OutsideIn Perspectives Maintaining an outsidein perspective best practices

Outside-In Perspectives: Maintaining an outside-in perspective – best practices in staying current with market trends Dr. Dale S. Rogers Nevada Logistics Institute Reno, NV 11 August 2015 A. T. Kearney 82/7478 1

Outside-In Perspective Overview n Having an inside-out perspective n Developing and maintaining an outside-in perspective n Extending the outside-in perspective 2

HAVING AN INSIDE-OUT PERSPECTIVE Impact of an internal focus without external understanding 3

Peter Drucker – The Practice of Management “It is the customer who determines what a business is. For it is the customer, and he alone, who through being willing to pay for a good or for a service, converts economic resources in the wealth, things into goods. ” Source: Peter Drucker (1954). The Practice of Management “If we want to know what a business is we have to start with its purpose…There is only one valid definition of business purpose: to create a customer. ” Source: Peter Drucker (1954). The Practice of Management 4

Inside-Out Perspective “We've been inside-out for over 100 years. Forcing everything around the outside-in perspective will change the game. ” Source: Jack Welch, Former CEO of General Electric 5

1972 Honda 6

Evolution Oldsmobile Main Plant, Summer 2011, Lansing, Michigan 7

Digital Equipment Corporation 8

Burroughs Calculating Machines § Over 5, 000 parts, with as many as 2000 moving together at any one time. § Most technologically advanced calculator of its time § Price comparable to that of a new car. Class 3 - 1911 -1929 § Options such as nonadd, non-print, and 9

DEVELOPING AND MAINTAINING AN OUTSIDE-IN PERSPECTIVE Embracing an external understanding 10

Structure Drives Behavior n Structure determines behavior n Behavior does not determine structure 11 11

Constituents 12

Outside-In Perspective n Successful companies often suffer from the “Not Invented Here (NIH)” syndrome n A key way to break out of this is to look at the firm from the perspective of customers and potential customers n Making sure that strategies and actions are chosen and implemented from a strong external perspective 13

Coca-Cola Non-Carbonated Beverages 14

EXTENDING THE OUTSIDE-IN PERSPECTIVE Customers in complex supply networks 15

Complex Supply Networks 16

Attenuation n Attenuation is a decrease in signal strength during transmission. n Attenuation is the opposite of amplification, and is normal when a signal is sent from one point to another. n If the signal attenuates too much, it becomes unintelligible, which is why most networks require repeaters at regular intervals. 17

Customers? Customer needs? Customer alignment with organization? Do customers want to satisfy needs? How badly? Customer communication processes & needs? Customer perception of benefits? Customer knowledge & awareness? Customer conversion costs? Customer buying processes? Customer information sources? 18

Outside-In Discipline Customer Pictures Marketplace Opportunitie s Analytical Rigor 19

Strategy Management Translate the Strategy Update the strategy Review the strategy Manage strategic initiatives Communicate the strategy 20

Vantage Points Finance View Supplier View Operations View Competition View Complete Customer Order Fulfillment Customer View Partner View 5 21

Dual Perspectives n Inside-out perspective • Internal benchmarking n Outside-in perspective • External benchmarking • Voice of the customer 22

Concluding Thoughts Stimulate Progress Preserve the core 23