A.T. Kearney 82/7478 1

Outside-In Perspectives:Maintaining an outside-in perspective – best practices in staying current with market trends

Dr. Dale S. RogersNevada Logistics Institute

Reno, NV

11 August 2015

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Outside-In Perspective Overview

Having an inside-out perspective

Developing and maintaining an outside-in perspective

Extending the outside-in perspective

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HAVING AN INSIDE-OUT PERSPECTIVE

Impact of an internal focus without external understanding

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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

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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

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1972 Honda

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Evolution

Oldsmobile Main Plant, Summer 2011, Lansing, Michigan

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Digital Equipment Corporation

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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.

Options such as non-add, non-print, and individual clearing keys for each column.

Class 3 - 1911-1929

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DEVELOPING AND MAINTAINING AN OUTSIDE-IN PERSPECTIVE

Embracing an external understanding

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Structure Drives Behavior

Structure determines behavior

Behavior does not determine structure

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Constituents

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Outside-In Perspective

Successful companies often suffer from the “Not Invented Here (NIH)” syndrome

A key way to break out of this is to look at the firm from the perspective of customers and potential customers

Making sure that strategies and actions are chosen and implemented from a strong external perspective

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Coca-Cola Non-Carbonated Beverages

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EXTENDING THE OUTSIDE-IN PERSPECTIVE

Customers in complex supply networks

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Complex Supply Networks

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Attenuation

Attenuation is a decrease in signal strength during transmission.

Attenuation is the opposite of amplification, and is normal when a signal is sent from one point to another.

If the signal attenuates too much, it becomes unintelligible, which is why most networks require repeaters at regular intervals.

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Customers?

Customer needs?

Do customers want to satisfy

needs? How badly?

Customer perception of

benefits?

Customer knowledge & awareness?

Customer information

sources?

Customer buying

processes?

Customer conversion

costs?

Customer communication

processes & needs?

Customer alignment with organization?

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Outside-In Discipline

Customer Pictures

Analytical Rigor

Marketplace

Opportunities

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Strategy Management

Translate the Strategy

Manage strategic initiatives

Communicate the strategy

Review the strategy

Update the strategy

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Vantage Points

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Complete Customer

OrderFulfillment

Finance View

Operations View

PartnerView

CustomerView

Competition View

Supplier View

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Dual Perspectives

Inside-out perspective• Internal benchmarking

Outside-in perspective• External benchmarking• Voice of the customer

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Concluding Thoughts

Preservethe core

StimulateProgress