Reengineering is a new endeavor for American business. Those companies currently engaged in the process are true pioneers in the field. For companies who dare to follow in the footsteps of these early adapters, there is a small amount of literature available to guide them along the path. Unfortunately, what research there is tends to give little attention to the critical areas of plan design and implementation. Instead of focusing on the all-important “how” of reengineering, the research tends to highlight the “why” and the “who.”
There are two good reasons for this lack of information on implementation. One, the reengineering movement is still in its infancy stage. Many companies currently being studied are still in the process of or have just completed a reengineering, and it is difficult to draw reliable conclusions. The second reason is inherent in the process itself. Any company undertaking a reengineering faces a unique set of challenges and circumstances. Their reengineering effort must be customized to their individual needs and those of their customers, and what worked well for one company may not work for another.
So there is no simple recipe, no step-by-step process to lead reengineering neophytes through the journey from start to finish. But there are some basic guidelines that can be applied to any reengineering effort. If followed, they can make the reengineering process more manageable and increase your chances for success. Drawing extensively from Hammer and Champy’s excellent work, Reengineering The Corporation: A Manifesto For Business Revolution we have come up with eight essential steps which we feel should be part of any reengineering process.
Eight Steps to Reengineering
1. Determining the Need for Change and Setting the Vision
The first, and perhaps most important step, is to get very dear on why the company needs to reengineer and where you need to be in the future. Getting people to accept the idea that their work lives will undergo radical change is no easy task. It requires a selling job that begins when you recognize that reengineering is essential to the future success of the company and doesn’t wind down until your redesigned processes are in place.
Therefore, it is vital to articulate two key messages to everyone in the organization. The first message says “here is where we are as a company and this is why we can’t stay here.” Following on that, the second message says, “This is what we, as a company, need to become.”
The first message has to make a compelling argument for change. It must convince employees that reengineering is necessary for the survival of the company. Without this compelling argument, your chances of getting the necessary support from employees are slim and none. Worse, without the compelling argument, you may get outright obstruction of the reengineering effort.
So the first message puts forth a strong ‘case for action.’ In clear, concise, and compelling terms it says why the company needs to reengineer. The argument must be dramatic and supported by evidence that clearly portrays the negative outcomes if the company does not reengineer.
The second message, the vision, gives employees a tangible goal to shoot for. It acts as the flag around which to rally the troops when difficulties arise or morale begins to sag. It also provides a focal point for employees, reminding them constantly of what they are trying to change. It tells them “this is who we want to be.”
The vision statement, or whatever you choose to call it, articulates what the organization is trying to become. It describes how the company will operate and what the outcomes will be in the reengineered state. It captures the imagination of your employees and pulls them towards a more desirable future. At the same time, it also provides a yardstick by which to measure the progress of your reengineering effort.
2. Putting Together the Reengineering Team
Companies don’t reengineer: people do. The people you choose to lead your reengineering effort will ultimately determine its success or failure. Hammer and Champy have identified five roles that, either distinctly or in various combinations, are critical to implementing the reengineering process.
- The Leader: A senior executive who authorizes and motivates the overall reengineering effort.
- The Process Owner: A manager with responsibility for a specific process and the reengineering effort focused on it.
- The Reengineering Team: A group of individuals dedicated to the reengineering of a particular process who diagnose the existing process and oversee its redesign and implementation.
- The Steering Committee: A policy-making body of senior managers who develop the organization’s overall reengineering strategy and monitor its progress.
- The Reengineering Czar: An individual responsible for developing reengineering techniques and tools within the company and for achieving synergy across the company’s separate reengineering projects.The reengineering leader is the key. Ideally, he or she is a senior executive who has enough authority to make radical change happen. The leader’s primary role is to act as the visionary and motivator and to communicate the importance of the process throughout the organization. The CEO is rarely the reengineering leader.The process owner should be a senior-level manager with the prestige, credibility and clout to implement the change. While the leader’s job is to make reengineering happen at the large level, the process owner makes it happen at the individual level. In some companies, designating the process owner may be deferred until the critical processes for reengineering are identified. There should be a distinct process owner for every process being reengineered.The reengineering team consists of the people who produce the ideas and plans and often turn them into reality. Ideally, a team will have 5 to 10 people, some of whom are insiders, people currently working inside the process undergoing reengineering, and some of whom are outsiders, people who are not involved in the work process.The steering committee is a collection of senior managers who plan the organizations overall reengineering strategy. It is also optional. Some companies insist on having it; others can easily live without it. The leader chairs the steering committee and helps it oversee larger issues that transcend individual processes. For example, the steering committee might deal with the order or priority among competing reengineering projects and how resources will be allocated. Or, they might resolve conflicts among process owners.The reengineering czar manages the reengineering effort across the whole organization, in effect serving as the chief of staff for the engineering leader. The czar has two main functions: to enable and support each individual process owner and reengineering team and to coordinate all ongoing reengineering activities. Among other activities, the czar is also responsible for developing the infrastructure so that future reengineering efforts benefit from the experience of the first.
3. Identifying the Processes to Be Reengineered
You now have the vision, the compelling argument and the right people in place. Next comes the burning question: what is going to get reengineered?
No company can reengineer all its high-level processes at once. So it’s important to choose the right process, or processes, to begin with. Hammer and Champy suggest using three criteria to make your selection.
The first criteria is dysfunction: which processes are in the deepest trouble? When looking for dysfunction, the most obvious processes are those that you already know are in trouble. An example might be a product development process that hasn’t come up with anything new in years.
The second criteria is importance: which processes have the greatest impact on your customers? While customers generally have no reason to know your processes in detail, they can still be a good source of information for comparing the relative importance of those processes. Ask your customers about their most important issues, such as cost, on-time delivery, or product features. Then, use their answers to create a priority list of the processes that most affect their critical issues. Processes that deliver outputs to internal customers should also be considered in this category.
The third criteria is feasibility: which processes are currently the most amenable to process redesign? Here, you examine the factors that will determine whether or not a particular reengineering effort will succeed. Perhaps the most important factor is scope. The larger a process, and the more organizational units it involves, the broader its scope. You get a larger payoff with a broader scope, but you also lower your chances for success. At the same time, high cost also reduces feasibility. The greater the cost of the reengineering effort, the more hurdles you have to overcome. And finally, when assessing feasibility, consider the strength of the reengineering team and the commitment of the process owner.
4. Understanding the Process
Before you can successfully reengineer a process, you must thoroughly understand it. You need to know what it does, how well or poorly it performs, and the critical issues that govern its performance. But the goal here is not to analyze the process in intimate detail. Rather, you are looking for a high-level view that will provide team members with the intuition and insight to create a totally new and superior design.
The best place to begin to understand a process is to look at it from the customer’s point of view. What are their requirements? What problems do they have? What do they say they want and what do they really want? How do they use the output of your process? The ultimate goal of your redesign is to create a process that increases your ability to meet customer needs. Therefore, it’s important that the process team truly understands those needs. In fact, a reengineering team should understand its customers better than they understand themselves.
Once the team understands what the customer needs, it has to look at what the process currently provides. Again, the goal is to understand the ‘what’ and the ‘why,’ not the how. The team should be less concerned with how the process works today and focus more on what the new process will have to do to meet the identified customer needs.
Although benchmarking is currently a popular tool for improving processes, Hammer and Champy caution against using it in the reengineering process because it can restrict the team’s thinking to what is currently being done in the industry. If the team does decide to use benchmarking, it should benchmark against the best in the world, not the best in it’s industry.
Keep in mind that the goal in diagnosing the current process is NOT to fix it. After all, an old process can only take so much fixing before the marginal benefits aren’t worth the effort. The goal is to totally redesign the process. The reason the team studies the old process is to learn and understand what is critical in its performance. The more the team knows about the real objectives of a process, the better it will be at its redesign.
5. Redesigning the Process and Integrating the New Information Technology
As Hammer and Champy so aptly put it, redesign is the most nakedly creative part of the entire reengineering process. More than any other, it demands imagination, inductive thinking, and a touch of craziness. At the same time, redesign can be unnerving because the team can do whatever it likes.
A downside to redesigning a work process is that it isn’t algorithmic or routine. There are no set procedures that will mechanically produce a radical new design process. On the other hand, you don’t have to start with an entirely blank slate.
There are techniques available that have worked well for some companies. So, although there are no hard and fast rules for process redesign, there are principles and precedents that can help you get through this stage of the process.
Three Basic Principles Can Help Your Reengineering Team Get The Ideas Flowing:
- Boldly apply one or more principles of reengineering
- Search out and destroy assumptions
- Look for opportunities for the creative application of technologyThe misuse of technology is often a major stumbling block in a reengineering effort. A company that can’t change the way it thinks about information technology won’t be able to reengineer. Technology is more than just automation. Don’t fall into the trap of looking for problems first and expecting technology to provide the solution.The key is to use technology to help you redesign the new process, NOT to make the old process better. This requires inductive thinking — the ability to recognize a powerful solution and then seek problems that it might solve, in some cases problems you aren’t even aware you have. Instead of asking, “How can we use new technologies to get better at what we are doing?” ask, “How can we use new technologies to do things we are NOT already doing?”Keep in mind the following lessons learned from companies who have already undertaken extensive reengineering efforts:
- You don’t need to be an expert to redesign a process.
- Being an outsider helps.
- You must discard preconceived notions.
- It’s important to see things through the customer’s eyes.
- Redesign is best done in teams.
- You don’t have to know much about the current process.
- It’s not hard to have great ideas.
- Redesign can be fun.
- 6. Starting Out Small Reengineering requires sharp focus and enormous discipline. One of the biggest mistakes is trying to do too much too soon. Management’s time and attention are limited, and if your managerial resources are scattered among too many processes, the reengineering effort won’t get the support it needs.Instead, concentrate your reengineering efforts on a small number of processes at any given time. In step three you may have identified a number of processes critical to your company and your customers’ needs. Don’t feel you have to accomplish them all at once. Choose one or two that offer the best chance for success and get started. Remember, when asked to do too much at once, organizations become bewildered rather than energized.7. Spreading the Reengineering Process Throughout the CompanyThis is an area where many companies fail. Reengineering is not a quick-fix or one-shot program. It is a process of, piece by piece, redesigning your entire organization to better serve the needs of your customers. Here are some key mistakes to avoid as you move through the process:
- Trying to fix a process instead of changing it. The amount of time, energy and cost inherent in reengineering requires a complete and total redesign of work processes. Merely fixing a process results in a minimal payoff for your investment of organizational resources.
- Ignoring everything except process redesign. A reengineering effort triggers many changes, such as job designs, organizational structures and management systems. These must also be redesigned to maintain organizational integrity.
- Neglecting people’s values and beliefs. Pay attention to what goes on in your employees’ heads as well as what happens on their desks. Constantly communicate about the new values, reward behaviors that support those values, and demonstrate your commitment to them through your own behavior and that of senior management.
- Settling for minor results. Marginal improvements only complicate the process, making it harder to figure out how things really work. Taking incremental steps only reinforces a culture of incrementalism, which prohibits taking the bold steps necessary for reengineering.
- Quitting too early. Many companies scale back or abandon their reengineering efforts at the first sign of trouble. But others also quit at the first sign of success, feeling they have accomplished their goal. Keep focused on the long-term goal and the huge payoffs waiting at the end of the road.
- Trying to make reengineering happen from the bottom up. Middle managers and front-line employees are not capable of initiating and implementing a reengineering effort. They lack the broad perspective that reengineering demands, and their expertise is limited to their individual functions and departments. Consequently, they rarely see the process as a whole or recognize how poor process design is at the root of their problems. While these people must certainly be involved in the actual process redesign, the total reengineering effort must come from the top down.
- Skimping on the resources needed for reengineering. You can’t achieve breakthrough results without a substantial investment. For reengineering, that means investing the time and attention of your best people. Reengineering cannot be trusted to those who don’t understand it or don’t fully support it. In addition, skimping on resources communicates a lack of commitment from senior management to the rest of the organization.
- Pulling back when people resist. Resistance is an inevitable reaction to major change. On top of that, reengineering isn’t to everyone’s advantage. Many employees will have a vested interest in maintaining the status quo. So expecting and planning for resistance must be an integral part of any reengineering effort. The better you do step 1 — communicating your compelling argument for change and your vision for the future — the easier it will be to manage resistance. Some people are bound to get their feathers ruffled, but you can’t please everyone. Trying to do so will only devalue the reengineering effort and delay its implementation.
- 8. Reinforcing the Culture of Reengineering.For reengineering to work, the culture must support the process. In today’s corporate environment, rational people will react warily, if not cynically, to suggestions that they break the rules or think outside the box. It takes much more than words to instill the kind of culture you need. The desired culture can be created and reinforced through a focus on three key areas: signals, symbols and systems.Signals are the explicit messages the leader sends to the organization about reengineering: what it means, why you are doing it, how you intend to go about it, and what it will take. Communicate these signals again and again, and then communicate some more. Reengineering is a difficult concept for employees to grasp because it goes against everything they have done in their careers. When it comes to reengineering, you simply can’t communicate too much.Symbols are actions the leader performs to reinforce the content of the signals. These include assigning the company’s “best and brightest” to the reengineering effort, rejecting design proposals that offer only incremental improvement, and removing managers who block the reengineering effort. Over and above their intrinsic value, these are symbolic actions. They prove to the organization that you are serious about reengineering.Finally, the leader needs to use management systems to reinforce the reengineering message. These systems must measure and reward people’s performance in ways that encourage them to attempt radical change. You also have to be willing to five with a certain amount of failure. Nothing will shut down radical thinking and innovation quicker than punishing failure.
There you have eight basic principles that can help guide a reengineering process, regardless of your business or industry. We strongly encourage you to look closely at whether reengineering makes sense for your business, and to seek out as much information as possible before undertaking such an enormous task.
To quote Hammer and Champy, “The uncertainties of reengineering cannot be used as an excuse to put off what must be done. Leading corporations in nearly every industry have already begun to reengineer. As more companies bring their key processes up to higher levels of performance, the reengineering option becomes a competitive necessity for others in the same industry. Reengineering by even one key participant in a market creates a new benchmark level that all competitors must meet.”
“Reengineering is still a new endeavor, all of us engaged in it are pioneers. The world of the industrial revolution is giving way to an era of a global economy, powerful information technologies, and relentless change. The curtain is rising on the Age of Reengineering. Those who respond to its challenges will write the new rules of American business. All that is needed is the will to succeed and the courage to begin.”
This article is based upon the ideas contained in Michael Hammer and James Champy’s book Reengineering The Corporation: A Manifesto For Business Revolution.