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‘Re-Engineering’ Authors Reconsider Re-Engineering

January 17, 1995

THE CONCEPT WAS compelling: To survive global competition, companies had to radically redesign work, combining fragmented tasks into streamlined processes that saved time and money. Re-engineering _ a term coined by Michael Hammer and James Champy in their 1993 bestseller, ``Re-Engineering the Corporation″ _ became the hottest management buzzword of the ’90s.

But the book, for all its theoretical elegance, glossed over the massive career disruptions caused by the process. Re-engineered work usually required fewer workers and far fewer managers. Managers resisted, stymying many re-engineering efforts _ which is the subject of Mr. Champy’s new book, ``Re-Engineering Management.″ (Dr. Hammer is also readying a sequel that addresses the trend’s human implications.)

Since their book, Mr. Champy has focused on consulting and Dr. Hammer on giving seminars. They reunited last week for a conversation about re-engineering and careers.

Q. In retrospect, do you think you underestimated the effect re-engineering would have on careers and the resistance it would meet?

Champy: I didn’t see management to be the obstacle it has been. We’ve learned how to do the redesign. But the redesign, as brilliant as it may be, doesn’t get results because of managerial thought and ideology. Either top management isn’t aligned behind the change, or others are threatened by a loss of power.

Hammer: Whatever works for the company as a whole is what senior executives need to accomplish. Reengineering really improves the lot of people on the front lines. The true losers turn out to be the folks in the middle, because we need far fewer of them. And what they need to do is very different from what they’re accustomed to, and many of them are hopelessly unqualified.

Q. In light of that, why wouldn’t they resist?

Champy: Because some of those managers at some point recognize that they have no choice but to re-engineer, or else there will be no business or jobs. In the end, they do this for one of two reasons: fear, or someone comes with a new vision that excites the organization. I find the latter happens less often.

Q. You cited as many as six tasks rolled into one re-engineered job. Are you concerned that people in these jobs could burn out faster?

Hammer: That is a real risk. In the aftermath of re-engineering, the individual is no longer a cog in the wheel; he is the wheel. We’re touching something deep within people: their need for fulfillment through their work. The trouble is, people overdose on that. This is the kind of quote I get from people: ``This is the most wonderful thing I’ve done in my life, but after two years of 60-hour weeks, I’m tired.″

Champy: Some of the breathlessness about overwork is that some companies are just downsizing and calling it re-engineering. They haven’t changed a damn thing. I was doing a talk show, and a guy called in from Houston and said: ``My managers say they’re doing re-engineering; all I know is I’m working twice as hard and twice as long, they’ve laid off half the people and we’re having a better year than we’ve ever had before. Our managers are going to get bonuses, but I’m getting paid the same.″

Q. You list performance as one of the core values by which people should be judged and rewarded. But you also say it is no longer feasible to guarantee a job for good performance. What does performance get you today?

Hammer: In the old corporation, what I needed to guarantee my future was hard work and loyalty. Those aren’t worth John Nance Garner’s bucket of warm spit any more. You performed yesterday? I’m really glad to hear it; that’s why I paid you. Tomorrow? Hey, everyday we have to ask, ``Who do we need tomorrow, and are you the guy?″ You have to get results, and you have to continually update, train and develop yourself so that you’re ready for tomorrow’s jobs. If you do that, I’m going to run after you because you’re the kind of person I need.

Q. You have written about the need for a new social contract between employer and employee. What does this contract look like?

Champy: The first piece is, we are going to invest in your development _ not train you like a welder but invest in your development so you are something more. Most corporate training functions are zeros compared to what we need. The second piece is the portability of benefits from company to company. If I’m going to spend five years here, I want the credits, whether it’s for vacation time or, more importantly, for pensions.

Hammer: The biggest lie told by most corporations, and they tell it proudly, is that ``people are our most important assets.″ Total fabrication. They treat people like raw material. If you’re serious about treating people as an asset, we’re looking at a dramatic increase in investment in them.

Champy: Look, we need their hearts and minds because we’re asking them to be more accountable _ we’re giving them more authority. We’re brutalizing the work force right now during this transitional period. If we’re going to get what we need, the brutalization has to stop. I think it will when we dramatically downsize and learn to do much more with much less. Then we can settle into the new social contract with our people and be more stable.

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