Never mind. The father of re-engineering-the radical redesign of work around related and interdependent organizational strategic tasks-now says the concept didn't work the way he thought it would.
James Champy, who with fellow Cambridge, Mass., consultant Michael Hammer wrote Reengineering the Corporation, has penned a new book-Reengineering Management-stating that, "on the whole, payoffs appear to have fallen well short of their potential." Among the reasons he cites are human nature and stonewalling by top executives.
His conclusions are not likely to soothe the hundreds of thousands of employees who lost their jobs-or those who stayed to deal with the fallout-as America engaged in a frenzy of downsizing in the name of re-engineering. But for healthcare executives tempted by new organizational strategies, they provide a valuable lesson: A lot of snake oil has been sold in the name of TQM, CQI, downsizing, rightsizing, re-engineering and patient-focused care.
As mergers and acquisitions bring on sudden growth, it's tempting to eliminate unnecessary jobs rather than unnecessary work. But such an approach can be a short-term-and often ineffective-fix.
A study of businesses by the Wyatt Co. found that of half the companies that trimmed more than 10% of their staff, only 61% reduced costs and only 34% achieved higher productivity.
Research also indicates that corporate America has used re-engineering as a cover to provide higher profits. Corporations cut 516,069 jobs in 1993, far more than in the recession year of 1990 when 316,047 jobs were eliminated, according to Challenger Gray & Christmas data reported recently in The Wall Street Journal. In the same period, the Journal reported research by DRI/McGraw Hill, a Lexington, Mass., economic consultant, showing corporate profits rose 11%. Such data help give re-engineering a bad name with employees.
That's not to say new approaches shouldn't be tried. Fresno-based Community Hospitals of Central California has redesigned its executive ranks, eliminating 178 managers and reducing its management layers to two from 12. Only time will tell if the effort creates the desired team atmosphere. But the nurse-to-patient ratio is up, mortality rates have remained constant even though patients are sicker, and the hospital is spending proportionately more of its budget on patient care.
The message for executives is clear: Re-engineering is nothing more than a useless buzzword unless it includes a commitment from top management to expand employee involvement in decisionmaking and to align incentives among all participants in newly forming healthcare systems and networks.