Reengineering the Corporation Quanique Cotton

February 3, 2011

We are all familiar with the old saying “if it ain’t broke don’t fix it”. If asked the question, Should businesses change their processes even though their current processes are working, what would you say? Probably no, but, Michael Hammer and James Champy say yes. In their book “Reengineering the Corporation” they take a deep look at how reengineering processes can help a suffering business improve and thriving businesses continue to thrive. The book defines “reengineering” as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such; as cost, quality, service and speed (1). They don’t believe a business should simply make incremental improvements to the existing way of doing business but believe they should make a fresh start using a clean sheet of paper to create new ways of doing business. Who are the people that identified the process of business reengineering? What are the principles behind this concept and is this concept embraced?

Who are the authors?

Michael Hammer was born in Annapolis, Maryland in 1948. He earned a bachelors degree in Math in 1968, a masters degree in electrical engineering in 1970 and a doctorate in computer science in 1973. He taught Computer Science at MIT and later became a management consultant which kick-started his thinking and research on this book (1). He wrote three other books and multiple articles related to the topic of business reengineering. Michael Hammer died September 2008 at the age of 60 from a brain hemorrhage. James Champy is the former chairman of Dell Services, a consulting practice. He was responsible for providing direction and guidance to the company’s team of business and management consultants. James Champy was also chairman and chief executive officer of CSC Index, a $200 million dollar consulting practice. He earned a bachelors and masters degree in civil engineering from MIT and a Juris Doctorate from Boston College of Law (2).

What is business process reengineering really?

The main idea of business process reengineering is simply to start over. The can no longer stick with the old way of doing business. The key rhetorical question of reengineering is (5):

‘‘If I were re-creating this company today, given what I know

and the current level of technology, what would it look like?’’

What are the principles of business reengineering?

Reengineering the Corporation challenges the traditional assumptions of the division of labor. Gone are the days when a business could prosper using the work style created by Adam Smith in “Wealth of a Nation, 1776”. In which, companies like Ford and General Motors adopted the assembly line approach. This approach was effective in those times but in today’s environment would result in; high overhead costs, delays and errors and rigidity (5). The basic questions a business must ask are; does our mission need to be redefined? Are our strategic goals aligned with our mission? Who are our customers? There is no step by step guide about how to do business reengineering. However there are recurring themes that most processes align with (4):

  • Several jobs are combined. The assembly line approach is rejected
  • Decision making falls to the works not the managers
  • Process steps are performed logically not and naturally
  • No standardization – processes can have multiple versions of the same product
  • The work is performed where it makes most sense.
  • Checks and controls are reduced or eliminated
  • Hand offs and reconciliations are minimized

Reengineering the Corporation was on the New York Times Best Sellers list for 41 weeks in a row (1). It was pinned as the most successful business book of the decade. Many businesses embraced this concept and began reengineering projects and succeeded. However reengineering earned a bad reputation because such projects have led to massive layoffs. Although there are many success stories it does not always live up to expectation. The main reasons are (6):

  • Reengineering assumes that the factor that limits an organization’s performance is the ineffectiveness of its processes.
  • Reengineering assumes the need to start the process of performance improvement with a “clean slate,” i.e. totally disregard the status quo

In conclusion, “Reengineering the Corporation” changed the way businesses looked at process change. In order to stay competitive business must find ways to reinvent themselves to keep customers happy. This includes ditching the ways of the past and embrace new initiatives. Michael Hammer and James Champy give countless examples in the book that all businesses can identify with. Although there is no specific way to construct business process reengineering there is clear evidence that when a business does take on this project positive results follow.

Works Cited

(1) http://www.nytimes.com/2008/09/05/business/05hammer.html

(2) http://en.wikipedia.org/wiki/James_A._Champy

(3) http://www.flipkart.com/reengineering-corporation-michael-hammer-james-book-0060559535

(4) Reengineering the Corporation, Michael Hammer, James Champy

(5) http://www.imamu.edu.sa/Scientific_selections/abstracts/Documents/Reengineering%20The%20Corporation.pdf

http://en.wikipedia.org/wiki/Business_process_reengineering

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3 Responses to “Reengineering the Corporation Quanique Cotton”

  1. denise jeffries said

    Thoughly enjoyed your blog — I find that Hammer/Champy really do ‘take the hammer’ to change. Their approach of ‘throwing the baby out with the bath water’ is radical in nature and a viewpoint meant to create controversy and encourage new thought processes and new avenues to explore. At the same time, it’s not always the best way to go about change.

  2. Subbu Bodem said

    I agree with Denise that it is not always the best way to go about. I don’t think reengineering a process ‎that is performing well, is a good idea. I would tweak it to perform better.‎ If a process is performing at >70% of its expected level then reengineering may the way to go, because of the costs involved. Just my opinion.

  3. jeffd00 said

    While this approach works for failed processes, or under performing processes – I think a SixSigma approach would be better in evaluating what change is needed to an existing process. Using statistical methods to improve the quality of a processes allows you to identify causes of defects and rank them from highest impact to lowest, so you can see which areas give you the most value in fixing.

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