Today’s Book: Reengineering the Corporation – A manifesto for Business Revolution by James A. Champy and Michael Martin Hammer

We have talked about Radical Transparency & Radical Innovation. But, once you have that billion dollar idea, how to execute it?

Initially, Industries flourished by learning how to break down execution plans into smallest and easiest tasks. A major influence to this came from Adam Smith’s then (1776) radical concept of ‘division of labor’ elaborated in the magnum opus “An Inquiry into the Nature and Causes of the Wealth of Nations”.

This paradigm was at the heart of helping businesses thrive and grow for almost 200 years or so before the largest organizations found themselves becoming huge inefficient ‘diseconomies’. Adam Smith’s ideas were not enough. Another radical approach was required. This was the time for industries to understand and embrace “Business Process Engineering (BPR)”.

This was not an easy task as BPR means starting from scratch – rethinking each and every process across the entire supply chain to maximize profitability. There is where this book helps – it is a manual on how to eliminate everything from your business that does not add value.

This book (first edition came in 1993), is one of the most influential business books ever and strikingly still extremely relevant – because at the heart of any business is “right process” – if there is no clarity and depth in your process definition, then automation and everything else will flounder.

For example (from the book):

• Overloaded with “inventory, buffers and other assets”? This indicates “system slackness to cope uncertainty.”
• Suffering from “rework and iteration”? This indicates “inadequate feedback along chains”.
• Doing excessive checking and controlling in value addition? This indicates the disease of “fragmentation”.

Here is a gem:

Old Rule: Only experts can perform complex work
Disruptive Technology: Expert Systems
New Rule: A generalist can do the work of an expert

Another one:

Old Rule: Managers make all decisions
Disruptive Technology: Decision Support Tools (database access, modelling software)
New Rule: Decision making is part of everyone’s job

Finally:

Old Rule: Plans get revised periodically
Disruptive Technology: High Performance Computing
New Rule: Plans get revised instantaneously

Happy reinventing your corporation!