This is number 2 in the list of Idea-Logic systems (ideologies) I have started to share yesterday (The Idea-Logic (ideology) of a company. (1) Business as war)
In managerial terms and trends, the early 90’s was dominated by Business Processes Reengineering, a strong idea strongly pushed by Michael Hammer and James Champy with a highlight in their book ‘Reengineering the corporation’ (1992). By 1994, close to 80 % of American top companies were running some sort of reengineering programme. Reengineering consulting revenues by 1995 were estimated at USD 2.5 billion (Lawrence Freedman, ‘Strategy’, 2015).
The original framework was one of reinventing work from a blank sheet of paper. Just before those times, the Japanese had spread the original Toyota methods both in Japan and the USA, and movements such as Total Quality Management (TQM) became Western translations of what was called Japanese Management, which in reality was not a ‘cultural entity ’,as it sounded, and more a Toyota cloning. Business Process Reengineering, or BPR as it was inevitably called later, was both (a) an historical necessity in front to the Japanese model and (b) an ideology that found its time, place and prophets.
And Hammer was a true prophet, charging double digit multi thousand dollars a talk. He was described by Fortune magazine as ‘Reengineering John The Baptist, a tup-thumping preacher who does not perform miracles himself, but through speeches and writings, prepares the way for consultants and companies to do’.
The intention to review and rationalise processes, to reinvent business offerings and to look for the lean side of organizational performance, was legitimate. A simple comparison with the at that time glorified Japanese efficiency would have done the trick to convert. In doubt, people must have open the windows and counted the number of Toyota cars in the streets. But the process of pealing the onion again and again, in search of the smaller, cheaper, simpler and reengineered onion, went wild. Cost cuttings were brutal. Layers of management disappeared, and with them a junk of corporate memory. Reengineering became a fundamentalist ideology. In the words of one of its prominent figures at the helm of the leading BPR consulting firm CSC, ‘ a modest idea that has become a monster’.
The average failure of BRP during its 6 key peak years (1993 -1999) by any calculation, was close to 70%. That leading consulting company was liquidated in 1999, not helped by the revelations that the book ‘The Discipline of Market Leaders’, written by consultants of the firm, reached the New York bestseller list by the company itself buying ten thousand copies of the book.
BRP failure was seeded in its ideology: the company as a form of machinery. Freedman puts it in his usual articulated way: ‘ An organization could be disaggregated as it was a piece of machinery into a series of component parts , to be evaluated both individually and in relation to each other. It could then be put back together in an altered and hopefully improved form, with some elements discarded altogether and new ones added when necessary to produce an organization that could work more effectively’.
It may have worked with equipment.
Although BRP as such became discredited, the ideology behind has stayed with us in apparent more benign, if equally blind forms.
In Europe, multinationals have scrapped country structures, demoting them to glorified local sales teams, on behalf of the efficiency of centralization. Marketing ceased to be local (why to reinvent a campaign? Why not just translate a pan European one?), financial services were centralised (say, Dublin), Procurement was outsourced (say Croatia) and call centres suddenly all had Indian accents. Once one started this path, everybody else followed blindly, hand hold by the Big Consulting Groups.
The fundamental flaw in the thinking of these Big Consulting Firms is that major efficiencies can be achieved by pealing the onion again and again. But the tiny onion is not an onion anymore. They have not reinvented the corporation, it has just been put on a severe diet, to the point that its brains don’t get the minimum dose of vitamins and oxygen is low. Thinking is gone. It’s a new BPR that has been clever enough no to use the discredited label. They still believe the company is a piece of machinery, not an organism. This ideology is well and alive.