CH#15 Reengineering.ppt

HRM

1. Organization Development and Change
Thomas G. Cummings
Christopher G. Worley
Reengineering & Third Wave Organizations
Organizational Level OD Intervention

2. REENGINEERING
Reengineering,orbusinessprocessreengineering(BPR)asitis
sometimescalled,isasystem-widechangeapproachfocusingon
thebasicprocessesofanorganization.
Reengineeringdoesnotrefertominormodificationsofcurrent
practices.Insteaditmeansrethinkingexistingprocessestodeliver
morevaluetothecustomer,identifyingthewaythingscanbedone
best,andrightnow.
Organizationsthatusereengineeringdonotlookatexisting
processesandsearchforwaystoimprove;theybeginwithablank
sheetofpaper.Thisgivesthemanopportunitytolookattheir
operationsintotallynewwayswithoutthebelongingsof“thisis
howwedoitnow.”

3. Steps in Reengineering
•TheFirststepistoidentifythekeybusiness
processesofadepartmentorworkteam.
•TheSecondstepistoidentifyperformance
measuresintermsofcustomersatisfactionandto
examinecurrentprocessestomeetthesemeasures.
•Thecustomerdoesnotcareaboutinternalrewards;
thecustomerjustwantstheproductorservicedone
right,andontime.

4. Steps in Reengineering
•TheThirdstepistoreengineertheprocess,
organizingworkaroundtheprocess,notaround
functionsordepartments.Workissimplifiedby
combiningrelatedtasksandeliminatingany
elementsthatdonotdirectlyaddcustomervalue.
•ForthStep,theredesignedprocessisimplemented,
andallactivitiesaresubjectedtoanongoing
reevaluation.Workprocessesarecontinually
reexaminedastechnology,competitors,and
customerschange

5. Application Stages in Reengineering
1.PreparetheOrganization.
Reengineeringbeginswithclarificationand
assessmentoftheorganization’scontext,including
itscompetitiveenvironment,strategy,and
objectives.
Thiseffortestablishesandcommunicatestheneed
forreengineeringandthestrategicdirectionthatthe
processshouldfollow.

6. Application Stages in Reengineering
2.FundamentallyRethinktheWayWorkGets
Done.Thisstepliesattheheartofreengineeringand
involvestheseactivities:identifyingandanalyzing
corebusinessprocesses,definingtheirkey
performanceobjectives,anddesigningnew
processes.
Thesetasksaretherealworkofreengineeringand
typicallyareperformedbyacross-functionaldesign
teamwhoisgivenconsiderabletimeandresources
toaccomplishthem.

7. Application Stages in Reengineering
A.Identifyandanalyzecorebusinessprocesses.
Coreprocessesareconsideredessentialforstrategic
success.Theyincludeactivitiesthattransforminput
intovaluedoutputs.Coreprocessestypicallyare
assessedthroughdevelopmentofaprocessmapthat
identifiesthethreetofiveactivitiesrequiredto
deliveranorganization’sproductsorservices

8. Application Stages in Reengineering
B.Defineperformanceobjectives.
Challengingperformancegoalsaresetinthisstep.
Thehighestpossiblelevelofperformanceforany
particularprocessisidentified,anddramaticgoals
aresetforspeed,quality,cost,orothermeasures
ofperformance.Thesestandardscanderivefrom
customerrequirementsorfrombenchmarksofthe
bestpracticesofindustryleaders.

9. Application Stages in Reengineering
C.Designnewprocesses.
Thistaskinvolvesdesigningnewbusinessprocessestoachieve
breakthroughgoals.Itoftenstartswithacleansheetofpaper
andaddressesthequestion“Ifwewerestartingthiscompany
today,whatisthemosteffectiveandefficientwaytodeliver
thisproductorservice?”Eachessentialprocessisthendesigned
accordingtothefollowingguidelines:
•Beginandendtheprocesswiththeneedsandwantsofthe
customer.
•Usethe“bestofwhatis”inthecurrentprocess.
•Donotbeconstrainedbypastpractice
•Identifythecriticalinformationrequiredateachstepinthe
process.

10. Application Stages in Reengineering
3.RestructuretheOrganizationAroundtheNewBusiness
Processes.Thislaststepinreengineeringinvolveschangingthe
organization’sstructuretosupportthenewbusinessprocesses.
Reengineeredorganizationstypicallyhavethefollowingcharacteristics:
Workunitschangefromfunctionaldepartmentstoprocess
teams.
Jobschangefromsimpletaskstomultidimensionalwork.
People’sroleschangefromcontrolledtoempowered.
Thefocusofperformancemeasuresandcompensationshifts
fromactivitiestoresults.
Organizationstructureschangefromhierarchicaltoflat.

11. THE THIRD-WAVE ORGANIZATION
•Thethird-waveorganizationisaconcept
originatedbybusinessfuturistAlvinToffler,who
foresawamanagerialthirdwave.
•Thefirst-wavecompanieswerebuiltinthe
agriculturalage.
•Second-wavecompaniesevolvedintheindustrial
ageandemphasizedmassproductionandgrowth.
•Third-wavecompaniesareevolvinginthe
informationagetomeetchangingtimes,tobeable
totransformtheirproductsandorganizationsin
responsetochangesineconomicandsocialneeds

12. THE THIRD-WAVE ORGANIZATION
•Third-waveorganizationsdevelopedforsuccessin
theinformationagehavesuchcharacteristicsas
flexibility,creativity,andinnovations.Internet
searchengineslikeGoogleandYahoo!are
examplesofhowacompanycanbethemost
popularandthenbequicklyreplacedbya
competitor.
•Third-waveorganizationsareabletotransform
theirproductsandorganizationsinresponsetofast
changescausedbytheinformationage.

13. THE THIRD-WAVE ORGANIZATION
•Flexibility
Thethird-waveorganizationisflat,lean,and
flexible.Itscultureprovidesimmenseflexibilityto
reorganize.Peopleexpectitsbuildings,offices,and
peopletochange.ItsstructurehasnoStability.

14. THE THIRD-WAVE ORGANIZATION
Creativity
Peoplearethelifebloodofthethird-wave
organization.Third-wavepeoplearemotivatedby
commitmenttoavisionorcause,thechancetobe
personallyinvolvedinprojectsthatcanchangethe
world,andtheopportunityforpersonalgrowth.The
third-waveorganizationusestheideaof“buy-in”
management—theideathatpeopleactuallyinfluence
thelong-termvisionandbuyintothegoalsofthe
organization.

15. THE THIRD-WAVE ORGANIZATION
Innovation
Thethird-waveorganizationsupportsrisk-takingand
innovation.Thegoalistomakeyourselfandyour
productobsolete.Thedifferencebetweenthe
traditionalsecondwavecompanyandathird-wave
organizationrequiresarevolutioninattitudes,
values,andbehavior.