Reengineering

Article excerpt

Most managers can see flaws in "if it ain't broke, don't fix it." But equally flawed is the science of "muddling through" in which decisions deviate as little as possible from the traditional tried and true. Our competitors, especially those on the other side of the world, typically carry little baggage of outdated policies. Such firms bring us new, radically improved perspectives. To be competitive we too must learn the art of radically divergent thinking.

REENGINEERING DEFINED

A relatively new management term, reegineering is best explained in Reengineering the Corporation by Michael Hammer and James Champy (HarperBusiness, 1993). To describe what reengineering is, the authors talk about what it is not. It is not another quick fix or Japanese transplant. It is not another word for downsizing or restructuring. It is not an extrapolation from the accumulated wisdom of the centuries. It is instead a radical, discontinuous rethinking about how to solve problems and take advantage of opportunities. It rejects sacrosanct assumptions and starts over to redesign organizations and processes. It is about reinvention rather than improvement.

AN EXAMPLE OF REENGINEERING

Hammer and Champy seem less concerned with teaching how to reengineer than with demonstrating its virtues. They describe, for example, how IBM Credit Corporation reengineered the process for approving customer credit. Originally, when a request was called in, the first of 5 steps began with a member of the receiving group in Old Greenwich, Connecticut, who wrote the information down on a piece of paper. It was then bounced from department to department for up to 2 weeks while the sales rep frantically tried not to lose the sale. While the entire process actually took only 90 minutes of work, the application spent the remainder of the time in someone's basket. Reengineering in this situation meant replacing several specialists (credit checkers, pricers, etc.) with a single generalist who processed the whole application, usually in about 4 hours.

As in many instances of reengineering, the old way was based on assumptions that may have been valid once but had become disastrously impractical in the face of new technologies and intense competition. …