What is an outside-in perspective?
Management guru, Peter Drucker, famously defined business as nothing more than the value created for the customer. Everything should be configured around the customer, with the aim of marketing being to know and understand the customer so well the product or service fits him and sells itself “. This customer-centric vision of business demands an ‘outside-in’ perspective which is certain to reap business rewards. Like many worthwhile things, however, the path to success can be challenging:
‘To accomplish this [the ‘Outside-In’ perspective] companies must evaluate their decision making processes … since, despite most individuals’ best intentions, their decisions largely reflect internal viewpoints and myopic perspectives on customers’ needs. In practice, the decision-making process is heavily influenced by the assumptions and biases of the decision makers as opposed to the customer’s perspective’ – (Anderson et al, 2009)
Of course, organisations currently have a problem since most are led by white males, a demographic that does not correspond with that of the purchasing public, the majority of which is female. There are many sectors in which the female domination of purchasing exceeds 80% – this is the case of the grocery and health and beauty sectors for example – but in any event, women buy on average 83% of all products. With this in mind, and with the male-domination of senior positions of organisations still very much in evidence, organisations are not structured to deliver an inside-outside perspective. In a competitive market place, this failure will put organisations in a perilous position and on a steep decline. It may deliver short-term jobs for the boys, but is unlikely to deliver long-term profitability to stakeholders.
Here are a couple of examples. Tesco is a major retailer in the UK with a customer base that is largely female. Its sales have been on a catastrophic decline. All but one member of its board is male. In France, the Banque Nationale de Paris (BNP) has retail operations for which the majority clientelle is female since figures suggest that 89% of bank accounts are held by women (see here). Despite that, all but one member of its board is male. None of these three organisations would be easily capable of achieving the much sought-after ‘inside-outside’ perspective. Their ability to turn around the businesses is therefore in question.
In this series of three articles, we will look at three aspects: the first is psychology and the tendency of people to be drawn to others like themselves; the second is design and marketing and the third is leadership and change management. All three elements are essential to an understanding of how to configure organisations to deliver an ‘inside-outside perspective’.
What do you consider diversity?
The fact is that similarity is a powerful driver, with Plato mythologising the powerful human quest for ones ‘other half’ in his Symposium. The homogeneity principle summarises the tendency of people to select others like themselves, a tendency which puts obstacles in the way of diversity.
Examples? Consider the political elite of Britain. Cameron and his Chancellor, Osborne, not only share physical features, but schooling at two of the country’s most expensive schools, Eton and St Paul’s with fees of £30,000 + pa.
Rewind a few decades and consider Harold Macmillan who promoted Margaret Thatcher to a junior minister in 1961, just two years after she became an MP. The physical similarities between these two Oxford alumni are so pronounced in the drooping eyelids and aquiline noses that a diplomat referred to her as his ‘natural daughter’.
This speedy promotion of a woman at a period when her local constituency chairman had to be persuaded to even adopt her candidate, was extraordinary. You might say that Super-Mac was just replacing the previous incumbent, Pat Hornsby-Smith, with another woman but if so, another woman, Joan Vickers, later Baroness Vickers, was also available. Moreover, even Macmillan himself took sixteen years to reach junior ministerial rank.
The challenges for organisations
According to Peter Souter, a former President of the Design and Art Direction Association (D&AD) and now Chairman of TBWA UK, a major factor in the male domination of the advertising industry is that ‘people are slightly guilty of hiring themselves’ (Moss, 2007). The problem, as many of us know, is that people tend to be attracted to other people like themselves and unless steps are taken to counter this, people will recruit other people like themselves. This will lead to the embedding of certain norms, whether design norms or management norms, and recruiting a new mould of person can offer challenges to the recruits in terms of fit within an existing set of norms. The pressure to conform may lead them to model the values and behaviours of the dominant majority. As I wrote in ‘Gender, Design and Marketing’ (2009), ‘the forces of congruity within an organisation may impede the achievement of congruity with customers outside it.
Providing solutions
Fortunately, there are ways of guarding against the worst effects of the homogeneity principle. One way is to create clear job-related competences, and ensuring recruitment and promotion procedures that ensure organisational success. With the ‘outside-inside’ perspective in mind, this means developing competences that will ensure customer satisfaction.
In an era of immense customer power and choice, supported by a global supply chain, firms must be increasingly sensitive to the needs of customers to survive. As Drucker so prophetically said, ‘the purpose of business is to create and keep a customer’ and this is especially important in today’s volatile and competitive marketplace.
In the next two articles, we will look in more detail at how these competences might look from both a leadership and design perspective.
References
Anderson, J (2009), The Outside-In approach: eliminating our natural bias, Valkre Solutions
Drucker, Peter F. (1993), The Practice of Management, New York: HarperBusiness
Moss, G (2007), Psychology of performance and preference: Advantages, disadvantages, drivers and obstacles to the achievement of congruence’, Journal of Brand Management, 14 (4), 343-58
Moss, G (2009), Gender, Design and Marketing, Farnham, Gower
Moss, G (2014), Why men like straight lines and women like polka dots, Psyche books, John Hunt publishers