Hey – I’ve been through this entirely too many times. At the start of the relationship marketing movement; when B2B database marketing got serious; when “micromarketing” started; with TOC (Theory-of-Constraints); and in spades with CRM. All sure bets practitioners could take to the bank. All supposed slam-dunks coopted by parochial economic interests – whether by advertising agencies, media outlets, Six Sigma & Lean, CRM software companies, etc.. Looking back on this history makes me fear O-I is ready for a face-plant.

We’re hearing too much ungrounded exuberance, too many excessive claims, too many ungounded predictions about O-I. And saying that market conditions will force business to go Outside-In  ignores history. Let’s face it straight up. O-I will succede if we make it sufficiently attractive to companies, not because the market “forces” companies to go O-I. And accomplishing this will require much more from the O-I community than the community’s yet prepared to give.

We’re changing market phases now from “Innovators” to “Early Adopters.” To get there, we have to do more than prosletyzing the O-I concept. And to reach some of the penetration levels O-I aspires to, we’re going to have to move on to “Early Majority” clients – which will require an execution level the movement’s not yet close to.

To get O-I into the meat of the marketplace, I believe we have to accomplish four, difficult tasks:

1. Do it right:  Migrating from inside out to Outside-In is a three-step journey: a.) aligning strategy to customers (which requires finely honed planning skills); b.) aligning process to strategy (which we’re best at); and c.) aligning technology to process (which the movement often ignores). Sure we can accomplish quick wins with process change or a customer experience initiative - provided the company already leans O-I, like Best-Buy, Fed-X, Trader Joe’s and USAA . But delivering Outside-In enterprise-wide, to its fullest capabilities requires all three alignment elements, not just one.

2.  Train O-I practitioners across the alignment spectrum:  We have lots of O-I practitioners trained in aligning process to customer strategies. Almost none trained in aligning strategies to customers. And way fewer trained in aligning technology with process. We need to provide training in all aspects of O-I. We’re not doing it.

3.  Focus on the steak. not the sizzle:  It’s easy to toss off claims that O-I is the greatest thing since sliced white bread. It’s another thing to make it work. And making it work in organizations not already O-I of their own volition demands properly and persuasively framing the long-term benefits of the inevitable organizational change required to migrate to O-I, rather than pumping the bellows. We need to stop discounting organizational change requirements and start confidently justifying them.

4.  Over-deliver instead of overpromising:  Overselling sweeping, non-specific benefits or offering growth, profitability or expense-reduction bromides hurts Outside-In in the long run. Face it, helping clients achieve broad-based O-I success requires a “grind it out” mentality. We create value incrementally, step-by-step. Enterprise-wide, O-I does not create whopping revenue gains, profitability gains or expense reductions in a flash – or even a year. Double-digit improvements? Very often. But not quantum leaps. Puffery destroys credibility. Remember, our clients are customers. Overselling them on the benefits of Outside-In is very inside-out.

Outside-In has cleared the “Innovator” phase. But we’ll need to change what we say and what we deliver to make substantive progress penetrating the “Early Adopter” segment of companies. And then we’ll have to make even more dramatic changes to enter the mainstream and penetrate the “Early Majority.” As a community, I believe we have a whole lot of hard work ahead of us before we can  bring Outside-In to the corporate masses. Are we ready?

What do you believe?

When business conditions and contexts change in ways that require significant professional adaptation, most managers go in one of two directions, with a small minority taking a third path:

1.  DISPUTE:  They acknowledge change but claim their training & skill sets are immutable. What worked before will work in the future (with enhancements). We’re already there” is a common line of defense.
2. DENY:  They ignore change, believing their environment is immutable. “Process works by a fundamental set of rules and always will” is a catch phrase.
3. ACCEPT:  In early stages of change, a minority comprehend that neither their skill sets nor their work environments are immutable, and they can’t be married to anything but success.

 Why is this question relevant? Fundamental economic changes, demographic changes, technology advancements and globalization together have radically changed our business environment―with buyers big winners and sellers both short- and long-term losers. Consequently, business is fast losing its ability to act independently of customers, and customers are more and more proactive in demanding business be done “their way.”

Process: 

 Process, which creates perhaps 80% of customer experience, must respond. Not by being nice to customers. Not by trying to give them most of what they’re asking for. But more fundamentally by letting customers drive the “what,” “who,” and “how” of process design, just as they’re already starting to drive business strategies. Outside-In Process is the first significant process response to change. Others may come along. But regardless of where process people go, they need to go “somewhere else,” and soon.

Marketing:

The new emphasis on customer experience discounts the importance of  creativity, promotional communication (including promotional branding), customer analytics (including databases) and lots of other traditional marketing stuff. Hence, lots of marketrs will have to leave their comfort zones before their comfort zones leave them. Outside-In overall, which fuses customer-centric planning with process design, is one escape route. There may be others. But marketers too need to act fast to avoid being very dis-comforted.

Which path will you take? 

Will you dispute? Deny? Or adapt?

Okay, I pulled 2% out of the sky. But at least I was generous!

Company after company tries to “get closer to customers” by taking incremental routes. And company after company fails to accomplish much permanent change (and often not much temporary change).

But is business paying attention to these bad outcomes? Nope. In fact, reminds me of a true, “you betcha” Minnesota story. A flock of domestic turkeys (who can drown in a rainstorm) were standing in a feedlot when a downpour started. The leader marched right up a running auger to hide, only to become cornmeal additive. Then, the rest of the flock followed.

 Found any feathers in your cornbread lately?

 Seriously, what’s up? Lack of education? Wishful thinking? A “we can beat the odds” mentality? Not really wanting to become customer-centric but wanting to claim it? Other?

 I’m polling for answers on Linkedin, but I’ll share my best hunch. None of the above. Instead of these possibilities, I sense that most C-level execs think of “process” as a means to save money. They’re unaware of the consequences of either good or bad process on revenue. So they fail to associate “process” with “customer.”

Perhaps the only remedy is an increasing number of smart execs and companies creating new, customer-centric strategies then successfully reedesigning process to align with strategies and execute them. That’s the formula for improving customer experience and delivering new value to customers. And that could raise the question from not as smart execs, “What are they doing that we’re not?”

In his great new Book, “Reorganize for Resilience,” Harvard B-School Professor Ranjay Gulati describes how and why companies should be moving from inside-out to Outside-In (he uses Outside-In as a surrogate term for customer-centricity). From his organizational dynamics perspective, he describes four “stages” of this transition. But most marketers aren’t trying to reach the end stage or even the third, but instead are content with stages one or two. Why?

[I’m excerpting from Gulani’s descriptions]

Stage one: Thoroughly inside-out: “(Companies) view the world entirely through the lens of their own goods and services.”

Stage two: Think they’re customer-centric but remain company-centric: “Though they (companies) understand customer needs, they still focus on their products, viewing the customer through the lens of the company’s offerings, focusing on customers’ experience with their purchase while ignoring the larger problems customers may be trying to solve.”

Stage three: Think they’re customer-centric and they are, but not all the way: “They focus first on the problems their customers are trying to solve, only then turn to their products, configuring their offerings to address those problems.”

Stage four: Outside-In (customer-centric) to the core: “A level four firm is more attached to producing solutions to those problems than it is to the products and services it offers. This intellectual, structural and emotional transition means it is no longer concerned whether the inputs it uses to solve customers’ problems are its own or assembled through a network of partners.”

What stage does your marketing support?

Calling corporate customer-centric planning deficient is paying it a big compliment. From Fortune companies to entrepreneurial businesses, and our practice spans both, well under 10% of companies understand even the most rudimentary techniques for letting customers drive the strategic equation, and the true number may be less than 5%. Senior managements at the remaining 90 – 95% plus:

a.) Want to become more customer-centric, but can’t find their way out of traditional, company-centric planning approaches
b.) Are still playing the we-them power game
c.) Let financial planning drive their companies
d.) Are content to spout lots of “customer-this, customer that” bromides
e.) Believe letting middle management implement CRM or CEM or Social CRM or whatever new fad is out there will get them close enough to customers?

Unfortunately, customer-centricity starts with aligning strategies with customers through effective customer-centric planning processes – before it moves through aligning process with strategies and technology with process. Lacking well thought-out, customer-responsive business strategies, companies can’t move off the dime in customer-centricity terms – unless their CEO is Jeff Bezos, Fred Smith, Richard Branson, Steve Jobs or someone else with customer-centricity so baked in their brain they can skip planning and go straight to execution.

Why do we have this problem and what should we do about it?