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FASTER, CHEAPER, BETTER
A re-engineering “How-To” for Execs
Enhanced by Peter@Engr-Net.com 3/11
Organizer, Entrepreneur Meetups 733 & 1720
One of the co-founders of the re-engineering movement, Michael Hammer has always focused on how companies get things done more than what they need to do. In “Faster, Cheaper, Better”, he and co-author Lisa Hershman, CEO of Hammer and Company (world-leader of business process design, redesign, & education), offer a detailed framework for improving the key processes in a company — the 5 to 10 “end-to-end” processes, from product development to order fulfillment, that bring all the value to the company's customer.
"End-to-end" are the key words in the authors' approach. Processes in most companies are fragmented: different people or departments doing different tasks along the process with no real thought given to the efficiency of the entire process. "Most people want to do a good job," write Hammer and Hershman. "They are given goals and they strive to meet them. They focus intently on doing their job correctly and well, and they are rewarded for their efforts. But few understand how their narrowly defined jobs fit into the overall picture of what the company is trying to accomplish." Value for the customer is not created by a job, it is created by a series of jobs that together form the end-to-end process, the authors argue.
This focus on end-to-end processes may remind readers of Hammer's classic reengineering approach in Reengineering the Corporation and with good reason. That book, explained why the end-to-end process was the better way to organize the operations of a company. “Faster, Cheaper, Better” explains how to "harness" the concept to make the company more profitable.
A. Improving Performance
There are, according to the authors, nine levers that companies can use to improve the performance of their end-to-end processes. The first five involve the design and execution of the processes. The authors call these levers "process enablers." The five process enablers identified by the authors are:
1. Process Design. Companies need to design new end-to-end processes focused on the needs of their customers and eliminate redundancy in the processes.
2. Metrics. Instead of letting each function select its own measures, use customer-focused process measures.
3. Process Owners: are given the responsibility & the authority to improve the entire process — to work with the traditional functional leaders.
4. Performers. Redesigning processes changes the way people work. Performers must see their job as part of the whole value-creating process for the Customer.
5. Infrastructure. A new approach to work by the performers requires a new infrastructure to support them — including new compensation plans, new training and development opportunities, new measurement & reporting tool + other tools, as needed.
B. Continuous Improvement Project. Through their experience with numerous companies, the authors found that implementing these above 5 process enablers could only succeed if 4 enterprise capabilities were in place:
1. Leadership. The leadership of the company needs to think in process terms, not functional terms, and to align their efforts to improve end-to-end processes.
2. Culture. The best companies will have a process-based culture that is relentlessly focused on the customer.
3. Expertise. Process management and redesign need to be core competencies within the organization to produce the product the customer needs.
4. Driving Improvement. A formal function needs to be in place to implement end-to-end process improvement. If you aren’t big enough for a full-time Project Manager, this function could be part of Quality or Process Engineering. They would report the results of their improvements to Executive Management at quarterly performance review or more often – if a more active program.
C. Conclusion of“Faster, Cheaper, Better”. combines a detailed, extensively researched, yet practical methodology with continuous examples of the methodology's application to the real world — both within the discussion of the methodology and in the second part of the book that offers in-depth case studies. A summary chart at the end of the book, that shows these factors in four different stages of maturation, provides yet another guide for companies to improve their processes. This is a business book that delivers on its promise to transform how work gets done in your company.