

Determining the organization’s customers (or stakeholders)
(Who do we serve?)

Aligning the business processes to realize the organization’s goals
(How do we do it better?)

The goal of BPI is a radical change in the performance of an organization, rather than a series of incremental changes (compare TQM). Michael Hammer and James Champy popularized this radical model in their book ‘’Reengineering the Corporation: A Manifesto for Business Revolution’’ (1993). Hammer and Champy stated that the process was not meant to impose trivial changes, such as 10 percent improvements or 20 percent cost reductions, but was meant to be revolutionary (see breakthrough solution).
Unfortunately, many businesses in the 1990s used the phrase “reengineering” as a euphemism for layoffs. Other organizations did not make radical changes in their business processes, did not make significant gains, and wrote the process off as a failure. Yet others have found that BPI is a valuable tool in a process of gradual change to a business.

Six Sigma
is a set of practices originally developed by Motorola to systematically improve processes by eliminating defects. A defect is defined as nonconformity of a product or service to its specifications.
While the particulars of the methodology were originally formulated by Bill Smith at Motorola in 1986,
Six Sigma was heavily inspired by six preceding decades of quality improvement methodologies such as quality control, TQM, and Zero Defects. Like its predecessors, Six Sigma asserts the following:
Continuous efforts to reduce variation in process outputs is key to business success
Manufacturing and business processes can be measured, analyzed, improved and controlled
Succeeding at achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management
The term “Six Sigma” refers to the ability of highly capable processes to produce output within specification. In particular, processes that operate with six sigma quality produce at defect levels below 3.4 defects per (one) million opportunities (DPMO).
Six Sigma’s implicit goal is to improve all processes to that level of quality or better.

The Lean Approach
is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product.
The Lean Approach is a generic process management philosophy derived mostly from the Toyota Production System (TPS) but also from other sources.
It is renowned for its focus on reduction of the original Toyota ‘seven wastes’ in order to improve overall customer value but has some key new perspectives on how to do this.
Lean is often linked with Six Sigma because of that methodology’s emphasis on reduction of process variation and Toyota’s combined usage (with the TPS).
Toyota’s steady growth from a small player to the most valuable and the biggest car company in the world has focused attention upon how it has achieved this, making “Lean” a hot topic in management science in the first decade of the 21st century.

Business Process Management (BPM)
is the intersection between management and information technology, encompassing methods, techniques and tools to design, enact, control, and analyze operational business processes involving humans, organizations, applications, documents and other sources of information.

The term operational business processes refers to repetitive business processes performed by organizations in the context of their day-to-day operations, as opposed to strategic decision-making processes which are performed by the top-level management of an organization.

BPM differs from business process reengineering, a management approach popular in the 1990s, in that it does not aim at one-off revolutionary changes to business processes, but at their continuous evolution. In addition, BPM usually combines management methods with information technology.

BPM covers activities performed by organizations to manage and, if necessary, to improve their business processes. In short, Business Process Management is a management model that allows the organizations to manage their processes as any other assets and improve and manage them over the period of time.

Customer Expectation Management (CEM)
is an emergent management and business approach with the powerful idea of defining your business, not in terms of the goods and services you provide, but in terms of “customer expectations.” CEM explicitly links corporate strategy down into every niche and corner of the enterprise to ensure that your business sets and meets customer expectations –without exception.

Within CEM everything the organization seeks to achieve should be aligned with achieving Successful Customer Outcomes – anything that doesn’t can be regarded as potentially ‘dumb stuff’ and eliminated.

Organizations implementing CEM approaches can achieve simultaneous reductions in cost, improvements in revenue and enhanced customer service (aka the Triple Crown). Furthermore Regulatory and Compliance requirements may be met and exceededwithouta negative impact on business performance.

Various CEM approaches, such as the CEMMethod(tm), place the customer firmly at the centre of everything an organisation does. This evolving field includes world best 21st century performing companies such as Best Buy, Apple, Gilead Systems, South West Airlines, Zara and Virgin.

The book “Customer Expectation Management – Success with Exception’ (Schurter/Towers 2006) describes the clear and actionable guidelines, along with examples from FedEx, Virgin Mobile, Best Buy and a budget airline, explaining what companies can do to increase the customer pipeline, convert higher percentages of that pipeline to profitability, and extend the duration of the customer relationship where profitability is at its peak.

Reflections on the State of Play
Pressure to perform has never been greater at both a personal and company level. Each of the approaches has merit depending on the challenge faced however in our recent research increasingly the players who dominate their markets, those achieving triple-crown plus, are utilizing approaches and methods falling into the Customer Expectation Management domain.

The original pioneers of earlier approaches e.g. Toyota & Lean, General Electric & Six Sigma, have not stood still. In fact they are now the very companies pushing further and widening the gaps between themselves and rivals through what we have come to know as CEM. Other notable exponents of CEM type approaches include FedEx, Virgin Group, Ryan Air (Europe’s largest airline), Citibank, Zara and Best Buy.

Common themes to note are these companies ‘outside-in’ perspective, their alignment to achieving and exceeding customer expectations, the constant stretch to delivering Successful Customer Outcomes and a relentless focus on business success through reduced costs, improved revenues and enhanced service.

CEM is a natural evolutionary approach and yet remarkable in its ability to produce immediate and significant impact on corporate performance. It is readily embraced and incorporates facets of its predecessors. It is easy to understand at all levels (alignment to achieving Successful Customer Outcomes) and does not require significant technology investment.

About the Author

Steve Towers, CEO and founder of the BP Group (www.bpgroup.org), is an expert on process and performance transformation.
Steve founded the first community focused on business process management in 1992. You can join the BPGroup here. Steve has bases in England and the United States..

(c) BPGroup 1992-2011