How to Make Reengineering Really Work

TLDR

Reengineering projects frequently fail to deliver business impact because they are poorly planned and lack strong executive leadership, as shown by a study of over 100 companies. Successful projects begin with senior executives setting broad goals and then restructuring all organizational elements—layout, skills, and processes—to implement those goals. The study found that breadth and depth of change are critical, and that large‑scale reengineering requires extraordinary effort at all levels to achieve long‑term profits. Successful projects involved measurements and incentives, organizational structure, IT, shared values, and skills across Banca di America e di Italia, Siemens Nixdorf Service, and AT&T.

Abstract

Companies often squander their energies on attractive-looking projects that fail to produce bottom-line results A study of reengineering projects in over 100 companies reveals how difficult these projects are to plan and implement and, more important, how often they fail to achieve real business-unit impact. The study identified two factors -- breadth and depth -- that are critical in translating short-term, narrow-focus process improvements into long-term profits. Successful projects at Banca di America e di Italia, Siemens Nixdorf Service, and ATT measurements and incentives; organizational structure; information technology; shared values; and skills. Successful reengineering projects in diverse industries and locations demonstrate how companies can expand the dimensions of their reengineering projects. Senior executives at Banca di America e di Italia (BAI), AT&T, and Siemens Nixdorf Service, for example, set broad goals, from creating a paperless bank at BAI to becoming the most customer-responsive and skilled computer-servicing company at Siemens Nixdorf. They then completely restructured all organizational elements -- anything from the layout of BAI's branch offices to the skills required of AT&T's salespeople -- in order to implement the new designs successfully. Ultimately, however, a reengineering project -- like any major change program -- can produce lasting results only if senior executives invest their time and energy. As the experiences of BAI, AT&T, and Siemens Nixdorf reveal, large-scale reengineering exacts extraordinary effort at all levels of an organization. Without strong leadership from top management, the psychological and political disruptions that accompany such radical change can sabotage the project. …