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Reengineering Success Factors    
Jeff Hiatt, President,  ProSci

More than half of early reengineering projects failed to be completed or did not achieve bottom-line business results, and for this reason business process reengineering "success factors" have become an important area of study.

Success factors are nothing more than a collection of lessons learned from reengineering projects over the years. Reengineering team members and consultants that have struggled to make their projects successful often say,

"If I had it to do over again, I would…" ,

and from these lessons common themes have emerged. In this module we examine these themes or success factors that lead to successful outcomes for reengineering projects. These include:

1. Top Management Sponsorship (strong and consistent)
2. Strategic Alignment (with company strategic direction)
3. Compelling Business Case for Change (with measurable objectives)
4. Proven Methodology (that includes a vision process)
5. Effective Change Management (address cultural transformation)
6. Line Ownership (pair ownership with accountability)
7. Reengineering Team Composition (in both breadth and knowledge)

Top Management Sponsorship

Major business process change typically affects processes, technology, job roles and culture in the workplace. Significant changes to even one of these areas requires resources, money, and leadership. Changing them simultaneously is an extraordinary task. If top management does not provide strong and consistent support, most likely one of these three elements (money, resources, or leadership) will not be present over the life of the project, severely crippling your chances for success.

It may be true that consultants and reengineering managers give this topic a lot of attention. Mostly because current models of re-designing business processes use staff functions and consultants as change agents, and often the targeted organizations are not inviting the change. Without top management sponsorship, implementation efforts can be strongly resisted and ineffective.

Top management support for large companies with corporate staff organizations has another dimension. If the top management in the "line" organization and "staff" organization do not partner and become equal stakeholders in the change, AND you only have staff management support, you most likely are ill-prepared for a successful reengineering project (line management in this context are the top managers of the operation ultimately accountable for business performance -- P&L, customer service, etc.). Projects that result in major change in an organization rarely succeed without top management support in the line organization.

Strategic Alignment

You should be able to tie your reengineering project goals back to key business objectives and the overall strategic direction for the organization. This linkage should show the thread from the top down, so each person can easily connect the overall business direction with your reengineering effort. You should be able to demonstrate this alignment from the perspective of financial performance, customer service, associate (employee) value, and the vision for the organization.

Reengineering projects not in alignment with the company's strategic direction can be counterproductive. It is not unthinkable that an organization may make significant investments in an area that is not a core competency for the company, and later this capability be outsourced. Such reengineering initiatives are wasteful and steal resources from other strategic projects.

Moreover, without strategic alignment your key stakeholders and sponsors may find themselves unable to provide the level of support you need in terms of money and resources, especially if there are other projects more critical to the future of the business, and more aligned with the strategic direction.

Business Case for Change

In one page or less you must be able to communicate the business case for change. Less is preferred. If it requires more than this, you either don't understand the problem or you don't understand your customers.

You may find your first attempt at the business case is 100 pages of text, with an associated presentation of another 50 view graphs (overhead slides). After giving the business case 20 times you find out that you can articulate the need for change in 2 minutes and 3 or 4 paragraphs. Stick with the shorter version.

Why is this important? First, your project is not the center of the universe. People have other important things to do, too. Second, you must make this case over and over again throughout the project and during implementation - the simpler and shorter it is, the more understandable and compelling your case will be.

Cover the few critical points. Talk to the current state, and what impact this condition has on customers, associates and business results. State the drivers that are causing this condition to occur. State what your going to do about it (vision and plan), and make specific commitments. Keep focusing on the customer. Connect this plan to specific, measurable objectives related to customers, associates, business results, and strategic direction. Show how much time and money you need and when you expect to get it back. Don't sell past the close. No matter how long you talk, you will get resistance from some, and support from others, so you might as well keep it short.

The business case for change will remain the center piece that defines your project, and should be a living document that the reengineering team uses to demonstrate success. Financial pay back and real customer impact from major change initiatives are difficult to measure and more difficult to obtain; without a rigorous business case both are unlikely.
Proven Methodology

The previous module presented several BPR methodologies, and it is important to note that your methodology does matter. Seat-of-the-pants reengineering is just too risky given the size of the investment and impact these projects have on processes and people.

Not only should your team members understand reengineering, they should know how to go about it. In short, you need an approach that will meet the needs of your project and one that the team understands and supports.

Change Management

One of the most overlooked obstacles to successful project implementation is resistance from those whom implementers believe will benefit the most. Most projects underestimate the cultural impact of major process and structural change, and as a result do not achieve the full potential of their change effort.

Change is not an event, despite our many attempts to call folks together and have a meeting to make change happen. Change management is the discipline of managing change as a process, with due consideration that we are people, not programmable machines. It is about leadership with open, honest and frequent communication.

It must be OK to show resistance, to surface issues, and to be afraid of change. Organizations do not change. People change, one at a time. The better you manage the change, the less pain you will have during the transition, and your impact on work productivity will be minimized.

Line Ownership

Many re-design teams are the SWAT type -- senior management responding to crisis in line operations with external consultants or their own staff. It's a rescue operation. Unfortunately the ability of external consultants to implement significant change in an organization is small. The chances are only slightly better for staff groups. Ultimately the solution and results come back to those accountable for day-to-day execution.

That does not mean that consultants or staff are not valuable. What it does mean, though, is that the terms of engagement and accountability must be clear. The ownership must ultimately rest with the line operation, whether it be manufacturing, services, logistics, sales, etc.

This is where it gets messy. Often those closest to the problem can't even see it. They seem hardly in a position to implement radical change. They are, in a matter of speaking, the reason you're in this fix to begin with. They lack objectivity, external focus, technical re-design knowledge, and money.

On the other hand, they know today's processes, they know the gaps and issues, they have front-line, in-your-face experience. They are real. The customers work with them, not your consultants and staff personnel.

Hence your dilemma. The line operation probably cannot heal itself when it comes to major business re-design. Staff and consultants have no lasting accountability for the solution, and never succeed at forcing solutions on line organizations.

You need both. You need the line organization to have the awareness that they need help, to contribute their knowledge, and to own the solution and implementation. At the same time you need the expertise and objectivity from outside of the organization.

Building this partnership is the responsibility of the line organization, stakeholders and re-design team. No group is off the hook.

Reengineering Team Composition

The reengineering team composition should be a mixed bag. For example,

• some members who don't know the process at all,
• some members that know the process inside-out,
• include customers if you can,
• some members representing impacted organizations,
• one or two technology gurus,
• each person your best and brightest, passionate and committed, and
• some members from outside of your company.

Moreover, keep the team under 10 players. If you are finding this difficult, give back some of the "representative" members. Not every organization should or needs to be represented on the initial core team. If you fail to keep the team a manageable size, you will find the entire process much more difficult to execute effectively.

 Jeff Hiatt
President, ProSci