Summary: Reengineering the Corporation

Review and Analysis of Hammer and Champy's Book

BusinessNews Publishing

• Publisher: Must Read Summaries
• Year: 2016
• eBook ISBN: 9782511016336
• Topic: Business
• Subtopic: Organisational Development
• Index: Business

The must-read summary of Michael Hammer and James Champy’s book: “Reengineering the Corporation: A Manifesto for Business Revolution”.

This complete summary of the ideas from Michael Hammer and James Champ’s book “Reengineering the Corporation” shows how it is important to forget about business traditions and invent a new, process-focused business organisation that leads to better performance. In their book, the authors explain how you can use your knowledge to develop a new organisation that is as optimal as possible. By re-engineering the rules of business, you will be able to gain a true competitive advantage.

Added-value of this summary:
• Save time
• Understand the key concepts
• Expand your business knowledge

To learn more, read “Reengineering the Corporation: A Manifesto for Business Revolution” to prepare your business for the future and achieve success.

Summary of Reengineering the Corporation (Michael Hammer & James Champy)

Section 1 : The Reengineering Concept

Main Idea

Reengineering is defined as the fundamental rethink and radical redesign of business processes to generate dramatic improvements in critical performance measures – such as cost, quality, service and speed.

In practice, reengineering means to start over with a clean sheet of paper and rebuild the business better.

Supporting Ideas

To succeed in today’s global economy, corporations must have organizational structures and business processes that:

1. Are fast
2. Deliver high quality consistently.
3. Are flexible.
4. Are low cost.

Traditional businesses are unlikely to be able to deliver on these requirements because of the way business management has evolved. The four key stages in the evolution of business management have been:

• Stage 1 – 1776
  Adam Smith published The Wealth of Nations. In this, he suggested the specialization of labor as a way for workers to achieve greater productivity. Smith’s ideas suggested efficiency could best be achieved by breaking large jobs down into small tasks which could be performed repetitively.
• Stage 2 – 1820s
  The railroad companies introduced bureaucracies to avoid collisions on single-track lines – formal operating procedures, centralized management and a rule for every contingency. This was the forerunner of the command-and-control system still in use today – where there are workers and supervisors to keep things organized.
• Stage 3 – Early 1900s
  Henry Ford introduced the assembly line – workers performed one tiny step in a complex process where the work is brought to the worker rather than the other way around– while Alfred Sloan created small, decentralized management teams for GM so that huge, sprawling operations could be managed efficiently.
• Stage 4 – The 1945 – 1960 Era
  The hierarchical or pyramid organizational structure became popular as the best way to match production capacity and demand for mass produced consumer goods. Functional middle managers were added to provide control and management.

These principles were all appropriate for their times, but in today’s environment, they inevitably result in:

1. Delay and errors.
2. Rigidity.
3. High overhead costs.

The reality is corporations cannot move into the new competitive environment by adapting the old management methods – a complete and sweeping redesign is called for. Reengineering delivers those changes.

The key rhetorical question of reengineering is:

“If I were re-creating this company today, given what I know and the current level of technology, what would it look like?”

Inevitably, the answer to that question will have four key elements:

1. A focus on fundamentals.
   Addressing the issue of precisely what it is the corporation does, why is it done the present way and what are the tacit rules and assumptions embedded in present practices. Reengineering ignores “what is” and concentrates on “what should be”.
2. A radical redesign element.
   Reengineering is about reinventing the business – not making superficial changes or marginal enhancements to the old ways of doing things.
3. The potential for dramatic results.
   Reengineering leads to quantum leaps in performance – not incremental improvements.
4. A business process orientation.
   Reengineering evolves around business processes – not tasks, job descriptions, people or structures. A business process takes an input or inputs and generates an output which is of value to the customer. A business process only works if it generates added value, not internal activity.

Generally speaking, three types of companies undertake intensive reengineering programs:

• Companies that find themselves in deep competitive trouble – and who often require an order of magnitude improvement somewhere in their operations to be able to compete with others in their field.
• Companies with managers who can see problems arising a little further down the road they are traveling on – and who want to begin reengineering before all competitive advantages they possess evaporate.
• Companies with managers who are ambitious and aggressive – who see reengineering as a way to position the company to extend their lead over their competitors.

The reengineering concept:

• Should not be confused with automation – since doing the wrong things more efficiently will make few, if any, improvements to a bu...

Table of contents

• Title page
• Book Presentation
• Summary of Reengineering the Corporation (Michael Hammer & James Champy)
• About the Summary Publisher
• Copyright