Design Thinking Needs Outside In Thinking

Design Thinking Needs Outside In Thinking

With the growth of digital, customer-centricity has two new weapons; Design Thinking and Customer Journey Mapping. Structured thinking-out-of-the-box and standing-in-your-customer’s-shoes operationalizes customer-centric desires. The ability to identify ways-to-wow and points-of-disappointment – critical moments in the customer relationship lifecycle – is raising the average customer experience.

But the brilliance of those doing this work is constrained in organizations with inside-out strategies.

How can that be; that an organization developing and reacting to customer journey maps can be accused of being inside out?

Inside Out Thinking

The validation comes from looking at their vision, mission, strategy, and scorecard.

  • Traditional visions are us-centric, answering ‘Who do we want to be in the future?’
  • Traditional missions are us-centric, answering ‘What do we need to do to get there?’
  • Traditional strategies are us-centric, declaring ‘Our strategy is to innovate new products, so we dominate the market.’
  • Their scorecard defines the company’s success, measuring ‘Grow revenue x%. Increase market share y%. Improve employee engagement by z%.’
  • References to the target customer are generalities. ‘We will be the best supplier to our customer.’ ‘We will bring the best products to our customers and delight them.’ On the other hand, leaders and employees can be precise that ‘We want to grow by 20% next year.’

That is not to say that personnel do not care about their customers and wowing them. But their ability to vividly imagine their future organization overpowers the less tangible Outside In definition of a vision ‘How do I envision life being better for my customer in the future?’ and Outside In mission ‘What is my role in bringing about that better future for my customer?’

Outside In Thinking

Helping leaders and consultants map their company scorecards into the Outside In format, we hear ‘Heck, look at that. We have no goals for our customer value creation. They’re all about us!’ Leadership has general sentiments describing what they want to do for their customers but they don’t quantify them.

If you want to read about Outside In thinking, see Strategy from the Outside In, Prof. George S. Day, Wharton. Tiers 1 to 3 of the Outside In scorecard map to Chapters 1 to 11 and tiers 4 to 7 map to Chapter 12.

Tier 1 identifies the External Stakeholder goals and success indicators. ‘To whom do we desire to bring value and how will we measure whether we achieved that?’ Tier 2 is the Internal Stakeholder set. “What does this need to do for us?” 

A good example of Outside In is i2, the supply chain optimization company. In the ’90’s, their marketing slogan was ‘We are helping industry take $30Bn out of the supply chain. How much do you want?’ They measured what they could do for a company and tracked the savings that use of their software created. It was a clever message and a good example of Outside In before Outside In existed. You can almost see the Tier 1 entry on i2’s corporate scorecard: ‘Reduce customer inventory carrying costs by $30Bn over 5 Years.’ 

It Can Be Done

In i2’s case, they offered a product that mapped easily to a customer-outcomes measure. So how does Outside In work for others? Well, let’s think about an accounting firm that also provides consulting services. The firm’s traditional us-centric Tier 2 goals might include revenue growth, contracts won, and margin growth. For an Outside In Tier 1, the well-meaning but vague ‘Helping our clients thrive.’ might become:

  • Increase the number of our entrepreneurial clients who have successful exits by 30%.
  • Increase the valuation of our clients by 10% over 5 years.
  • Increase the number of firms we help avoid bankruptcy and are still viable 5 years later by 25%’.

It is impractical to define explicit targets for every customer on the company scorecard. It is viable, though, to develop a set of measures applicable to the market, with targets which would illustrate a positive impact on customers through the use of the company’s products and services.

Recently, a group of CEO’s gathered to form an industry alliance. Their consultant using Advanced Management Consulting challenged them to define success at Tier 1. “How will your collaboration bring value to your customers?” It was a slow start. They said that thinking about their purpose and reason to exist, at this level, was ‘hard work’ and caused their ‘brains to hurt.’ But once the bag of popcorn started to pop, the measures flowed.

Now, imagine taking this level of customer-centric strategy definition and goal-setting, and operationalize it through design thinking and customer journey mapping. In a world where, these days, the transformation label is slapped on any corporate project, that can be transformational.

Learn How

To see examples of traditional strategies and scorecards converted to Outside In, join our webinar at 12pm EST on March 15th. Click here to register.

If you are a business leader or manager, bring along your organization’s vision, mission, strategy, and scorecard. Follow along and do the mapping. Or send it to us, and we’ll map it for you.

If you are a management consultant, bring your firm’s strategy and scorecard, or a client’s that you helped them create, and do the mapping.

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