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.
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.
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