What HBR won’t say: Why BPR failed

It’s not a new idea that there is something very wrong with the traditional management that is practiced in most established organizations. In 1993, Michael Hammer and James Champy wrote that American companies had become “bloated, clumsy, rigid, sluggish, non-competitive, uncreative, inefficient, disdainful of customer need and losing money.” Even then, it was clear that traditional management needed to be replaced by something different.

But what?

In 1993, traditional management jumped on the bandwagon known as business process reengineering (BPR). The initial idea as put forward by Tom Davenport in his book Process Innovation (HBSP, 1992) was sensible: to reengineer processes, essentially a new fix to the system—particularly processes that took advantage of technology to minimize handoffs and enable smaller teams to work on tasks from start to finish. Such process improvements could lead to modest gains in productivity, although the change was hardly the kind of reform needed to deal with the profound structural problems of the traditional workplace.

Nevertheless, Michael Hammer and James Champy were able to hype this modest proposal in their book Reengineering the Corporation (HarperBusiness, 1993) into something “radically new,” “a fresh start,” “something entirely different.”

The claim was attractive to traditional managers for several reasons. For one thing, it was a technology fix: managers didn’t need to change their behavior. They could sit back while technology solved the problem. For another, the reengineering could be done by experts—even by reengineering “czars.” The fact that managers could hire others to do the hard work of reshaping the organization fit the prevailing Taylorist culture.

It offered CEOs an attractive image of immaculate top-down power, since the “almost perfect model” for the reengineered organization was the National Football League (NFL) team: the head coach called in every play, and the players flawlessly executed his will. It also happily provided management consultants with “the next new thing” and opportunities to market newly minted prowess in process reengineering.

The downsides of the approach were mirror images of the advantages. Because the management problems organizations faced were not inherently problems of technology, the introduction of technology did little to address root causes. Being designed by “experts” who didn’t always understand the requirements of the work, the solution often didn’t fit the specific workplace. Because the process changes were introduced without basic change in the behaviors of the managers or the workers, the problems caused by those behaviors continued.

Business process reengineering was something done to the workforce. For most workers, it made jobs worse. Because business process reengineering didn’t affect the goals of business, which continued to focus on improved efficiency through downsizing and outsourcing, often using fewer, less educated, and cheaper people, the social problems of the workplace were aggravated. Nor was thought given to the strategic implications of the wholesale shipping of expertise overseas to countries where workers could be more easily manipulated.

The metaphor of the firm as an NFL football team, with the head coach calling in every play, revealed how little Hammer had grasped the need for greater agility and innovation in a rapidly changing environment. It was assumed that the world was knowable and predictable. The guy at the top could figure out what was going on and make all the key decisions.

In fact, a principal attraction of business process engineering was precisely that under the guise of being something entirely different, it was more of the same. It was another superficial fix to a system that was suffering from rot from within. It was a bandage on a cancer.

After a few years, disillusion set in with BPR when it failed to produce the promised results. But Harvard Business Review was undeterred. In March 1999, it published a conversation with James Champy, entitled “Reengineering Dead? Don't Believe It”.  Apparently BPR was a success, with even more opportunities to do more reengineering.  We needed more BPR, not less.

In November 2001, Harvard Business Review published another article trying to pump life back into BPR. It was written by Kirsten Sandberg and entitled, “Reengineering Tries a Comeback--This Time for Growth, Not Just for Cost Savings.” The article bravely claimed: “Despite the negative track record, reengineering is back at the forefront of managerial conversations.”

In a sense, both these articles were right. BPR had indeed failed, but it wasn’t going away. Even today in 2010, it remains at the forefront of traditional managerial conversations, because traditional management is essentially about the manipulation of things through processes, rather than interaction with people through conversations.  

This leads to a characteristic way of managing: top-down bureaucracy. Once the firm sees itself in the business of producing things, a command-and-control bureaucracy becomes the logical way to structure and manage it. Work is carried out by following a plan devised by management, communications are conducted on a need-to-know basis, and productivity gains are made by downsizing and outsourcing.

The problem? It doesn't work any more. The workplace that ensues from this way of organizing is less productive than it could be, dispiriting to the people doing the work, and dissatisfying the customers they are supposedly doing it for. The rate of return on the assets of US companies is now only a quarter of what it was in 1965.

What the champions of business process reengineering and HBR failed to see was that the fundamental problem of the workplace wasn’t this or that particular system or process. The deeper problem lay precisely in thinking about work primarily as an internally driven set of processes, using people who could be manipulated, rather than viewing the workplace as an interaction of thinking, feeling, laughing, caring human beings whose talents, energies, and ingenuities are fully engaged in finding ways to delight clients.

When process engineers start talking about work as an improved system of processes, they are already well on the way to aggravating the problems they were trying to solve. They had lost sight of what work should be about—what it takes to make a truly productive and vibrant organization.

And where was the client? As long as the purpose of business process reengineering is conceived as the efficient production of goods and services, it is inevitable that the client will end up getting the short end of the stick and have to spend vast amounts of time waiting on the phone to have a confused conversation with some call center on the other side of the planet.

Yet there are deeper psychological reasons for sticking with traditional management. The assumptions of traditional management help preserve the illusion of being in control. A feeling of being in control is reassuring. Wall Street reinforces the illusion by rewarding companies that are able to present a facade of being in control.  Objective evidence is irrelevant. The comforts of the mutual illusion are preferred to the discomfort of recognizing that traditional management has failed.

You won’t however read this in HBR. HBR has too much invested in the status quo of traditional management. Too many established dogmas would have to be thrown out. You should no more expect Harvard Business Review to abandon the values, attitudes and philosophy embedded in traditional management than you should expect the Vatican to announce that it has begun to have second thoughts about the Virgin Birth.

To learn more about radical management, go here.

 

Comments

[Christopher M. Janney]

Another great one! I will say that in general I am a supporter for HBR and enjoy most of their articles. But I can also say that you bring up some interesting points in questioning the articles that are published and the support that is often thrown in one direction or another.

I completely agree with you on your observations about BPR. It has definitely allowed managers to miss the human component of business, and in turn that affects the customer population (in most cases negatively). I will say, however, that I think BPR has its place as a part of the overall solution process but the people of the organization must be involved, and behaviors must change. It is definitely both systemic and systematic, and until that realization takes place, there will continue to be failure. That goes for consultants as well. There is no one "silver bullet" that will take care of everything.