All Hail Reengineering the Corporation, but What About the People

February 1, 2012

After only being into Reengineering the Corporation a couple of chapters I found myself thinking this makes perfect sense. Why take eight to 10 steps to accomplish a task when it could be done in five or six. But, at the same time I realized there was a person associated with all of those steps and when you “reengineer” you do gain efficiencies, but you lose the people. Good for the company. Not so much for the employee.

After researching I discovered that I was not the only person who had this thought. Apparently even one of the authors, Hammer in a 1996 Wall Street Journal article by J.B. White said, “I wasn’t smart enough about that. I was reflecting my engineering background and was insufficiently appreciative of the human dimension. I’ve learned that’s critical.”

The other observation I had about Reengineering the Corporation is it says in Chapter 2 that even successful companies should look at reengineering using the examples of Hallmark and Wal-Mart. While these companies are successful I personally subscribe to the theory if it ain’t broke, don’t fix it. Coke would be a good example of this. Even though Coke says the introduction of New Coke in 1985, was actually the best thing to happen to the company (“Ten Years Later, Coca-Cola Laughs at ‘New Coke’”, Business Day, April 11, 1995, by Glenn Collins), I refuse to believe that a company, losing market share to a major competitor would intentionally launch a product, only to have to admit it made a mistake. They did something similar this Christmas, by putting Coke in white and silver cans, which prompted confusion among customers who thought it was Diet Coke. Sometimes, you don’t need to fix something if it’s not broken, but Coke may need to reengineer it’s marketing department.

What I’m getting to is the “why.” Why was Reengineering the Corporation such a big hit, and why do companies still subscribe to its philosophies? You have to look at what was happening at the time with the onset of computers and the rapid pace of change. In an article by Dr. Howard Eisenberg published in the May, 1997 issue of “Quality Progress,” he wrote: “The PC and telecommunication technologies have not only changed the processes used to produce goods and services, but also how those processes are managed. For example, the traditional management hierarchy no longer makes business sense because the critical wisdom and information needed to run the new processes are no longer containable at the top. In addition, automation and other advances have reduced the number of employees needed to produce goods and services, resulting in unemployment.”

That is why Reengineering The Corporation and its suggestions are still relevant today because technology and processes continue to evolve. Products are now introduced seemingly overnight and can almost disappear just as quick. Companies that are not “lean and mean” will not survive. This is, for better or for worse, reflected in today’s job market. It is rare to find an employee who stays at a company for 40 years and then retires, like my father. Instead people change jobs frequently either out of necessity or want. It is important for the people/engineers who are making the process better to remember the people in the process. There is a great article in the MIT Sloan Management Review from Spring 2009 titled “Downsizing the Company without Downsizing Morale,” by Aneil Mishra, Karen Mishra and Gretchen Spreitzer. It looks at how companies like General Motors developed a culture of respect and trust in the reengineering of years past, but how almost everyday now seems to be a crisis and it’s becoming more difficult to keep employees engaged and believing the reasons behind the change.

The bottom line is companies will continue to reengineer and follow the philosophy of the book mainly because change is a constant. And, because change is difficult to accept by people, it will continue to be a struggle.

By Helen Todd
UAB IEM, EGR Class 644

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One Response to “All Hail Reengineering the Corporation, but What About the People”

  1. I think the review and evaluation of Hammer and Champy is good. The thoughts about not changing something just because it is working are interesting. When IBM was shipping the Selectric typewriter, they were the dominant world player in the field. What if they had held fast to that thought? Coke’s position is a unique one in that it has a dominant command of the market, but also note the varieties of carbonated and non-carbonated drinks they have had to introduce to keep up with consumer preferences. Change is necessary because, as a culture, people will change. In this age of rapid development, continual improvement or product and process is necessary for companies of all size. A new competitor could rise up and put you out of business within just a few short years, just ask Movie Gallery and Blockbuster what Netflix and Redbox has done to them. Failure is not necessarily a bad thing; Edison said himself that he learned 10,000 ways not to create a light bulb. When the Braves finally won the World Series after decades of losing baseball, owner Ted Turner said that he wasn’t spending time losing, he was spending time learning how to win. I believe that change, experimentation, continual improvement and associated failures are inevitable and preferred to the status quo.

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