Reengineering: What Happened?


The Mandate for New Leadership

By James Champy

HarperBusiness 212pp $25

Two years ago, a book was published that helped define one of the most influential management concepts to emerge in years. Reengineering the Corporation, by James Champy and Michael Hammer, sold nearly 2 million copies in 14 languages, making it the best-selling business book since In Search of Excellence.

Reengineering inspired executives and managers in thousands of companies to start rethinking and redesigning such basic business practices as customer service, order fulfillment, and product development. And for some, reengineering brought quantum improvements in productivity, customer satisfaction, and quality while significantly cutting costs. Champy, chairman of CSC Index' Consulting Group in Cambridge, Mass., and Hammer have become world-renowned management gurus.

What can an author possibly do for an encore? Champy, flying solo here--Hammer will bring out two reengineering books later this year--opens with a startling admission: "Reengineering is in trouble." Despite notable successes at such companies as Bell Atlantic Corp. and Federal Express Corp., many reengineering efforts have fallen far short, Champy concedes. He cites one study in which companies failed to attain goals of cost reduction and market-share growth by as much as 30%. "The revolution we started has gone, at best, only halfway," he writes. "I have also learned that half a revolution is not better than none. It may, in fact, be worse." While countless managers have been persuaded to reengineer, too many have had poor or disastrous results.

So Champy examines the reasons reengineering fails--and concludes that the key problem is management itself. Operational work can't be reengineered without changing the way managers do their jobs. Consequently, this book is less about reengineering than about leadership, teamwork, empowerment, and corporate culture.

What does Champy have to add on such overworked topics? Mainly some valuable context. Radical change is impossible unless managers know how to, in his words, "organize, inspire, deploy, enable, measure, and reward the value-adding operational work." The lack of these skills has been a stumbling block to nearly every reengineering initiative.

Through extensive interviews with managers who have lived through generally successful efforts at such companies as Wisconsin Energy, Intel, and Frito-Lay, Champy tries to show readers how to clear the hurdles. Survivors of other reengineering efforts are bound to empathize with one manager who tells Champy: "We don't really know how to do reengineering in our company; so what we do is, we regularly downsize the company and leave it to the three people who are left to figure out how to do their work differently."

Like so many sequels, however, Reengineering Management lacks the pathbreaking content and passion of the original. Worse, readers have to slog through long transcribed passages of interviews that are often redundant or unrevealing. The oral-history approach just doesn't work here--and roughly 75 pages are given over to the device.

That's not to say that Champy didn't discover some exceptionally articulate managers with worthwhile things to say. Among them are Hewlett-Packard's Jim Olson, Intel's Kirby Dyess, and 3M's Leon Royer. They make you realize that reengineering can transcend what it too often becomes--a heartless exercise in downsizing.

Dyess, Intel's vice-president for human resources, speaks eloquently of the need to redeploy valuable people whose jobs are wiped out by reengineering. Royer, 3M's executive director of organizational learning services, uses the metaphor of a hockey team to describe how new leaders must view their jobs. In a reengineered workplace, he says, leadership "switches back and forth depending on who has the puck. And where is the ostensible leader, the coach? Sitting on the sideline without skates. A coach can't tell his skaters where to take that puck. He can train them, psych them, prepare them. But when the buzzer sounds, it is the team that's out there on the ice...."

Such comments help Champy provide insights into five vital "core processes of management." They are: "mobilizing" the troops behind an initiative, "enabling" the workforce to accomplish the change, "defining" the objectives, "measuring" performance, and "communicating" to employees throughout.

In almost all of these areas, Champy urges some critical, if not entirely fresh, rethinking. He suggests, for example, that peer review of an employee's performance is more valuable than the old-fashioned review by the boss. Similarly, he describes companies that communicate better with workers by sharing the results of customer-satisfaction surveys once seen only by management.

Champy alternates four chapters that make the case for changes in managing with four chapters of comments from his managers. But this reveals an exasperating flaw. Although he has already defined his core processes, no one speaks to the first and perhaps most agonizing and divisive process--mobilizing employees to accept the changes reengineering entails.

Despite this missing piece, Reengineering Management stands as a helpful, if somewhat disappointing, companion to the first book. Managers awash in the ugly chaos of tearing apart their companies will find guidance and consolation here. But Champy's encore could have used a bit of reengineering itself.

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