Michael Hammer and James Champy became the uncontested “experts” to the corporate world for their blueprint of re-engineering. Why? What magical formula did these two individuals profess would make America great again? This essay will take a critical look at Hammer and Champy’s book, Re-engineering the Corporation in order to engage you, the reader, into a long awaited debate. Does this book have merit? Is it based on sound principles? It does not matter whether you agree or not, it only matters that you consider all the viewpoints.
“Moreover, image becomes all-important in competition, not only through name-brand recognition but also because of various associations of ‘respectability,’ ‘quality,’ ‘prestige,’ ‘reliability,’ and ‘innovation.’ Competition in the image-building trade becomes a vital aspect of inter-firm competition. ” (David Harvey, The Condition of Postmodernity: 1989 page 288) What image did Hammer and Champy paint with their book? Let’s begin with the title, “Reengineering the Corporation A Manifesto for Business Revolution”. It is my contention that they [Hammer and Champy] wrote this book to profit on their knowledge and as such used a title that would embrace both the employer [Reengineering the Corporation] and the worker [A Manifesto for Business Revolution].
While both the employer and worker are concerned with the never-ending battle of “power and control” in the workplace, the employer also strives for greater profits [private company] or in a public sector arena, providing services more efficiently. The worker on the other hand is concerned with compensation [wages and benefits], job security, health and safety and advancement within the organization.
However it is not only the title that is attractive to the Employer. The book cover has been designed to legitimize Hammer and Champy. Who would not want to read a book that was a “National Bestseller” printed by “HarperBusiness Essentials”? Furthermore, Peter Drucker [respected in the business world] has provided positive reinforcement that this is “An important book that describes the principles behind a new [my emphasis] and systematic [my emphasis] approach to structuring [my emphasis] and managing [my emphasis] work.” (Hammer /Champy: 2001) As well, the back cover not only provides the necessary kudos for Hammer and Champy, it also hints to the unspeakable in the corporate world, the fear of failing. If taken seriously, and who would not as Business Week has provided their approval which is then followed by a commentary [author unknown] articulating how this book will ensure your company’s prosperous future for “years to come”. (Hammer/Champy: 2001) And this is just the cover!
Hammer and Champy’s prologue provides the reader with the explanation of why reengineering was not a fad of the nineties but is still valid in today’s corporate world. They defend the process by stating that “Were it not for reengineering, many sectors of the U.S. economy would not be flourishing as they are now.” (Hammer/Champy: 2001 pg. 2) and then state that “It is particularly ironic that information technology has been proclaimed as the force behind the renaissance of U.S. industry; in fact, reengineering has been the key that unlocked the potential of this technology.” (Hammer/Champy: 2001)
So what came first, the chicken or the egg? Not only do they [Hammer/Champy] devalue the contributions of the advancement in technology; they also legitimize the U.S. as the hub of the world in industry and economics. Once again they have created an image of American companies that have risen from the depths of failure to successfully win over the “Japanese colossus.” [Hammer/Champy: 2001, pg. 1] But does this guarantee that they are right?
“Reengineering claims to empower workers, flatten the management hierarchy, and devolve the management function.” (IDRL 317 Student Manual: 2005 page 46) However Hammer and Champy contradict this statement in Chapter 6, “Who will Reengineer?” They clearly identify the individuals necessary for a successful process, beginning with the leader who is a senior manager, the process owner is also a manager and the steering committee comprised of senior managers. The reengineering team would be no larger than five and would be composed of internal individuals [those who know the process] and external [unbiased individuals]. Finally, they [Hammer/Champy] state that a reengineering czar is appointed and “serves as the leader’s chief of staff for reengineering. In principle, he or she should report directly to the leader, but we have seen almost every imaginable reporting variation. The czar has two main functions: one, enabling and supporting each individual process owner and reengineering team; and, two, coordinating all ongoing reengineering activities.” (Hammer/Champy: 2001, pg. 120).
It is interesting to note the specific wording “chief of staff” as this subliminally brings images of the American President and ultimately provides for more subconscious legitimacy of the process while the word czar is synonymous with tyranny. Hammer and Champy have identified that there have been problems with the “czar” as some have had forgotten the end goal and became too controlling. “Organizations must guard against this possibility and always remember that the work of reengineering has to be the line manager’s job.” (Hammer/Champy: 2001 pg. 121) In essence, except for one or two individuals who are familiar with the process [reengineering team] there is no room for the workers to be part of the decision making process. This then begs the question, how have they become empowered?
Hammer and Champy provide further discourse as they state on one hand that reengineering is not an exercise in downsizing while on the other hand adamantly state that a successful reengineering process flattens the traditional classical [vertical] organization into a horizontal or flatter organization. This new organization would increase flexibility, communication and decision making. Yet they have provided no evidence that the worker has been involved in the decision making process of who is reengineered out of a job, rather all the examples cited demonstrate that downsizing went hand in hand with reengineering.
Therefore while they [Hammer/Champy] may sell reengineering as the empowerment of the workers, I contend that it does not eliminate the power struggle for control [management vrs workers] but rather increases the Employer’s control as they begin to rely on a transient workforce. Job security is but a faded memory for many workers. “It would appear that the ‘flexibility’ urged by Hammer and Champy is being achieved not by reengineering but by the creation of a dual labour market consisting of a relatively well paid secure ‘core’ and a much worse off ‘periphery’: ‘The Canadian labour market is characterized by high turnover, short job tenure, and a high proportion of part-time, short-term, and other forms of “non-standard” workers.” (IDRL 317 Student Manual: 2005 pg. 47)
As with the Industrial Revolution, timing is everything and new technologies are the catalyst to “reengineering” [to use Hammer and Champy’s phrase]. Harvey’s views on time-space compression not only provide valuable insight into how globalization became the creator of new technologies, which then entrenched the “continuous efforts to shorten the turnover time of capital, to speed-up social processes and to reduce the time of decision-making in production.” (IDRL 317 Student Manual: 2005 pg. 52) Hammer and Champy contend that it was reengineering that advanced the field of information technology. However, their example of IBM cites that the organization reengineered to meet the needs of the customers, which also include the computers bought for home use. “By 1993, we were in a real crisis. Our repeated attempt to stem the downturn included plans to break up IBM into smaller, more manageable units.
But nothing had yielded the required results.” (Hammer/Champy: 2001 pg. 186) In reality, the world had already transformed into a global village with the use of the internet. [I was connected in 1989 and surfed the web albeit slower than today]. I contend that it was a matter of common sense and survival that forced IBM to “reengineer” their processes. I do agree with Hammer and Champy that it was the reengineering of processes and the flattening of the organization that enabled IBM to survive. However, as Harvey has stated that the compression of time and space has been an instrumental factor in today’s world. As such, it is important to acknowledge that multinational corporations could now move their workforces from industrialized nations to underdeveloped countries, areas where wages, working conditions and environmental laws were unregulated. Globalization began with Christopher Columbus and has its progress has only increased as the distance seems to shrink.
Reengineering History: Social Resonances and Business Process Reengineering written by Keith Grint discusses reengineering. “Although there are now many accounts of reengineering there appears to be a basic consensus about the critical issues involved. According to Hammer and Champy’s (1993b) account, which is by far the most popular in terms of book sales if nothing else, there can be reduced to 10 current practices that need reengineering: ” (IDRL 317 Book of Readings: 2005 page 52). While Grint has identified 10 current practices, this essay will only focus two of these practices.
The first practice concerns changing from the stovepipe organization [functional departments] to the flat organization [teams]. Is this a new approach to business as Peter Drucker has stated on the cover of their [Hammer/Champy] book?
“However, this is hardly novel, for the historical antecedents of the shift from functionally divided individuals to process teams are manifold. We can stray back towards the 19th century – well after Adam Smith had dealt the apparent death blow to all work processes without extensive divisions of labour – to note that only the British shipyards adopted the specialized and highly divided squad system while German, American and eventually Japanese yards maintained a much more process approach [Pagnamenta and Overy, 1984]. Even within the same country and industry there were wide variations: woollen cloth was produced in the early 19th century using a high division of labour in the ‘putting out’ system in the West of England but a very low division of labour in Yorkshire [Randall, 1991].” (IDRL 317: Book of Readings 2005, pg. 52)
Grint has analyzed the “Reversal of Power Relationship: From Superordinate to Subordinate Empowerment” (IDRL 317: Book of Readings 2005 pg. 55) whereby he states that contrary to Hammer and Champy, there can be no reversal of power as the workers have never lost their power in the first place.
“The upshot of this is that, contrary to the reengineering assumption, subordinates already hold the key to power while the superordinate must persuade them that they do not, if she or he is to remain in ‘power’. Hence, whereas reengineering suggests we should reverse the current status of power relationships, this approach suggests that what is necessary is to reinterpret the current status and to accept that the subordinates are already powerful, rather than attempt to reverse what already exists.”(IDRL 317: Book of Readings 2005 pg. 56)
It would be narrow-minded to state that Hammer and Champy only became the “gurus” for reengineering because of image, however, their approach to the new work organization is neither new nor the only model to choose from. New technology has opened the floodgates for a more flexible and diverse workforce. Globalization has become the driving force behind the need for corporations to reengineer. Hammer and Champy did not have a magical formula but they were the first individuals to put common sense to paper. It is something to think about when considering reengineering.
Reengineering the Organization, Study Guide, IDRL 317, 2005, Athabasca University
Grint, Keith Reengineering History: Social Resonances and Business Process Reengineering, IDRL 317 Book of Readings 2005 Athabasca University
Hammer M., Champy J. Reengineering the Corporation, HarperBusiness Essentials, 2001
Harvey D., The Condition of Postmodernity, Blackwell, 1989