By Ettorre, Barbara
Management Review , Vol. 84, No. 1
Is there a soul in corporate America who has not heard of the word "reengineering" and has not used it to describe changes at his or her company?
Since the late 1980s and particularly in the past two years, business process reengineering has been extolled as just the ticket to enable companies to compete on into the millennium.
As happens with most prevalent ideas, however, reengineering carries with it a load of wrongheaded impressions. Just as there are organizations that believe that by merely saying "We're a TQM company" makes it so, there are enterprises that slap the label on everything from downsizing to ordinary streamlining. So far, American businesses--having jumped on the reengineering bandwagon in droves--have spent more than $1.5 billion on consultants and other expertise.
True business process reengineering is neither a quick fix nor an idea built on established methods. It goes beyond reinvention. "Nothing is sacred" is the rule. Reengineering tears apart an organization, producing a new and different enterprise top to bottom and destroying old notions of tasks, hierarchy and business functions. It is a wrenching, complicated and rigorous methodology. A company that has successfully reengineered itself is like a phoenix rising from the ashes.
Only a slender minority of enterprises claiming to have reengineered actually have transformed themselves, a phenomenon consultants acknowledge. A network of shared best practices, however, is springing up for organizations to emulate.
A commonly quoted statistic--apocryphal?--is that 70 percent of reengineering efforts are failures five years later. Lacking the will, these companies lapse into comfortable patterns. Their efforts do not produce transformed enterprises with the kind of world-class efficiency, quality, productivity and strategic marketplace position required to compete in the future.
Clearly, reengineering is not remotely easy, inexpensive or speedy. Reengineering proponent James A. Champy (see box on page 17), says that reengineering an entire corporation can be a 10-year process. Consultants see many companies that have botched their efforts the first time around. These organizations learned the hard way that much more than what they had imagined was called for.
The professionals have myriad war stories about prospective reengineering projects they removed themselves from because they were either other peoples' messes or virtually undoable. "We won't take on a job if a prospective client doesn't have top management in place that recognizes the need for reengineering, sees the opportunity for major benefits outweighing the cost and pain, and, lastly, has the will to do it," says William G. Stoddard, managing director of the reengineering practice at Andersen Consulting.
It takes those companies that have reengineered themselves or those still in the process to impart business lessons and cogent observations to the rest of us. Don't be fooled--some of these experiences may seem ordinary, but the sweep of change accompanying them can be farreaching.
Successful reengineering always starts at the top. A truism? Sure. It is usually CEOs who push for it, in many cases becuase they want their companies in on the latest trend or because they want magic solutions. What is surprising is that the CEOs of truly reengineered companies didn't back off when they realized just how rigorous the process would be. Successfully reengineered organizations report that their CEOs and top executive staff were actively involved early on, interacting with reengineering teams and seeing to it that serious methodology for continuous change endured in the future.
"It would be a very long time before we'd do anything like this again," says Bob Daniels, president and CEO of Liquid Carbonic Industries Corp., an Oak Brook, Ill., industrial gas company. Daniels was, from the beginning, the reengineering champion at his company. …