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Michael Hammer & James Champy: Business Process Reengineering

Continuous improvement had been around for a long time. And that simply built on generations of work to improve the way businesses do things, going back to the Gilbreths and Taylor. But in 1990, a Harvard Business Review article exploded the idea of incremental change, with its provocative title: Reengineering Work: Don’t Automate, Obliterate. It was written by an MIT engineer called Michael Hammer.

And three years later, the revolution was well underway, with a book he wrote with top management consultant, James Champy. Reengineering the Corporation: A Manifesto for Business Revolution was as much a rallying cry for the consulting industry as anything else. But in the few years that followed, hundreds of companies employed thousands of consultants to reengineer their processes and, in so-doing, remove tens of thousands from their workforces.

Michael Hammer & James Champy
Michael Hammer & James Champy

Michael Hammer

Michael Hammer was born in 1948 and grew up in Maryland. He went to MIT to study maths, receiving his BS in 1968. He then took an MS in Electrical Engineering in 1970, followed by a PhD in Computer Science, that he was awarded in 1973.

He remained at MIT becoming a professor in the Computer Science department and also a lecturer at the MIT Sloane School of Management. From there, he formed links with a Boston-based consulting firm, Index, led by founder, James Champy.

In 1990, he authored one of the most influential Harvard Business Review articles,  Reengineering Work: Don’t Automate, Obliterate. This called for a radical approach to creating competitive advantage. It built on thinking that was already around among consulting firms like Index and Boston Consulting Group.

It was so successful that Hammer and Champy collaborated on a follow-up book that was hailed as one of the most important business books of its time: Reengineering the Corporation: A Manifesto for Business Revolution.

Other books followed, along with his own consultancy, and a commentary on the reengineering story as it grew, reached its peak, and then diminished amidst a certain sense of distaste. Hammer confessed to having been naive about the impact his ideas would have on people’s lives, once in the hands of corporations motivated primarily by profit for their shareholders.

Michael Hammer died unexpectedly in 2008, from a brain haemorrhage.

James Champy

James Champy was born in 1942 and studied Civil Engineering, also at MIT. He gained his BS in 1963 and his MS in 1965. He then went to Boston College Law School and received his JD in 1968. From there, he went on to found the consulting firm Index .

In 1988, Index was bought by computer systems giant Computer Sciences Corporation, and became known as CSC Index. Champy stayed on as Chairman and CEO until 1996.  He then went to lead another giant IT consultancy, Perot Systems, until 2009, when it was acquired by Dell.

Champy currently has a wide range of corporate roles, is an independent consultant, and research fellow at the Harvard Advanced Leadership Institute.

Business Process Reengineering (BPR)

A company can get competitive advantage if it can improve its customer service or reduce its operating costs. Continuous improvement methodologies like time and motion studies, and the Japanese Kaizen, had done this for years. But reengineering is a methodology for rebuilding the way a company does things – its business processes – from scratch.

In particular, it emphasises removing whole processes that do not deliver value. The result of this radicalism was obvious in hindsight, though not what Hammer and Champy intended. Companies not only reduced the scope of processes and found significant shortcuts; they removed whole cadres of staff who had previously carried out the tasks that were no longer needed.

The two principle effects of the 1990s’ obsession with reengineering were substantial layoffs and redundancies (described by the now-infamous euphemism ‘downsizing’) and a bean-feast of highly paid work for armies of recently graduated consulting analysts at all of the big consultancies.

By the end of the 1990s, the reengineering bubble had burst, to be replaced by a second wave of technology enhanced cost-saving under the guise of another three letter acronym (TLA): Enterprise Resource Planning, or ERP.

Business Process Reengineering - Michael Hammer & James Champy
Business Process Reengineering – Michael Hammer & James Champy

Some of the Principles of BPR

We can get a sense of some of the principles of Business Process Reengineering from Hammer’s original HBR article. There, he said:

‘At the heart of reengineering is the notion of discontinuous thinking—of recognizing and breaking away from the outdated rules and fundamental assumptions that underlie operations. Unless we change these rules, we are merely rearranging the deck chairs on the Titanic. We cannot achieve breakthroughs in performance by cutting fat or automating existing processes. Rather, we must challenge old assumptions and shed the old rules that made the business underperform in the first place.’

The principles Hammer and Champy articulated included:

  • Organize around outcomes, not tasks.
  • Have those who use the output of the process perform the process.
  • Subsume information-processing work into the real work that produces the information.
  • Treat geographically dispersed resources as though they were centralized.
  • Link parallel activities instead of integrating their results.
  • Put the decision point where the work is performed, and build control into the process.
  • Capture information once and at the source.

What was clearly missing was a recognition that some changes were always going to be more impactful than others. If you fail to address the principal workflow constraints, or make too many changes, then the resulting corporate carnage can be detrimental. This is something Eli Goldratt had realised ten years earlier.

And whenever I think back to my times at a major international consultancy* in the late 1990s, I cannot help but be reminded of something another friend and colleague (Tony Quigley) used to say:

‘The alternative to incremental development is excremental development’

 


* I was involved in Programme Management, not BPR

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Frank & Lillian Gilbreth: Time and Motion

In the modern world, we often wonder how we maximise our productivity, so we can have a successful work life and also a thriving family life. Two people who could have told us about that  were Frank and Lillian Gilbreth. They did not just, together and separately, make significant contributions to management theory.

They also had (together) 12 children. Cheaper by the dozen, Frank Gilbreth was once reported to have said. But it was Lillian’s work that continued after Frank’s early death after only 20 years  of marriage. And she continued as a researcher, as well as being a single mum!

Frank Gilbreth & Lillian Gilbreth
Frank Gilbreth & Lillian Gilbreth

Frank Gilbreth

Frank Gilbreth was born in Maine, in 1868. Passing up on the opportunity to study at MIT because he wanted to support his mum, he became a bricklayer. But his intelligence meant that, by the age of 27, he had his own engineering consultancy, Gilbreth Inc.

He had been watching how bricklayers laid bricks, observing as many as 18 independent movements. Gilbreth would later label these motions ‘therbligs’ (see below). By deploying unskilled labourers, Gilbreth radically reduced the number of motions and increased bricklaying rates from 1,000 per hour, to 2,700. It is the same principle that means surgeons no longer riffle through a tray to find the implement they need: now nurses find and pass the instruments.

In 1903, Gilbreth met Lillian Moller in Boston, and they married the following year. Gilbreth soon got his wife interested in the new ideas of Scientific Management and Taylorism – the scientific management principles set out by FW Taylor. They met Taylor in 1907 and were in Henry Gantt’s apartment when the term ‘scientific management’ was coined.

Gilbreth believed that companies which gained from his time-saving advice should share the benefits with employees, rather that use the gain only to increase profits. So he only contracted with companies that promised to increase wages where his methods brought results. Among his clients were Eastman Kodak, U.S. Rubber, and Pierce Arrow. When the United States entered the First World War, Gilbreth enlisted and was commissioned into the Engineers Officers Reserve Corps.

While his focus was on the time and motion aspects of work efficiency, Lillian would come to focus on the human aspect. They complemented one another well, and also adopted the Gantt Chart in the work, extending the idea to develop  the first flow charts. They were convinced that there was a best way to do anything and in timing everything and tracking processes to reduce steps, they pre-empted the late 20th and early 21st century fashions for continuous improvement, process re-engineering, and lean management.

Frank Gilbreth died in 1924, of a heart attack.

Lillian Moller Gilbreth

Lillian Moller was born in 1878, in California. After a period of home schooling and then high school, Moller commuted to the University of California, Berkeley. There, she achieved her BA in English literature. after a short time at Columbia, where she first studied psychology, she returned to UC Berkeley to complete an MA in English Lit in 1902 and then studied there for her PhD. Denied it on a technicality, she went travelling and met Frank Gilbreth in Boston.

Continuing her travels, the Gilbreths were married in 1904, after she returned, and moved to Rhode Island in 1910. She resumed doctoral studies at Brown University, starting again, and achieving her PhD in psychology, in 1915. Her focus was far more on the human side of workplace efficiency.

After Frank Gilbreth died, Lillian continued their joint work, accepting consulting work through Gilbreth, Inc. In 1935, she became the first female professor in the engineering school at Purdue University, becoming known as ‘The First Lady of Management’. She was, without doubt, a pioneer of industrial psychology. Lilian Gilbreth died in 1972.

Time and Motion

The Gilbreths took a rigorously scientific approach to understanding the way employees carried out work, sometimes measuring time and motion to 1/2000 of a second, using photography and  a ‘microchronometer’ that they devised. With flow charts and therbligs, they analysed to a fine degree.

Therbligs

In many languages, the ‘th’ sound is one letter (theta in Greek, for example). Replace the th in Gilbreth with a single phoneme and reverse the word, and you get ‘therblig’. This is a coinage by Frank Gilbreth that never made it to the mainstream. But the idea is ingenious.

Each therblig is a distinct motion that a worker makes. it is a fundamental element of work and there are 18 of these basic motions. Today we’d no doubt add moving a mouse and hitting return. Ever since I heard the ugly word and looked it up, I’ve loved the concept and the list of movements. Look up therblig on Wikipedia to see the list of 18, and their symbols.

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