In our consulting work, we started to see companies operating in new ways. For example, it took Ford 500 people to do the same work that Mazda was doing with 5 people. We also saw that companies had become overly complex, bureaucratic, fragmented in their structures and work. We consulted with an insurance company that was taking 24 days to do ten minutes of real work because the work had to move through so many different departments. Information technology was also starting to play a role in improving operations, but companies that just automated old processes were not improving their performance. So we formulated a set of principles that argued work had to be radically redesigned, from a process perspective, not a task perspective, and we called it “reengineering”. We knew that we had an important idea. We were making it work in real companies: improving quality, reducing cycle time, and lowering costs all at the same time. We saw the book as a way of branding the idea. We would give the idea away and popularized it, but we did not expect that the idea would become as big as it did.
Why do you think the book was so successful and resonated with the business world?
At the time the book was first published, the business world was in recession. Companies were looking for new ways to improve their performance and competitiveness. The book made a compelling case for why companies and work had to change. Companies also seemed more receptive to new ideas in the nineties than they are today. (I think that’s because there are too many ideas around today and that companies have become tired of trying ideas that don’t work.) Reengineering is a simple idea but not easy to implement–radical operating change never is.
Do you think the business world has become limited by its traditions in Leadership and Management?
I don’t think that the business world is limited at all by its traditions in leadership and management. If anything, the business world has been seduced into new ideas that are weak and into the management idea du jour. We need to return to the basic ideas of management that Peter Drucker taught us fifty years ago. You could argue, of course, that reengineering is one of those ideas du jour, but I believe that reengineering is more important today than when we wrote the book. The ubiquity of technology–particularly in the form of the Internet–enables work change far more radically than we envisioned in 1992. The design of work must change and process redesign is a critical part of the change. The nature of business is also changing today, not the fundamental principles of management. New business models–lean, technology enabled, global–are emerging. These new business models will threaten many existing companies.
What companies recently have reengineered themselves and have successfully been reborn?
I recently wrote about Smith & Wesson, the venerable gun manufacturer. That Company has revived itself from a near death experience. When I visited its plant in Springfield, Massachusetts, workers on the assembly line lectured me on how they were doing process improvement to reduce cycle time. Each month they were increasing the number of guns assembled by the same crew. It was an inspiring visit. I have also been impressed by a company you may not have heard of, but you will know its brands: Jarden. Jarden owns the companies that manufacture Coleman camping equipment, Crock Pot slow cookers, K2 skis, Mr. Coffee coffee makers, and Ball home canning jars–among other companies and products. Jarden does a form of continuous reengineering and puts what it saves in operations back into product innovation. That’s what a good company does today.
How has your process changed from Reengineering the Corporation to writing Reengineering Health Care?
I continue to research what real companies are doing–in the case of the Health Care book, I was looking at hospitals and doctors’ practices, in addition to new ways of delivering care. We can learn so much by just observing what works. But I spend more time today looking at how the behaviors of people have to change. I used to think that we could change the culture of an enterprise and the behavior of its people in a couple of years. I know now how hard it is to accomplish real cultural change. So I look closely at the existing culture of an enterprise and ask “how can I use the current culture to enable change?”. It’s a technique I learned from the behavioralist, Edgar Shein. In health care, for example, clinicians come to work every day to do good, not harm. So you have to show them that there is a better way to do their work, to produce better outcomes–and when given proof, they will change their behaviors. You don’t really want to change their culture or values.
What makes a good business book stand out from all the others?
A good business book is easy to read, has accessible ideas, and presents rich examples. Too many books are academic and try to accomplish too much. I recently read a manuscript from an eminent business school professor. I think he tried to put every idea he ever had into a single book. It was hard to find the point he wanted to make. A great business book also inspires. For people who really understood reengineering, the idea meant that work could be made more meaningful. In our research, we saw so many examples of useless work, work that produced no real value, people who were bored and tired of not being able to serve customers well. Reengineering holds out the promise that work can be substantially improved, made more interesting, more productive.
What are your three favorite business books, and why?
My favorite business books include Peter Drucker’s original book, Management. Drucker always spoke in simple, understandable terms. There are no diagrams or matrices in Drucker’s books, just clear, understandable principles. I always liked his definition of strategy: understanding where you are today, where you want to go tomorrow, and how you are going to get there. All the great strategic thinkers have just added to that framework. Alfred Sloan’s book, My Years at GM, is also on my short list. It’s a great history of how Sloan saved GM from ruin. He sets out the principles for managing a modern, multi-division company. But it also illustrates the strategy that got GM in trouble: just build a car for every market and the buyer will come. It was an arrogant view that lasted too long. Finally, I would read In Search of Excellence. It’s a book that has been much maligned because the companies it uses as examples to illustrate “excellence” no longer exist or have been absorbed into other companies. But the organizational model that it espouses–an enterprise is made up of structure, strategy, systems, staff (people), skills, management style, and shared values (culture)–is still a very relevant way of analyzing the strengths and weaknesses of a company. It was the first modern day business book that inspired managers to act.
James Champy is the author, with Michael Hammer, of Reengineering the Corporation (HarperBusiness, an imprint of HarperCollins Publishers).