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Step 5: Decision: Improve Existing Process?

by

Arthur M. Schneiderman

My biggest criticism of proponents of what I call "rampant reengineering" is their lack of sound criteria for making the redesign vs. incrementally improve decision.  Hammer's admonition to "obliterate" the current process is more marketing than sound business practice.  It must be obvious to everyone that a newly redesigned process, with its unfamiliar technology and/or organizational structure will not instantly achieve its ultimate capability.  Much process learning is required to significantly narrow the initial performance gap (typically 30% to 40%).  Continuous improvement tools and techniques currently produce the fastest rates of improvement for newly re-designed processes.  

Over time, a point of diminishing returns (implicit in the half-life method) is reached for processes that are core competencies, and the process needs to be re-designed in order to achieve or maintain competitive leadership.  Process redesign is very expensive in both fiscal and human capital terms.  Hence, process management must ebb and flow between redesign and incremental improvement.  In nearly all cases, this improvement "tide" has a cycle of many years.  Successful process management requires continuous evaluation of these two alternatives.  

It should also be kept in mind that defects are highly contagious.  A newly redesigned process often generates the same defects as the old one.  The carrier of this disease is ignorance of their root causes.   And, to make things worse, process redesign is usually a "bet your career" activity.  A prudent process owner will want to know as much as possible about the root causes of defects in the old process in order to minimize the risk before making the very costly decisions associated with process redesign.

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1999-2006, Arthur M. Schneiderman  All Rights Reserved

Last modified: August 13, 2006