How to Conduct an Effective Overhaul of your Business
About the Authors:
NEIL FLANAGAN and JARVIS FINGER
Management Strategists at Plum Press
World-renowned business strategists and authors of several international best-selling books on management. Neil is a sought-after keynote, conference and motivational speaker and Jarvis is the award-winning founder and editor of Australia's best known magazine for school administrators.
To compete in today’s business world with all its challenges and uncertainties, it pays to go back to basics.
You must provide customers with quality products and services otherwise they’ll go elsewhere. To keep ahead of your game, you may have to abandon outdated notions about how your organisation does its work and start afresh. This is the essence of reengineering—a process of improving the old ways of doing business and seeking to create new and better ways. Here’s how to help your business benefit from an effective overhaul.
1. The difference between effectiveness and efficiency
Effectiveness is about doing the right things, completing activities and achieving goals. Efficiency is about doing things in an optimal fashion, such as completing it in the fastest or in the least expensive manner. It is possible to do something really efficiently, in the best possible way, but if it is the wrong thing in the first place, it will not be effective in achieving the goal. While the objective of an overhaul is effectiveness and the achievement of business goals, much of the focus will be on efficiency, as can be seen below.
2. Take nothing for granted.
The first step is to take a good look at what you are doing and make an honest assessment of whether you are doing the right things. How have the needs of your customers evolved and how well have you kept up with the changes? Are all of your products and services still meeting a real demand and filling a gap in the market? Before you look at how you are doing things, make sure that you are not simply looking to change the way in which you deliver something that is no longer wanted. This may require making tough decisions including selling-off, combining or closing down areas of your business that don’t fit with where you want to be or where you need to be in order to remain competitive.
3. Critically evaluate your business.
Only once you have reaffirmed that you are doing the right things, should you turn your attention to how you are doing them. Take a good look at every part of your business and analyse the way things happen. Ask yourself, ‘If we were starting again from scratch, how would we do (whatever we are doing) now?’ Smart reengineering is about redesigning selected processes to dramatically improve competitiveness and productivity. Where to start? Do not waste valuable resources now on areas where there is likely to be little payback. Focus first on known problem areas – those where you are failing to achieve expected and reasonably-achievable results and on areas where you can get the best return on your efforts.
4. Focus on processes.
Processes become the new basic building blocks of the organisation. Improving processes or practices is the way to decrease turnaround time. For each part of the business, it is possible to stand back and re-evaluate if the process really needs to be done (what people are doing and is it effective?) and whether it is performed optimally (how they are doing it and is it efficient?)
By reducing turnaround time and improving quality, you become increasingly competitive: more work-in-progress should mean greater profits. It is well-established that a high percentage of problems in most organisations are process-related.
5. Emphasise the need for change.
Breaking work down into multi-task jobs will inevitably demand a fundamental shift in employees' perspectives. Change is a measure of life in progress, and others will be expecting you to be fostering ongoing, planned change. Don’t disappoint them. Your never-ending pursuit of best practices in your business provides an ideal catalyst and motivation for meaningful change. But one of your principal roles will also be to act in a ‘gatekeeper’ capacity, to control the introduction of change processes. Your task will include implementing a change process that enables staff to respond positively.
6. Gain the support of your employees.
You may be the visionary with the BIG picture and the ideas about how to achieve best practice, but you won’t be able to achieve your goals single-handedly. You’ll need to enlist the support of your team - and there is no rule to say how long this should take.
What we do know is that you should hasten slowly until others share your vision of identifying the problem, redesigning the process, and fixing the problem.
7. Identify areas for improvement.
If you’re tempted to take on too many areas at once, don’t - your change initiatives may simply bog down. Initially, identify and select a few key areas for attention. If your company is involved in, for example, product development, manufacturing, sales and order fulfilment, note down or chart the existing processes followed in those areas. Let value-adding be a key focus. Specific projects can then be identified to address process improvements. As processes improve, the boundaries—perceived or real—will disappear, heralding a more flexible and responsive operation.
8. Involve the right people.
Treat each area for improvement that you wish to tackle as a project and all people involved as part of the project team, having one team per project. Their role is to research, report, and implement changes over an agreed time (usually between four and sixteen weeks). Include outsiders if necessary to inject fresh ideas and seek professional assistance as required. Early scores on the board are essential, so monitor the progress of project teams so that they achieve early successes. Remember to focus on business practices, aim for more than modest results, anticipate resistance, and budget time and money to make the new procedures work. The focus must be results, not performing tasks.
9. Encourage employees to identify opportunities for improvement.
One measure of the success will be employees identifying new areas in need of attention. A culture of continuous improvement encourages excellence in all parts of the organisation. Your efforts to reengineer the organisation are rewarded with the emergence of professional work groups.
10. Learn from others.
A study of 47 American and European companies that had successfully completed reengineering programmes identified best practices, including:
Recognise and articulate a compelling need to change.
Use a structured framework.
Link goals to strategy.
Pick the right process before redesigning it.
Plan for continuous improvements.
Management Memo
What matters in reengineering is how we want to organise work today, given the demands of today's markets and the power of today's technologies. How people and companies did things yesterday doesn't matter to the business reengineer.
Michael Hammer & James Champy,
Reengineering the Corporation
Adapted from Just about Everything a Manager Needs to Know
By Neil Flanagan and Jarvis Finger
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