Are you an Inside-Out or Outside-In Organization?

Are you the kind of organization that is so attuned to your customers that you can think from their perspective?  What kind of organization are you anyway?

Evidently this is not a question many organizations ask or consider relevant to their planning. A client law school once asked us to help them with a student- and customer-centric strategy as complaints about their lack of customer service mounted.  They believed that the primary problem was the unfriendly behavior of staff from a number of service divisions. Hence, their mandate to us was to improve staff’s attitude toward customers and instill in them more flexibility and willingness to help.  The problem we soon discovered was that the law school itself was hierarchical, rigid and process- rather than relationship-centered.  Its entire culture, priorities and structure reflected this inward-oriented focus.  Important professors were far more focused on their small, well-endowed, and comfortable research centers and the lucrative contracts they afforded them, than on their students; and planning excluded everyone but the senior team.  It would be impossible for the law school to become “customer-centric,” unless it put people at the center of its business and culture, and changed the basis of its relationships with staff, students, their parents and other stakeholders.  

Time and time again, we have been asked to “fix” relationships with members, chapters, partners, staff and other stakeholders the way you ask a plumber to fix a leaky faucet—just fix the “problem” staff or member and the relationship would fall into place. This is a tell-tale sign of inside-out thinking that is, thinking from the perspective of your association, university or business; placing your organization and its products at the center, with the world conforming to your sense of time, pace, mission, governance restrictions and policies, priorities and perception of value.   The opposite—an outside-in orientation—is when you see the world through the eyes of your stakeholders: focusing on your customers’ success, preoccupying yourself with your customers’ problems and solutions to them; eager to learn and constantly adapting your organization, reconfiguring your programs, recalibrating your value proposition and even re-defining the business you are in to be able to provide optimal value to what truly matters to customers at any given time.  No matter how vigorous your rhetoric or marketing campaign, if your basic orientation is from the inside-out, you are not in sync with your customers and what matters to them. Case in point:

In the past four years, despite aggressive marketing and acquisition efforts,   the membership of this professional, mid-sized association in the scientific and engineering fields dropped by 35 percent and continues to decline. The chief reason lapsing members give for not renewing: not enough value for the money. During the same time, however, the membership of a free, member-created, LinkedIn community affiliated with this association had grown by leaps and bounds-- from 0 to 24,000 in just the past four years. 

For an association focused on members and open to learning, these statistics alone would have been clear indicators that members needed solutions and paths of engagement that they are not currently finding within the association. Unlike the static association membership of dues for a set menu of discounts and standalone programs and products, the online member community was vibrant and dynamic.  In daily discussions, community members posed and answered questions about specific technical processes; bought and sold products and equipment; and shared best practices, job opportunities, and additional sources of information about technical questions. For the member-centric association these activities would have given them invaluable clues for what members wanted that they would never get through their committee planning, surveys or formal focus groups. The community would have been seen as an enormous opportunity to launch a new membership model building on, facilitating and adding more value to what members started, while minimizing risks. Instead of investing in marketing campaigns to “persuade,” they would be starting with a community of stakeholders in place.  Instead, the association saw the LinkedIn community members as “rogue members” competing with them.

Entrenched assumptions for what “membership” looked like and how members were defined, made it impossible for the association to recognize value that did not fit within existing categories.   When asked if they monitored their LinkedIn community or mined it for member needs, values, industry trends, or educational topics, their response was, “Why would we do that?”  Because the association is operating on unexamined assumptions and deeply entrenched habits of mind, it had basically written off all 24,000 members of this online group, and left on the table what could have been its lifeline to the future. 

Instead of re-assessing its value for members on the basis of members’ own criteria, the association responded with an all-out, multimedia marketing effort to “communicate” its value, that is, their assumption for what members should value.  Like many other associations, they were firmly convinced that if their members only knew about all their programs and resources, they would be delighted to remain members.  All they needed was more and better communication.  It should come as no surprises that, despite these efforts, first-year members in this organization continued to drop out at rates of 60 percent or more.     

The association’s hyper-focus on selling its own products obscured true understanding of their members and missed the opportunity that could have saved them from bankruptcy and restored them to relevancy.

All this is to say that unless your culture and organizational focus are outside-in—starting with the customer and organizing every aspect of the business around him—no investment or effort at resonating with what matters to your customer will make any difference.

My research showed 6 pivotal areas of practice, thought and behavior that indicate an organization’s true orientation and are the key pivots of change.  Take the test  that I am still developing to find out your organization’s true personality and gauge where you want to be in the future. You will have to add up your individual scores to come up with a final score that corresponds to organizational personality types. 

 


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