The Characteristics of a Reengineered Corporation

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Reengineering initiatives typically lead to a business organization with these characteristics:

1. Business processes are simplified rather than being made more complex.

2. Job descriptions expand and become multi-dimensional.

3. People within the organization become empowered as opposed to being controlled.

4. The emphasis within the organization moves away from the individual and towards the team’s achievements.

5. The organizational structure is transformed from a hierarchy to a flatter arrangement.

6. Professionals become the key focus points for the organization, not the managers.

7. The organization becomes aligned with the end-to-end process rather than being focused on departments.

8. The basis for measurement of performance and compensation moves away from activity towards results.

9. The role and purpose of the manager changes from supervisor to coach.

10. People in the organization no longer worry about pleasing the boss–they focus instead on pleasing the customer.

11.The organization’s value system transforms from being protective to being productive.

Reengineering is not solely about creating new business processes–it focuses on creating a new company.

Taking each of these points in turn, in a reengineered company:

1. Business processes are simplified rather than being made more complex.

Companies that reengineer invariably end up dismantling departments and instead put together process teams that handle work logically rather than within the artificial department constraints. Inevitably, the process team approach will be more logical and make more sense than any other approach.

Process teams within a reengineered organization can be of any shape or size. The work to be done dictates the optimum size and structure of the process team–not any artificial constraints, preferences of the managers or external factors.

2. Job descriptions expand and become multi-dimensional.

Before reengineering, a worker may perform one task repetitively all day every day, without ever giving thought to the big picture perspective of what is being created.

After reengineering, the worker is part of a process team that has full responsibiliy for the entire process. In that situation, every team member has an appreciation and familiarity with each step in the process, and will more than likely be required to perform several of those steps at different times. Thus, work becomes multi-dimensional, more rewarding and more closely linked with the end result. There’s ownership in the process output.

3. People within the organization become empowered as opposed to being controlled.

Reengineered companies don’t want people who follow the rules–they value employees who can set their own rules to achieve results. Therefore, reengineered companies look for employees who are self-starters, self-disciplined and who are motivated to achieve.

Another way of looking at empowerment is to consider what happens when a supervisor visits an employee. In a traditional company, the real work screeches to a halt while the employee focuses on satisfying the supervisor. By contrast, in a reengineered company, the employee is thinking, interacting, using judgment and making decisions on the basis of what will create a satisfied customer. The supervisor becomes a resource towards that objective.

4. The emphasis within the organization moves away from the individual and towards the team’s achievements.

Reengineering effectively removes the artificial boundaries put there by department structures. Instead of being focused on a single aspect of the delivery of value, a process team is formed that assumes total and complete ownership of the process.

Teams may be structured in many different ways:

As case teams which handle recurring tasks

As process or virtual teams–for as long as required

As one-person teams

5. The organizational structure is transformed from a hierarchy to a flatter arrangement.

In the team environment made possible by reengineering decisions are made on a consensus basis rather than by a manager. That has the indirect effect of reducing a manager’s role–and their need to be part of the loop.

Invariably, organizational structure is less of an issue at reengineered companies than industrial-age organization. Equally, that leads to a flattening of the traditional management structure. With work being organized around processes and teams, the organizational structure becomes a secondary issue.

6. Professionals become the key focus points for the organization, not the managers.

Reengineering will always change the boundaries between different kinds of work. In the past, the past, the roles filled by the manager–checking, reconciling, monitoring and tracking–would most likely have been at the center of operations.

After reengineering, the creation of value becomes the main focus point. As such, the people who do that most effectively will become the center of focus. Teams will do whatever is required to maximize the efficiency of professionals with the skills applied.

Overall, it’s a more positive approach to business. Invariably, mush of what managers did in the past was unproductive but considered necessary to maintain order. Reengineered teams have a totally different approach people are working because they’re motivated to achieve.

7. The organization becomes aligned with the end-to-end process rather than being focused on departments.

When a process team assumes responsibility for performing a job, the organization as a whole becomes focused on results rather than activity. There’s also a greater sense of completion and achievement for the workers because they can identify directly with a result they care about. That also encourages growth and learning for the team members.

8. The basis for measurement of performance and compensation moves away from activity towards results.

Instead of being paid for their time, workers in a reengineered company are paid for their results achieved. Most often, this tends to be structured as a base salary and a performance-based bonus–which can grow to a substantial level if outstanding results are achieved.

In reengineered organizations, performance is measured solely on the basis of the added value created. The compensation system recognizes and rewards that value creation process.

In the reengineered business environment, advancement from one position within the company to another is not given as a reward for previous results. Instead, it’s entirely ability driven.

9. The role and purpose of the manager changes from supervisor to coach.

Process teams don’t need bosses–they need coaches. A boss allocates work. A coach helps the team solve problems, and facilitates achievement by providing the requisite resources and other inputs. In short, managers in reengineered companies take pride in the accomplishments of the teams they are responsible for assisting.

10. People in the organization no longer worry about pleasing the boss–they focus instead on pleasing the customer.

In the industrial-age companies, the average employee’s attitude was: “My boss pays my salary and determines whether or not I get promoted. Therefore, I’ll concentrate on keeping him happy.”

In a reengineered company’s process team, the attitude becomes: “Customers pay my salary. I’m not paid just to turn up. I get paid according to the amount of added value I create. Therefore, to make more, I’ve got to create more satisfied customers.”

11. The organization’s value system transforms from being protective to being productive.

In a protective organization, every manager wars with every other manager over issues like blame for problems, jurisdiction, fault and allocation of resources.

In a productive, reengineered company, everything in the value system is centered around the creation of customer value. Everything is aligned with and judged by that criteria alone:

The way people are paid

The way performance is evaluated

The way promotions are made

The way people actually spend their time

Changing corporate value systems is always going to be a big part of any reengineering program.

Most companies that have successfully navigated reengineering programs find there are five key roles that need to be filled:

Leader
↓
Process owner
Reengineering Team
↑ ↑
Steering Committee Reengineering Czar

Ideally, the Leader will appoint the Process Owner, who will convene a Reengineering Team to reengineer the process, with assistance from the Czar and under the auspices of the Steering Committee.

The Leader–must be a senior executive of the organization who has enough clout to cause the whole organization to turn itself upside down and inside out while reengineering occurs. The leader must also be a consensus builder–persuading people to accept the disruptions reengineering will bring.

The Process Owner–will usually be a senior manager (often with line responsibility) who has prestige and credibility. The process owner will make reengineering happen at the individual process level. Most often, process owners are already intimately familiar with one of the functions involved in the process that will undergo reengineering.

The Reengineering Team–carries out the heavy lifting. These people actually get their hands dirty figuring out the nuts and bolts of the nuts and bolts of the reengineered process. The best teams have between five and ten members–a mix of outsiders (people who don’t currently work in any of the functions being reengineered) and insiders (people who do work in those areas).

The Steering Committee–is a broadly based collection of senior managers of the organization who:

Set priorities for the Reengineering Team

Decide the allocation of resources

Resolve any conflicts that arise

Monitor the results achieved

The Reengineering Czar–is responsible for management and coordination of all the reengineering teams working within the organization. In effect, the Czar keeps hands-on tabs on the state of play in each reengineering initiative, and provides that perspective to the leader. The Czar acts both as a resource to each reengineering team and as a custodian of the bigger picture issues.

The key points to keep in mind about this structure are:

Processes, not organizations, are the object of reengineering. Therefore, companies don’t reengineer their sales or manufacturing departments–they reengineer the work these departments do.

Information technology is the main enabler of reengineering processes. That will deliver marginal improvements at best. Instead, reengineering is focused on breakthroughs–quantum leaps forward.

Reengineering is never focused on fixing old processes. That will deliver marginal improvements at best. Instead, reengineering is focused on breakthroughs–quantum leaps forward.