Dr. Michael Hammer is the leading exponent of reengineering and the founder of the reengineering movement. President
of Hammer and Company, a Cambridge, Massachusetts management consulting and education firm, Hammer wrote the influential
1990 Harvard Business Reviewarticle, "Reengineering Work: Don't Automate, Obliterate." He also co-authored
the bestselling The Reengineering Revolutionand Reengineering the Corporation.
Hammer regularly addresses and consults with many of the world's leading companies on the topic of business reengineering.
His seminars on reengineering are attended by thousands of people annually.
Hammer has been profiled in Business Week, The New York Times, The Boston Globe, and numerous business publications.
He was named one of the four preeminent management thinkers of the 1990's by Business Week and one of America's
twenty five most influencial individuals by Time. He was formerly a professor at the Massachusetts Institute of
Technology where he received his bachelor's, master's and doctoral degrees.
Sample Chapter
The Triumph of Process
Revolutions often begin with the intention of only improving the systems they eventually bring down. The American,
French, and Russian revolutions all started as efforts to ameliorate the rule of a monarch, not to end it. Reform
turns into revolt when the old system proves too rigid to adapt. So, too, the revolution that has destroyed the
traditional corporation began with efforts to improve it.
For some twenty years managers of large American corporations have been engaged in a relentless effort to improve
the performance of their businesses. Pressured by suddenly powerful international (especially Japanese) competition
and ever more demanding customers, companies embarked on crusades to lower costs, improve productivity, increase
flexibility, shrink cycle times, and enhance quality and service. Companies rigorously analyzed their operations,
dutifully installed the newest technological advances, applied the latest management and motivational techniques,
and sent their people through all the fashionable training programs--but to little avail. No matter how hard they
tried, how assiduously they applied the techniques and tools in the management kit bag, performance barely budged.
The problems motivating managers to make these efforts were not minor. The operating performance of established
corporations was grossly unsatisfactory, especially when compared with that of aggressive international competitors
or hungry start-ups. Some cases in point:
Aetna Life & Casualty typically took twenty-eight days to process applications for homeowner's insurance,
only twenty-six minutes of which represented real productive work.
When buying anything through their purchasing organization, even small stationery items costing less than $10,
Chrysler incurred internal expenses of $300 in reviews, sign-offs, and approvals.
It took Texas Instruments' Semiconductor Group 180 days to fill an order for an integrated circuit while a
competitor could often do it in thirty days.
GTE's customer service unit was able to resolve customer problems on the first call less than 2 percent of
the time.
Pepsi discovered that 44 percent of the invoices that it sent retailers contained errors, leading to enormous
reconciliation costs and endless squabbles with customers.
This list could be extended indefinitely. The inefficiencies, inaccuracies, and inflexibilities of corporate
performance were prodigious. This was not a new phenomenon; it was just that by 1980 these problems were starting
to matter. When customers had little choice and all competitors were equally bad, there was little incentive for
a company to try to do better. But when sophisticated customers began deserting major companies in droves, these
problems rocketed to the top of the business agenda. The persistence of performance problems in the face of intense
efforts to resolve them drove corporate leaders to distraction.
After a while, understanding gradually dawned on American managers: They were getting nowhere because they were
applying task solutions to process problems.
The difference between task and process is the difference between part and whole. A task is a unit of work, a business
activity normally performed by one person. A process, in contrast, is a related group of tasks that together create
a result of value to a customer. Order fulfillment, for instance, is a process that produces value in the form
of delivered goods for customers. It is comprised of a great many tasks: receiving the order from the customer,
entering it into a computer, checking the customer's credit, scheduling production, allocating inventory, selecting
a shipping method, picking and packing the goods, loading and sending them on their way. None of these tasks by
itself creates value for the customer. You can't ship until it's been loaded, you can't pack until it's been picked.
A credit check by itself is simply an exercise in financial analysis. Only when they are all put together do the
individual work activities create value.
The problems that afflict modern organizations are not task problems. They are process problems. The reason we
are slow to deliver results is not that our people are performing their individual tasks slowly and inefficiently;
fifty years of time-and-motion studies and automation have seen to that. We are slow because some of our people
are performing tasks that need not be done at all to achieve the desired result and because we encounter agonizing
delays in getting the work from the person who does one task to the person who does the next one. Our results are
not full of errors because people perform their tasks inaccurately, but because people misunderstand their supervisor's
instructions and so do the wrong things, or because they misinterpret information coming from co-workers. We are
inflexible not because individuals are locked into fixed ways of operating, but because no one has an understanding
of how individual tasks combine to create a result, an understanding absolutely necessary for changing how the
results are created. We do not provide unsatisfactory service because our employees are hostile to customers, but
because no employee has the information and the perspective needed to explain to customers the status of the process
whose results they await. We suffer from high costs not because our individual tasks are expensive, but because
we employ many people to ensure that the results of individual tasks are combined into a form that can be delivered
to customers. In short, our problems lie not in the performance of individual tasks and activities, the units of
work, but in the processes, how the units fit together into a whole. For decades, organizations had been beating
the hell out of task problems but hadn't laid a glove on the processes.
It wasn't surprising that it took managers a long time to recognize their mistake. Processes, after all, were not
even on the business radar screen. Though processes were central to their businesses, most managers were unaware
of them, never thought about them, never measured them, and never considered improving them. The reason for this
is that our organizational structures for the last two hundred years have been based on tasks. The fundamental
building block of the corporation was the functional department, essentially a group of people all performing a
common task. Tasks were measured and improved, the people performing them were trained and developed, managers
were assigned to oversee departments or groups of departments, and all the while the processes were spinning out
of control.
Slowly and even reluctantly, American corporations began in the 1980s to adopt new methods of business improvement
that focused on processes. The two best known and most successful were total quality management (TQM) and reengineering.
Through a long period of intensive application of these techniques, American businesses made enormous headway in
overcoming their process problems. Unnecessary tasks were eliminated, tasks were combined or reordered, information
was shared among all the people involved in a process, and so on. As a result, order of magnitude improvements
were realized in speed, accuracy, flexibility, quality, service, and cost, all by at last attending to processes.
The application of process-oriented business improvement programs played a major role in the competitive resurgence
of American companies and the revitalization of the American economy in the 1990s.
So far, so good. But to paraphrase an infamous statement from the Vietnam era, process-centered improvement techniques
saved companies by destroying them. By bringing processes to the fore, the very foundations of the traditional
organization were undermined. A disregard for processes had been built into the structure and culture of industrial
era corporations. The premise on which modern organizations were founded, Adam Smith's idea of the specialization
of labor, was in fact a rejection of process. It argued that success was based on fragmenting processes into simple
tasks and then resolutely focusing on these tasks. By attending to processes instead, the new improvement efforts
created stresses that could not be papered over.
Who would have control over the newly recognized and appreciated processes? Consisting as they did of diverse tasks,
processes crossed existing organizational boundaries and thereby imperiled the protected domains of functional
managers. The new ways of working did not fit into the classical organization. They often entailed the use of teams,
groups of individuals with various skills drawn from different functional areas. But such teams had no place in
the old organizational chart. Whose responsibility would they be? The new processes often called for empowered
frontline individuals who would be provided with information and expected to make their own decisions. This was
heresy in organizations where workers were considered too simple to make decisions and where the need for supervisory
control was considered a law of nature. In short, it quickly became clear that the new ways of working that marvelously
improved performance were incompatible with existing organizations: their structure, personnel, management styles,
cultures, reward and measurement systems, and the like.
Summary
Reengineering has captured the imagination of managers and shareholders alike, sending corporations on journeys
of radical business redesign that have already begun to transfigure global industry. Yet aside from earning them
improvements in their business performance, the shift into more-process-centered organizations is causing fundamental
changes in the corporate world, changes that business leaders are only now beginning to understand. What will the
revolutions final legacy be? Beyond Reengineering addresses this question, exploring reengineering's effects on
such areas as:
Jobs: What does process-centering do to the nature of jobs? What does a process-centered workplace feel like?
Managers: What is the new role of the manager in a process-centered company?
Education: What skills are vital in the process-centered working world, and how can young or inexperienced workers
prepare?
Society: What are the implications of process-centering for employment and the economy as a whole?
Investment: What are the characteristics of a successful 21st-century corporation?
An informed look at one of the most profound changes to ever sweep the corporate world, Beyond Reengineering is
the business manual for the 21st century.
Table of Contents
Part I: Work
Chapter 1 The Triumph of Process
Chapter 2 Voices from the Front Lines (I)
Chapter 3 From Worker to Professional
Chapter 4 Yes, But What Does It Mean for Me?
Part II: Management
Chapter 5 From Manager to Process Owner
Chapter 6 What is Business Anyway?
Chapter 7 Whats Football Got to Do with It?
Chapter 8 The End of the Organizational Chart
Chapter 9 Voices from the Front Lines (II)
Part III: Enterprise
Chapter 10 The Soul of a New Company
Chapter 11 Corporate Jericho
Chapter 12 Rethinking Strategy: You Are What You Do
Chapter 13 The Process of Change
Part IV: Society
Chapter 14 What I Tell My Children
Chapter 15 Picking Tomorrows Winners
Chapter 16 Utopia Soon or Apocalypse Now?
