Outside-In Perspective
Throughout his writings Drucker emphasised the importance of the outside/in perspective. Recently, a television reality programme has replicated this concept with the “CEO undercover” series. Drucker pointed out the importance of the CEO being the outside-in champion. One great CEO I have met takes the executive team for a one week exercise per year where the existing staff show them the ropes. His executive teams have run the “Happy Road” employment centre, a betting agency, an income support centre and a tourist information centre. The importance of seeing the processes is akin to Toyota’s “use visual controls so no problems are hidden”.
The executive team, who are duty bound to undertake mundane tasks, ask the staff, “Why am I having to copy this out three times?”, “Why have I got to have a hard copy when I have an electronic copy?”, “Why do I have to enter so much detail in the database?” The staff replied “These are the procedures that you approved!”
On returning from this week the executive team are refreshed, are a tighter knit group whose priorities have changed completely. Now they focus on initiatives that are more focused on the customer.These revised initiatives will help the staff at the work face service their clients better.
Action: Plan for a week ‘outside-in’ visit to a branch accompanied by all your senior management team. Yes, I did say all!
Who of your non-customers should you be doing business with?
Only Drucker could coin a phrase, “non customers”, yet it gets right to the heart of the fundamental issue. Every private sector government and not-for-profit organisation is missing customers it should be servicing. This is particularly relevant in the government and not-for-profit sectors where members of the public, who should receive a service, are either unaware or too proud to ask for help. By constantly focusing on non customers, an executive team can find these customers and look after their needs.
Action: Monitor weekly progress on selling to the top five non customers you have identified.
Encourage and nurture innovation
Drucker realised the importance of innovation. He was aware of the many barriers put in front of staff that would inhibit innovation and performance. He was a great advocate of change and realised that management would be forced to experiment with ideas when not all the detail was known.Management needed to be open and prepared to make mistakes rather than establish a feeling of paralysis.
He loved everything Japanese; in fact it was a passion, a safe haven for him. The rise in importance of the Japanese business methodologies would have brought a smile to his face. One of the most important Japanese principles is Kaizen. The introduction to staff that every day they should look to perform something better, to innovate, to eliminate unnecessary steps, to question the past and to assume everything can be improved. You just have to find the way. Toyota is famous for their commitment to Kaizen.
Drucker believed that management should invest the necessary mental horse power to find better solutions. The solutions would be relentlessly discussed with all teams affected and “that every brain in the game” was used. Once a solution was found it should be implemented in three pilots (as I said Drucker loved doing things in threes) to ensure the benefits would meet expectations.
Action: Celebrate innovation every week. Highlight the champions as this will encourage others.
Develop a collaborative approach even with your competitors
As the mad hatter said to Alice, in ‘Alice in Wonderland’, “If you don’t know where you are going any road will take you there”. Drucker kept talking about the importance of having the right strategy for the organisation.
Drucker saw the importance of knowing what you were best at. Focusing on what Jim Collins would say on your Hedgehog.”You can be the world’s best in the area of your business that you are truly passionate about”, and there is an economic engine that will reward you.
He saw business as a “Lego” construction, where you could bolt together services provided either in-house or externally. He was referring to the fact that it was now easier than ever before to amalgamate different services from different entities and market it seamlessly to the customer as one entity. Businesses should be full of activities (pieces of the business) performed by third parties.
He stated that there was not competition but just better solutions. Drucker saw collaboration as the key to operating in this world, even with an organisation that you previously saw as a competitor.
In the government and not for profit agencies, collaboration has the same barriers as in the private sector. Egos and past institutional memories seem to prohibit staff from striking effective alliances with other organisations that can perform the service better and cheaper. As Drucker put it “Your back room is somebody’s front room”. He even went on to say that an organisation could achieve almost all functions from collaboration. Drucker saw only marketing and innovation as been sacrosanct in-house activities.
Action: Set out at least three alliances that have been mooted where activities can be done by a third party for the business and monitor progress on a weekly basis until alliances are functioning.