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Reinventing re-engineering

By D. Keith Denton

Executive Summary
In the 1990s, re-engineering was derided as the “fad that forgot people.” In truth, re-engineering may have been ahead of its time. The advent of social media combined with data visualization software allows organizations to use their own internal intranets to get the right information to the right people in real time. This potential juggernaut can help you re-engineer your business processes and systems to become more effective and efficient.

Re-engineering and other change management initiatives can be expected to shift radically as a result of the use of intranet technology and complementary software. Re-engineering normally involves the radical transformation of existing business processes and systems to increase efficiency and effectiveness. The literature suggests that as many as 50 percent to 70 percent of organizations that undertook re-engineering when it was introduced failed to achieve the intended results.

Why such a high failure rate? Obviously there are many culprits, but re-engineering efforts typically fail because changes often are dictated from the top down, and employees think they are having these changes forced upon them. Additionally, re-engineering efforts require employees to learn complex new processes that involve significant investments in retraining. Re-engineering also requires the cooperation of multiple departments that sometimes have conflicting goals, procedures and computer systems.

Researchers have sometimes described re-engineering efforts as the “fad that forgot people,” according to Fast Company magazine. It’s true that re-engineering, like so many change initiatives, failed to recognize the importance of people. It treated everyone as interchangeable parts that could be re-engineered along with the “bits and bytes.” Studies revealed that the most challenging aspect of re-engineering was dealing with the fear and anxiety of people because companies often used re-engineering to eliminate jobs. In addition, nearly two-thirds of re-engineering initiatives were found to produce mediocre, marginal or failed results. By late 1995, re-engineering had peeked and run its course in the United States. But even back then there were hints that maybe not all was lost.

As early as 1996, authors like Geoffrey James suggested that intranets may provide the answer for re-engineering success by resolving each of the concerns just noted. First, improvements could be developed from the bottom up by employees or departments within the organization, enabling employees to feel greater ownership of the change process. Intranets also provided an excellent vehicle for training and educating employees on new processes and procedures, thus addressing the second reason for re-engineering failure. Finally, because Web browsers operate across different machine platforms, they address the third concern by improving organizationwide communication and enabling users to overcome potential differences between the goals and perspectives of various departments, as Federic J. Herbert wrote in 1998 in SAM Advanced Management Journal. But it turned out that intranet technology would have to wait a decade or so to allow the software systems to catch up with the potential of intranet.

Unlike the Internet, which connects users to the world, an organization’s intranet is open only to those the company deems acceptable. A company’s intranet, with its limited membership, possesses the potential to revolutionize the team-building process. These computer-based networks have allowed companies to use data visualization software and social media tools to facilitate information sharing in real time. Used this way, intranets provide continuous feedback on an hourly, daily or weekly basis so processes can be corrected. The intranet, combined with appropriate software, can display critical information accessible to all in an easy-to-understand format. Knowing this makes it far easier to identify potential areas of improvement.

Although corporate intranets provide many benefits, there are some disadvantages. The main ones are that information needs to be updated continually to be useful; technology is changing continually; technical support is needed to maintain the intranet system; and security. One huge disadvantage concerns how it is being managed. Unless all employees have access, many of the potential advantages are lost. This is where the 21st century applications of social media can be useful and a more open-minded management could help reinvigorate re-engineering.

Marrying social media and the corporate intranet

Today, corporate intranets combined with social technologies such as blogs, wikis and social network platforms like Facebook and Twitter truly hold the potential not only to bring the intranet into the 21st century, but also to help reinvent re-engineering. The whole is greater than the individual parts. Used together they can provide rapid, relevant and understandable feedback about what is going on and how things are or are not working. Organizations and departments finally can access the true current state of affairs in real time.

Social media expert Shel Holtz says tools like PollStream can provide organizations, departments or managers with quick and cost-effective user feedback. Most change is paralyzed by a climate of fear and anxiety. Employees using social media tools through organizational intranets can address the specific content of a proposed change or become more involved in the whole change process. They easily can add ideas and even rate preferences. Such applications can replace or augment focus groups. Additionally, other tools like Socialtext are designed to simplify the process of sharing expertise, ideas and corporate data, Ryan Williams wrote in Communications World.

Using the intranet with some of today’s social media and data visualization software is not bound by outdated constraints. It is finally possible for all organizational members involved in redesigning work to imagine new, positive experiences for themselves and develop interactions that did not exist. Some refer to this process like the informal community sessions and websites that a European bank’s junior advisors and target customers dreamed up as co-creation, according to Venkat Ramaswamy and Francis Gouillart in Harvard Business Review.

C.K. Prahalad and Ramaswamy coined the term co-creation to describe the changing relationship between customers and companies. Organizations like Cisco, Dell, Procter & Gamble, Sony, Starbucks and Unilever have embraced this co-creation process and found out something important. They discovered that re-engineering or creating new experiences for their end customers often requires designing better experiences for their own internal players. That is something largely ignored by conventional re-engineering approaches.

The normal process redesign starts by asking, in Ramaswamy’s words, “How should we redesign the steps in developing and launching products to minimize cost and time to market while meeting the requirements of the customer?” But co-creation approaches the same problem differently because it begins at a different starting point. You begin by focusing on the experiences of all your stakeholders who would be involved in or affected by the new offering.

Ramaswamy noted the case of a large European bank’s launch of a low-end life insurance product. The bank initially held a series of workshops in which all kinds of employees met first with one another and then with target customers to discuss their experiences with past product launches. During the discussions, the bank discovered that the answer to its problem lay in the experience of its lowly junior customer advisors. Their junior advisors largely had been limited to performing front-desk duties in the branches, such as opening checking accounts and handing out brochures. Most of them felt they were in dead-end positions, and many quit after just a few months.

No one implementing a traditional re-engineering effort would ever think to include a junior advisor’s desire for career advancement as a re-engineering factor. But a premise of the co-creation process is that by sharing experiences, everyone involved will acquire a better understanding of what is happening, thus enabling them to devise a better experience for both sides. In the bank’s workshops, it became clear that the junior advisors and their low-end target customers had a lot in common with the bank’s target market for this new service.

The short version was that both were ignorant about investments. Shortly after the informal community sessions started, the junior advisors asked the bank to use the bank’s intranet so they could teach one another how to sell the new product. The bank agreed. Later on the bank introduced a similar website for the target customers, where they could exchange tips on how to save money. The open forum allowed junior advisors the opportunity to chime in. This high involvement and open access sharing of information resulted in the bank’s most successful launch of a new product (in terms of revenues generated in the first two years) in the life insurance division’s history.

Management by exception

But expanding the outreach of the intranet through collaboration and social media software is not the only way the intranet and innovation software is reinventing application of both the intranet and re-engineering. It also can help better focus re-engineering and change initiatives by keeping you focused on key changes as they occur. Vivek Ranadive, chairman, CEO and founder of Tibco Software, already has a rather precise vision of what he wants in the workplace. He calls it the “event-driven” corporation. If he is right, running a company will be rather like managing an information technology system today: Machines monitor the business, solve problems by themselves as far as possible and alert managers when something is amiss.

Ranadive refers to this as “management by exception,” and to some extent it already is practiced at Tibco. Most of the company’s employees are equipped with a BlackBerry, a wireless phone device that can receive and send e-mail, so that they can be given warning of an “event” such as an unhappy customer. Their social media tools allow rapid reaction to critical events. Event-driven companies using popular social media (like blogs, wikis, status updates, comments and ranking) are increasingly a part of today’s business world. One recent study from Prescient Digital Media found that social media were in use on almost 90 percent of intranets. They were giving organizations the opportunity for new forms of measurement, assessing inputs, outputs and outcomes of communication.

Intranet technology used in this manner enables companies to exploit their information infrastructures to promote internal communications. The ability to get in-depth internal information on a need-to-know basis through a few mouse clicks often has been cited as one of the most compelling reasons for the growing popularity of intranet-based applications. Now we finally have an explosion of new software tools to deliver on this long-sought goal.

A new age

Real-time communication technology combined with social media software make it possible to re-engineer business processes on a continuous basis and across organizational boundaries. Data visualization software can design desktop computer screens to track and graphically display key processes in real time. Tracking and visually displaying these processes allows you the chance to manage them rather than simply reacting to after-the-fact data. Additionally, the intranet real-time access to information gives management a chance to intervene before bad processes become an after-the-fact statistic.

Michael Hammer, who helped create the re-engineering movement way back in the 1990s, didn’t worry about creating more great managers. He said he would be happy just having a lot fewer bad ones. “I’d like to turn the bad managers into adequate managers,” he emphasized.

Companies have used quality programs and data-intensive process management to improve such areas as procurement and order fulfillment. Hammer said it’s time to turn that attention to the management process, relying on metrics and data in decision making through what he calls “analytic performance management.” Hammer believed information systems had been too passive, built by technologists who focused on providing access to information in customer-management or financial systems.

“There’s a presumption that a businessperson knows what they want to ask. That’s a fiction,” he said. Managers need information pushed to them and guidance for decision making, according to Rick Whiting in InformationWeek. Today that dream finally can become a reality.

Several companies report using their intranets to facilitate collaboration among widely dispersed work groups. For example, on J.C. Penney’s intranet, jWeb, employees use the intranet to develop Web-based training. “Internet- and intranet-based technology open up all kinds of possibilities for collaborative work across business units, departments, divisions, suppliers and customers,” Mani S. Iyer, president of California-based TeamScape, told Sacha Cohen for Training & Development.

Intranet technology’s greatest potential lies far beyond simply using it to store information. Using it in conjunction with various social media tools, as seen in the bank case, helps encourage coordinated actions and thinking. Data visualization software can design intranets so organizational leaders as well as employees at all levels continually see key processes and know what is needed to reach an objective. Information can be used to track what is going on and provide real-time feedback on the status of mission critical objectives. In short, the intranet and mission critical software can be a new managerial decision-making tool.

All data is not created equal

Software combined with good objective setting, data collection and the intranet’s ability to provide real-time feedback makes it far easier to implement re-engineering strategies and manage change. Employees can be greeted every day with visual feedback about what is important, where they are headed and how they are doing. Combining this with social media’s ability to share information rapidly makes it far easier to implement management initiatives. It can focus your group’s effort around critical processes and gives employees a direct connection between what they do and overall corporate strategy.

Data visualization software that collects, analyzes and graphically displays information on single desktop screens eliminates the need to install dashboards to provide decision makers with real-time information about what needs to be done. These dashboards’ “button display” of status lights can indicate normal operating conditions or use a red light to alert you that a key performance measure or customer issue is below your competitive or historical benchmarks. Green lights might indicate exceptionally good performance, and yellow lights could show when conditions are between normal and exceptional.

There are dozens of options among data visualization software that combine raw data and historical line graphs to help decision makers see why certain parameters have changed. Using these tools can help correct performance immediately because executives and employees can see how key processes are affecting strategic or operational initiatives. Data visualization software paired with social media tools, good objective setting, data collection and the intranet’s ability to provide real-time feedback makes it far easier to implement re-engineering and change initiatives. It is time to go back to the future and rethink those 1990s re-engineering initiatives. It is time to reinvent re-engineering.

D. Keith Denton is a professor of management at Missouri State University. He earned his Ph.D. at Southern Illinois University in 1982. Denton has had more than 150 articles and 14 books published. He has been a practicing management consultant and university professor for more than 20 years.

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