MANAGEMENT GURU RE-ENGINEERS MESSAGE
By Joseph B. White, The Wall Street Journal, Boston
Michael Hammer, the management guru whose ideas
launched tens of thousands of pink slips, wants to
drive home a new message that some of his followers
have missed.
At a recent conference in Boston, the self-
proclaimed "founder of the re-engineering movement"
appeared before 437 managers with Donald Borwhat,
senior vice president for human resources and public
relations at GE Fanuc Automation North America. The
joint venture of General Electric Co. and Fanuc Ltd. of
Japan is re-engineering. It is embracing Mr. Hammer's
idea that corporate hierarchies should be smashed and
replaced with streamlined "process" teams made up of
marketing, manufacturing, sales and service people that
use computers to combine tasks and that work without a
lot of supervisors.
But Mr. Borwhat told the gathering that GE Fanuc,
unlike a lot of companies, wasn't laying off workers.
The results: GE Fanuc has boosted revenue by 18 per
cent during the past two years, while the number of
employees has risen by 3 per cent.
"What can I say?" Mr. Hammer asked, turning toward
the managers whose companies paid $2,200 (U.S.) a head
for them to attend this three day meeting. "It's
right. The real point of this is longer-term growth on
the revenue side. It's not so much getting rid of
people. It's getting more out of people."
Three years after Mr. Hammer and consultant James
Champy launched this decade's hottest management fad
with their best selling book, Reengineering the
Corporation: A Manifesto for Business Revolution, Mr.
Hammer points out a flaw: He and other leaders of the
$4.7 billion re-engineering industry forgot about
people. "I wasn't smart enough about that," he says.
"I was reflecting my engineering background and was
insufficiently appreciative of the human dimension.
I've learned that's critical."
So have a lot of businesses, disillusioned by the
backlash against lay-offs, overwork and constant
upheaval stemming from their efforts to adopt Mr.
Hammer's model. Companies are learning that simply
cutting staff, rather than reorganizing the way people
in different functions work, won't yield the "quantum
leaps" in performance Mr. Hammer and Mr. Champy
heralded in their book.
Corporate executives want consulting companies to
provide strategies to boost growth or spark product
innovation. That is one reason consultants are jumping
on the surging popularity of computer network
technology that makes it easier for engineers to share
new product ideas and helps sales and marketing staffs
find potential customers buried in corporate data
warehouses.
"Companies are saying, 'Don't cut me any more,'"
Gartner Group analyst Bonnie Digrius says.
Companies that just want to merge departments to
cut costs are increasingly able to do so without
consultants. Software maker Qad Inc. will soon include
the flow diagrams used to map out tasks in a re-
engineered company as part of its business software,
automating the functions of re-engineering consultants.
As a result, gurus like Mr. Hammer and consulting
giants like Booz Allen & Hamilton, Andersen Consulting
and CSC Index are scrambling to remodel their re-
engineering vehicles. They may even choose to trade in
for new models as they look for the next big thing: hot
candidates include "knowledge" management, enterprise
software that links workers together, intranet
technology and growth "strategy."
"People are starting to realize that changing how
people work is more than re-engineering," says Thomas
Davenport, a business professor at the University of
Texas at Austin, who is a former associate of Mr.
Hammer's and a re-engineering pioneer. But Prof.
Davenport also warns against relying on any single
technique as the solution to business problems. "I
hope there comes to be some skepticism about the next
big thing," he says. "The next big thing will get us
into trouble."
The search for something better has caught fire as
the appeal of re-engineering has waned. When Boston-
based consultants Bain & Co. asked executives at 1,000
companies this year to rate various management tools,
re-engineering didn't score above average in any of the
five major categories, such as improving financial
results, building market share, boosting growth,
improving competitive stance or promoting teamwork. In
1994, re-engineering led four the five, Mr. Bain say.
Mr. Hammer says he began hearing concerns about re-
engineering shortly after Reengineering the Corporation
became a hit. "More and more people were calling me up
and saying: "The design is great, but I'm encountering
resistance,'" he says. By 1995, he and his staff had
decided to expand their three day "basic training
class" to five days. The extra two days are for
"people issues," he says. Earlier this year, Mr.
Hammer formed a subsidiary called Workplace
Transformation Inc. to educate frontline workers in the
why and how of re-engineering.
Mr. Hammer bristles when asked to respond to
critics who say his ideas have led to layoffs and
demoralization among workers. Downsizing isn't re-
engineering, he says. "I don't accept blame for the
misappropriation of the term."
(Re-printed in The Globe and Mail, November 26, 1996)
