Many of you are younger than I am. I’ve enjoyed a 30-plus year career of many “ups”, and very few “downs”. Working in both large companies and smaller firms, I’ve participated in and witnessed great decisions and poor decisions; great execution and poor execution; stellar results and disappointing results.
The passing of time changes a great many things, and just as even-handedly, reinforces some never-changing truths. Technology and tools revolutionize a market, platforms emerge or die, and organizations evolve. But in the face of all this change, some core truths about businesses remain certain.
Here is just one, a very important one:
Customers Belong at The Center of Every Decision
Decision-making philosophies in businesses abound. Often, decision philosophies in a business are driven by a few key personalities. These key personalities each have a history, experience, and background which informs their view of how decisions should be made and which priorities to attach to making them. One critical by-product of these decision philosophies and their attending priorities is the culture that unfailingly fills in around them.
Many decisions can be grouped into one of two categories. The first is the “inside out” decision; the second is the “outside in” decision. Both of these decision types can exist within the same company, depending on the key personalities influencing them.
Inside-Out Decision Making
The “inside-out” decision is made based on the perspective of the business out to the customer. These decisions typically prioritize the operations of the company with the view that the business must be able to support the execution of a decision so-as to mitigate undue risk. Decisions with this philosophical viewpoint seek to address needed change with as little internal chaos as possible, and for good reason. Poorly executed decisions or decisions that over-reach the ability of the company to perform, puts the business in a tough, perhaps even untenable, spot. But while this idea is rooted in a desire to prevent risk, it often reinforces a culture that may actually increase the risk of irrelevance in the market. “This is how it’s always been done” is a classic symptom of the “inside out” decision philosophy.
Outside-In Decision Making
Conversely, the “outside-in” decision is made from the perspective of the customer into the business. The foundation of this decision philosophy is the commitment that customer behaviors drive how decisions are made and the priorities attached for consideration. Decisions with this philosophical viewpoint seek to address needed change as identified by the marketplace and voiced through customers. Sales driven organizations typically adopt this decision philosophy because customer feedback is an influential voice in the business through the advocacy of a sales force.
“Outside-in” decision making may have more inherent execution risk because the market doesn’t care whether an organization is prepared or capable of making a change. Organizations with this decision philosophy may struggle to meet the requirements of a needed change, but recognize the greater risk of irrelevance by not trying. An upside in a culture driven by an “outside-in” philosophy is agility, the ability to quickly adjust, fail forward, and change direction as the market changes. Critics may label this as a “ready, fire, aim” culture and to be sure, it has challenges as well.
In truth, most mid-size and large companies have, and probably need, elements of both these decision philosophies. But because culture is driven from the top down, long term business success can only be ensured if clarity about decision-making philosophies is provided by these key decision influencers. If they’re in lockstep with regard to the idea that Customers Belong At The Center of Every Decision, then the basis for making sound decisions will resonate loudly within the organization.
Chuck Parshall is an independent business consultant with Cansulta. He is focused on revenue and business alignment, identifying and resolving the sales, marketing, and operational challenges many small and medium businesses face.
Connect with Chuck at https://www.cansulta.com/store/chuck-p/
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