Reengineering Management: The Mandate for New Leadershipby James Champy
Brings management fully into the reengineering revolution. Provides the guidelines that managers need to lead, organize, inspire, deploy, measure, & reward the new work that reengineering creates. Now that corporations have reengineered their operational processes, the management processes must change in accordance. These processes must focus on mobilizing, enabling, defining, measuring, & communication to achieve success. This will remain the definitive book on the subject for may years to come.A terrific read! A very well-written, wise & comprehensive guide for executives doing reengineering.
- HarperCollins Publishers
- Publication date:
Read an Excerpt
Management? Why Reengineer Management?
The results are in: Reengineering worksup to a point.
The obstacle is management.
The only way we're going to deliver on the full promise of reengineering is to start reengineering managementby reengineering ourselves.
Reengineering is in trouble. It's not easy for me to make this admission. I was one of the two people who introduced the concept.
Reengineering the Corporation has sold nearly two million copies worldwide since it was published in 1993, an astonishing success for a business book. But it's your bottom line, not ours, that ought to measure the success of any set of management ideas. And by that measure, there's much more reengineering to do.
Reengineering the Corporation was written to improve business performance by showing managers how to revolutionize their key operational processesproduct development, for example, or order fulfillment. And it has worked. I have the evidence of my own eyes and ears, from visits to scores of companies that practice reengineering. I have the testimony of more than 150 managers, gathered over 18 months' worth of interviews for this book. I have the evidence, too, of the first thorough study of the effects of the would-be revolution.
That study, "The State of Reengineering Report," was conducted in early 1994 by CSC Index, the strategic management consulting arm of the firm I head. Six hundred and twenty-one companies, representing a sample of 6,000 of the largest corporations in North America and Europe, completed an extensive questionnaire. The sample showed that fully 69 percent of the 497 American companiesresponding, and 75 percent of the 124 European, were already engaged in one or more reengineering projects, and that half of the remaining companies were thinking about such projects.
In North America, projects tended to be driven by competition and customer pressure, and focused therefore on processes with direct customer contacte.g., customer service (25 percent), order fulfillment (16 percent), and customer acquisition (11 percent). In Europe, the focus was on cost-cutting initiatives in manufacturing and its service-industry equivalents (23 percent). On both continents there were a smattering of projects across the full range of operational processes: 9 percent on links in the inbound supply chain, 6 percent on corporate information systems, 4 percent on product development, and so on.
Many companies reported big changes and reaped big rewards. An American mining company, for example, saw its revenues increase by 30 percent and its market share by 20 percent, while its costs went down 12 percent and its cycle time 25 percent. A European retail group gained a 50 percent improvement in cycle time and a 15 percent improvement in productivity. After reengineering its inventory-replenishment process, a U.S. clothing manufacturer doubled sales, increased its market share by 50 percent, and cut its cycle time by 25 percent. A North American chemical company cut its order-delivery time by more than 50 percent and its costs by more than $300 million.
There have been many equally dramatic success stories. On the whole, however, even substantial reengineering payoffs appear to have fallen well short of their potential. Reengineering the Corporation set big goals: 70 percent decreases in cycle time and 40 percent decreases in costs; 40 percent increases in customer satisfaction, quality, and revenue; and 25 percent growth in market share. Although the jury is still out on 71 percent of the ongoing North American reengineering efforts in our sample, overall, the study shows, participants failed to attain these benchmarks by as much as 30 percent.
This partial revolution is not the one I intended. If I've learned anything in the last 18 months, it is that the revolution we started has gone, at best, only halfway. I have also learned that half a revolution is not better than none. It may, in fact, be worse.
Our earlier book was largely about reengineering workthe operational processes performed by salespeople, clerks, factory and warehouse hands, repair people, engineers, technicians, customer-service folks, field representativesanyone and everyone in the value-adding chain. Now, in this book, I must shift my focus. This book is not about operational processes. It is about managing, written for managers, and (it may be reassuring to note) by a manager. It is about us, about changing our managerial work, the way we think about, organize, inspire, deploy, enable, measure, and reward the value-adding operational work. It is about changing management itself.
But who, exactly, is a manager these days? How do we know one when we see one?
In the wholeheartedly reengineered corporation, responsibility and authority are so widely distributed throughout the organization that virtually everyone becomes a manager, if only of his or her own work. Still, there's no ignoring two facts. First, as our study shows, the thoroughly reengineered corporation is as yet a rarity. Second, even a reengineering revolution leaves some people with more general authority and responsibility than it leaves others. The old pyramid may be flattened out, but the remnants are still discernible in these levels of managerial accountability:
* Self-managerspeople who may not think of themselves as managers because, in the last analysis, they answer only for the quality of their own work. Examples include customer-service representatives, researchers, salespeople, lawyers, and accountantsin short, just about everyone working individually or as a member of a team.
* Process and people managersthose who answer for the work of others, usually individuals, a team, or group of teams working closely with customers or on a specific process. An example would be a manager of a case team, a group of people who have among them all the skills needed to handle a specific processthe installation of a telephone, say, or the sale of an insurance policy, or the development of a new drug. In the reengineered workplace, employees often rotate in and out of this sort of managerial responsibility as the occasion demands.
Meet the Author
James Champy is chairman of Perot Systems consulting practice. He is a leading authority on organizational change and development and business strategy. He lives in Massachusetts.
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