A Reengineering How-To For Executives
One of the co-founders of the reengineering movement, Michael Hammer has always focused on how companies get things done more than what they need to do. In Faster, Cheaper, Better: The 9 Levers for Transforming How Work Gets Done, he and co-author Lisa Hershman, CEO of Hammer and Company, offer a detailed framework for improving the key processes in a company — the five to ten end-to-end processes, from product development to order fulfillment, that bring all the value to the company's customer.
"End-to-end" are the key words in the authors' approach. Processes in most companies are fragmented: different people or departments doing different tasks along the process with no real thought given to the efficiency of the entire process. "Most people want to do a good job," write Hammer and Hershman. "They are given goals and they strive to meet them. They focus intently on doing their job correctly and well, and they are rewarded for their efforts. But few understand how their narrowly defined jobs fit into the overall picture of what the company is trying to accomplish." Value for the customer is not created by a job, it is created by a series of jobs that together form the end-to-end process, the authors argue.
This focus on end-to-end processes may remind readers of Hammer's classic reengineering approach in Reengineering the Corporation and with good reason. That book, the authors write, explained why the end-to-end process was the better way to organize the operations of a company. Faster, Cheaper, Better explains how to "harness" the concept to make the company more profitable.
Using the Nine Levers
There are, according to the authors, nine levers that companies can use to improve the performance of their end-to-end processes. The first five involve the design and execution of the processes. The authors call these levers "process enablers." The five process enablers identified by the authors are:
The process design. Companies need to design new end-to-end processes focused on the needs of their customers and eliminate redundancy in the processes.
Metrics. Instead of letting each function select its own measures, use customer-focused process measures.
Process owners. Designate formal process owners — with the responsibility and the authority to improve the entire process — to work with the traditional functional leaders.
Performers. Redesigning processes changes the way people work. Performers must see their job as part of the whole value-creating process.
Infrastructure. A new approach to work by the performers requires a new infrastructure to support them — including new compensation plans, new training and development opportunities, a new reporting structure and the necessary tools.
Through their experience with numerous companies, the authors found that implementing these five process enablers could only succeed if four enterprise capabilities were in place:
Leadership. The leadership of the company needs to think in process terms, not functional terms, and to align their efforts to improve end-to-end processes.
Culture. The best companies will have a process-based culture that is relentlessly focused on the customer.
Expertise. Process management and redesign need to be core competencies within the organization.
Governance. A formal governing infrastructure needs to be in place to implement end-to-end processes, such as a program management office that includes a chief process officer or a process council at the top of the organization.
Faster, Cheaper, Better combines a detailed, extensively researched, yet practical methodology with continuous examples of the methodology's application to the real world — both within the discussion of the methodology and in the second part of the book that offers in-depth case studies. A summary chart at the end of the book, that shows the nine levers in four different stages of maturation, provides yet another guide for companies to improve their processes. This is a business book that delivers on its promise to transform how works gets done in your company.