Naturally, reengineering is too good to be new. A contemporary repackaging of tried-and-true industrial engineering methods, this cure now is being administered in large doses to business enterprises that to survive must instantly show improved profits.
In one important way, though, reengineering differs from past incremental and analytic methods and allies itself with more suspect movements: In political terms, it more closely resembles a coup d'etat than a parliamentary democracy.
Those applying the label "efficiency through reengineering" advocate the adoption of radical means to achieve corrective actions. This extremism offers seemingly instant relief from the pressure on corporate executives to show immediate improvements. It calls for discarding all existing institutions and reconstituting an organization on the basis of completely fresh ideas; the new business model is expected to spring forth from the inspired insights of a new leadership team.
The reengineering movement's tone is set by its most prominent proponent, Michael Hammer, co-author of Reengineering the Corporation (Harper Business). He consistently invokes violence and revolution in rhetoric and practice. "The way you deal with resistance [to reengineering] is . . . a bloody ax," he told Across the Board a year ago. "Al Capone once said, 'You get a lot further with a gun and a kind word than with a kind word alone." Matching new prophets' ideas with past patterns helps determine whether their proposals simply repackage what has been tried before. Hammer's dogmatic pronouncements- as well as his sentence structure- resonate with the radical views put forth by political hijackers like Robespierre, Lenin, Mao, and Guevara. By replacing some of Hammer's nouns, one can produce slogans attributed to those who gained power by overthrowing the existing order. The following is a small collection of direct quotations from pronouncements by Michael Hammer. They are offered to illuminate the intellectual roots of reengineering thought from someone who claims to be its initiator:
"American managers . . . must abandon the organizational and operational principles and procedures they are now using and create entirely new ones.... Business reengineering means starting all over, starting from scratch.... It means forgetting how work was done.... Old job titles and old organizational arrangements . . . cease to matter. How people and companies did things yesterday doesn't matter to the business reengineer .... Reengineering ... can't be carried out in small and cautious steps. It is an all-or-nothing proposition." Reengineering the Corporation "In this journey we'll carry our wounded and shoot the dissenters.... I want to purge from the business vocabulary: CEO, manager, worker, job." Forbes ASAP, Sept. 13, 1993 "It's basically taking an axe and a machine gun to your existing organization." Computerworld,Jan. 24, 1994 "What you do with the existing structure is nuke it!" Site Selection, February 1993 "Reengineering must be initiated . . . by someone who has . . . enough status to break legs." Planning Review, May/June 1993 "You either get on the train or we'll run over you with the train.... The last thing in the world that reengineering does is enhance the manager's sense of self-importance, because one of the things that reengineering says is that managing isn't so important." Across the Board, June 1993 "Reengineering . . . will require a personality transplant . . . a lobotomy." Computerworld, June 1, 1987 "Don't try to forestall reengineering. If senior management is serious about reengineering they'll shoot you." Management Review, September 1993It is an unlikely coincidence that the most widely read book on reengineering carries the provocative subtitle A Manifesto for Business Revolution and claims to be a "seminal" book comparable to Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations - the intellectual underpinning of capitalism. Keep in mind that another popular polemic, also bearing the title "Manifesto," successfully spread the premise that the only way to improve capitalism is to obliterate it.
The morality of warfare-of vengeance, violent destruction, and the use of might-has been with us ever since primitive tribes competed for hunting grounds. Societies have recognized the importance of warfare by sanctioning a class, subject to some rules, to kill, while the redeeming code of loyalty and self-sacrifice for the good of all would prevail.
The morality of commerce, with us since 500 B.C. or so., is based on shunning force, developing voluntary agreements, collaborating even with strangers and aliens, respecting contracts, and promoting exchanges that benefit both the buyers and the sellers.
Nearly every large-scale tragedy of the last few centuries can be traced to the substitution of the morality of warfare for the morality of commerce, under the guise that this will lead to greater overall prosperity. Hammer's adoption of the non-redeeming expressions of military morality crosses the line of acceptability. Reengineering, an activity in the commercial domain, should be bound by its morality, with military language and thinking left to those who must confront the prospect of getting shot at.
Reengineering's radical promoters have succeeded in gaining at least temporary respectability, successfully translating 1960s radicalism-with its socially unacceptable slogan, "Do not reform, obliterate!"-into a fashionable, money-making proposition. Their clarion call for overthrowing the status quo is similar to that trumpeted by the students who occupied deans' offices across the United States. Now those arguments are parlayed into lucrative consulting assignments.
Leaders of revolutionary political movements since the French Revolution have been fixed on seizing power under whatever slogan could be sold to those hoping to improve justice, freedom, or profit. And those same leaders-mostly intellectuals who rarely delivered more than pamphlets and speeches-have consistently worsened conditions after taking over the Establishment.
Reengineering fits neatly into patterns of past revolutionary movements: In each case, the leaders call for uncompromising destruction of existing institutions. Only through this kind of attack on customs, habits, and relationships can newcomers gain influence with little opposition. The common characteristic of the elite that agitates destructively for positions of leadership is an arrogance that they are the only ones with superior insight, the only ones deserving of trust.
I call this more moderate approach "business-process improvement" (BPI). The first step-one that reengineering proponents generally skip-is gaining widespread support for change; after all, lasting improvements in business processes can be made only with the support of those who know the business. Leadership's primary task is creating conditions for continuous, incremental, and adaptive change.
Too often companies signal impending change poorly: by downsizing. Abrupt cutbacks responding to a steadily deteriorating financial situation are a sure sign that management has been incompetent or asleep. Dismissing employees on a large scale, accompanied by incentives for longtime employees to resign voluntarily, paralyzes the survivors with fear and an aversion to taking initiative. It forces out those most qualified to find employment elsewhere.
Getting rid of people whose skills have become obsolete reflects the organization's failure to innovate and learn. Liquidating a company is easy and profitable, but rebuilding it for growth pays off in the long term. While reengineering requires the company to take outside consultants' advice, BPI depends primarily on mobilizing employee commitment and imaginative cooperation, relying heavily on in-house know-how to find conditions that will support the creation of new jobs - even if that means that many existing positions will disappear.
BPI calls for applying rigorous methods to charting, pricing, and process-flow analysis of "as is" conditions. Process improvement continues for the lifetime of a company, with each major improvement bringing forth new payoff opportunities. The objective is to create a learning environment in which renewal and gain will be an ongoing process instead of just a one-time shock therapy. Adopting formal process-flow methods and a consistent technique for tracking local improvements allows the company to later combine processes initially isolated for short-term, local productivity gains.
In BPI, the people directly affected by the potential changes study the "as is" conditions and propose "to be" alternatives to achieve the desired improvements. In BPI everybody with an understanding of the business will be asked to participate.
For example, a government agency incurs internal charges of $10.05 per employee paycheck issued due to layers upon layers of bureaucracy. By comparison, a local commercial-services company - with integrated, streamlined processes - incurs charges of only $1.67. To bring down that $10.05 figure, employees are helping to compile "as is" work-flow diagrams showing who does what and when and how. Upon entering the diagrams into a computer, they will know that the paycheck costs so much because it has to go through, typically, the controller, then the personnel department, then the regional processing center, then the auditors.
The next step will be to complete a "to be" diagram showing how much money and time is saved when one link-say, the controller-is removed. Then the organization can determine how to skip that element, finding that the controller can pre approve checks and doesn't need to see them. After that it's a simple (though grueling) matter of examining each process in turn. BPI balances the involvement of information managers, operating managers, and subject-matter experts. Cooperative teams are assembled under non threatening circumstances in which much time is spent, even wasted, in discussing and evaluating different viewpoints. Unanimity is not what business process is all about: Differences are recorded, debated, and passed on to higher levels of management for resolution.
BPI requires that you perform a business-case analysis, which not only calculates payoffs but also reveals the risks of each proposed alternative. This is not popular because current computerized methods of analysis have too little integrity to be acceptable to financial executives.
Every day should be Process Improvement Day - that is how organizational learning takes place and how you gain employee commitment. At each incremental stage of process improvement, your people can keep pace with their leaders, developing the same understanding of the business. They are allowed the opportunity to think about what they are doing. They are not intimidated by precipitous layoffs that inhibit their sharing of ideas on how to use their own time and talent more effectively.
As currently practiced, reengineering assumes that your own people cannot be trusted to fix whatever ails your organization. It requires you to accept what the experts, preferably newcomers to the scene, tell you. In reengineering the consultants recommend what the "to be" conditions ought to look like, without learning the reasons for the "as is" conditions. Reengineering's credo is to forget everything you know about your business and start with a clean slate to "reinvent" what you would like to be.
But what applies to individuals or nations certainly applies to corporations: It is never wise to disregard your people, relationships with customers, assets, accumulated knowledge, or reputation. Versions of the phrase ". . . throw history into the dustbin and start anew" have been attributed to every failed radical movement of the last 200 years.
Reengineering proponents worry little about formal methods. They practice emergency surgery, typically amputation and tourniquet-like remedies to stop the flow of red ink. Reengineering may be appropriate under emergency conditions of imminent danger-but only as long as management understands that work-force demoralization means the patient may never fully recover. Hammer's simple methods, much swifter than BPI's more deliberate approach, are preferred by the impatient and those not compelled to cope with the long-term consequences of what happens to the quality and the dedication of the work force.
In reengineering, participation by most of the existing management is superfluous, because what is in place will be junked anyway. Under such conditions, for instance, bringing in a successful cookie-company manager to run a computer company makes perfect sense. In reengineering, debate is discouraged since the goal is to produce a stroke of insight that will turn everything around in a flash.
Autocratic managers leap at the opportunity to preside over a reengineering effort, as do chief information officers (CIOs) with propensities to offer technological means as a way of introducing revolutionary changes. In recent national meetings, computer executives have offered reengineering as the antidote to the declining position of the CIOs, which according to some stands for "Career Is Over."
Reengineering conveys a sense of urgency that does not dwell on much financial analysis, and certainly not on formal risk assessment; managers who tend to rely on bold strokes rebel against analytic disciplines.
Business-case analysis brings forth the traditional confrontation of the tortoise and the hare - the plodders versus the hipshooters. Though the hipshooters sometimes win, the odds are against them in an endurance contest.
Reengineering has the advantage of being a choice of last resort when no time is left to implement business-process improvement. In this sense, it is akin to saying that dictatorship sometimes is more effective than community participation. The drastic cure may have lingering, even fatal, side effects.
Despite occasional reversals in fortune, constitutional democracies have never willingly accepted dictatorship as the way out of their troubles, and the record of drastic, last ditch attempts to deal with crises in governance is dismal. Despite occasional short-term improvements, extreme solutions often destroy past accumulation of human capital, and retrospectively, these eras of violence are always viewed as times of retrogression.