Five Ways You Can Improve Your Organization

If you want to improve your business, challenge your core assumptions and then reengineer.

Process Reengineering

Traditional business processes are based on the simple-task, complex system in mind. An individual’s work scope was narrowed to very simple tasks that required minimal training. The organization was comprised of complex systems of simple tasks. While this model seemed to work well with the Industrial Revolution, it does not scale well. Simple tasks seem easy to manage when there are only a few tasks, supervising, monitoring and checking become more difficult when many more tasks need to be done. This increases the need for more management, but a larger management structure in proportion to the rest of the organization. The results are higher overhead, lower profit margins and lower ROI. (3)

When you see excessive communication between business units, combine some or all of those processes as they may have been artificially fragmented. If you encounter high levels of inventory, synchronize supplier and/or customer processes with your own.

Team Reengineering

Teams need to be enabled to take on more of the workload that traditionally belonged to the manager. This requires they receive broader roles, more responsibility and increased authority. Expand their role by moving them outside their simple, isolated task and into a much larger portion of the value chain. The team follows the product through its lifecycle and has much more visibility to systemic problems that were previously hidden. The team is given responsibility for the product collectively and, when possible, communicates directly with their customer. The additional authority granted should be sufficient to empower the team to fulfill the larger roles and responsibilities already mentioned. (5)

Leadership Reengineering

Managers need to empower their employees to work a larger scope than they did traditionally. Managers also need to move to more of a supervisory role by developing teams to design, allocate, monitor and control their own work. The ability to enable others to improve is a skill that you should cultivate within your managers. Where a traditional manager can manage around 7 people, a hands-off supervisor can supervise around 30. (3) Effective leaders continuously improve through life-long learning and should view continuous education as a minimum requirement to maintain current effectiveness. (4)

“It is important for managers and leaders to recognize what they have to do, and what they often have to do is enable real operational change.” , stated Jim Champy, author of “Reengineering the Corporation” in a recent phone interview. “In the past, many leaders downsized organizations, but didn’t really reengineer.” (2)

Information System Reengineering

Information systems were often built to support the existing poorly designed organizational model and thereby helped to entrench this inefficient way of operating within the organization. Many Enterprise Resource Planning (ERP) software packages still encourage this mindset by offering small-work, low visibility modules.

Understand that the off-the-shelf ERP solutions will not solve all your business problems. In a rapidly changing world where customer expectations increase every year, carefully and iteratively reengineer your information systems to match your customer’s needs. ERP provides much security and a solid foundation to build from but it is not enough. The SAPs and Oracles of the world are not going to solve our problems. (2) Custom development that builds upon existing ERP systems enables a company to respond rapidly to changing demand while leveraging the same sound technological foundation that got many organizations to where they are in the first place. Custom systems are an excellent way to fill in the gap between what is currently available and what is needed.

Business Model Reengineering

If individual tasks can be optimized, and operational systems within organizations can be reengineered, why can’t the same be true with an entire business model? Technology is a wonderful enabler, one that supports near-zero marginal-cost transactions and opens up entirely new possibilities.(1) We see this playing out dramatically in digital media distribution, such as music, video and books to name a few.(2) Look for ways to change your model entirely.

If you want to improve your business, if you want to get better, challenge all assumptions about your process, teams, leadership and even your business model.

– Chris Acree

(1) Anderson, Chris. Free: The Future of a Radical Price. Hyperion, 2009.

(2) Champy, Jim, author of Reengineering the Corporation: A Manifesto for Business Revolution and other best sellers. Personal interview. 30 Jan. 2012.

(3) Hammer, Michael and James Champy. Reengineering the Corporation: A Manifesto for Business Revolution. HaperBusiness, 2003.

(4) Kotter, John P. Leading Change. Harvard Business Review Press, 1996.

(5) Pellerin, Charles, J. How NASA Builds Teams: Mission Critical Soft Skills for Scientists, Engineers, and Project Teams. Wiley, 2009.