Getting past the obstacles to successful reengineering

Business Horizons, May-June, 1995 by W.E. Holland, Sanjiv Kumar

In a second phase, he and his team, now supplemented with new members, hammered out the outlines of new processes to address their primary objectives. His efforts were strongly supported by the firm's CEO, who personally participated in detailed design sessions to provide both content and visible support. Together the two executives offered the kind of support that can only be labeled as true leadership.

Executive Neglect

The CEO of a medium-sized engineering firm endorsed the idea of making significant changes to key processes. His endorsement in words was followed by a two-day session attended by his executive team to target those processes most in need of change. After a targeting session that was only able to locate "broad" targets whose desired outcomes were still fuzzy, the CEO was noticeably absent in the few subsequent meetings of the group. It was said that he was absent for "real business reasons" that dealt with real jobs with real customers.

A short time after the change initiative was launched, the firm's market began a steep nose dive. This alarmed everybody and took more of the executives' attention away from the change. Some members of the executive team argued for aggressive pursuit of the change initiative as the "best hope" the organization had to change its position as a competitor in a sorry market. Despite the arguments, the CEO poured more and more attention into the day-to-day business in a vain attempt to halt the slide. Day-to-day pressures and layoffs to "size the business to the market" soon led to true "bunker mentality." The company sits today with unaltered processes, a resulting high cost profile, and no real effort to make major changes. Truly this is a case of neglect of the change effort--understandable, perhaps, but neglect nonetheless.

Executive Pressure

The CEO of a $100 million electrical manufacturer sensed an upcoming shift in the economics of his industry. While the shift was still building momentum, he gathered his management team and told them of his concerns. The meeting ended with his exhortation to reexamine processes with the idea of radically reducing costs. The management team heard his concerns but did not buy into his sense of urgency or the need to radically change anything. In further meetings with the team the CEO repeated his wish for "immediate action to reduce costs."

After more confrontations with the CEO, several members of the team launched initiatives in their parts of the organization. Though the stated purpose of these initiatives was radical surgery, the units were not able to mount a serious effort to re-examine processes or to reduce costs. After some months of frustration, the CEO signed himself and his team up for a crash course in reengineering. During the course, the management team members displayed continued confusion about the need for change as well as for direction. The output from several small group exercises was focused on the team's need for some picture of the future. Each time the request was made, the CEO responded with a single theme: "I don't know what we need to look like in the future. All I know is that we've got to get our costs down now!" As of this writing, the pressure from the CEO continues unabated and the "cost reduction initiatives" continue to be superficial and unproductive.