May/June 1996 -
Is Reengineering Dead...
or are we dead if we don't reengineer?


The answers to these questions are "No" and "Ultimately, yes." Despite the claim of some business newswriters that reengineering is dead, it continues on, alive and well. The freshness of the term may have dropped off (or been so abused as to be un-used), but the reengineering concept/process itself will not disappear. To stay in existence, all firms have to reengineer repeatedly to take advantage of continuing changes in their industry. The need to reengineer won't stop unless change stops.

What is reengineering?

Perhaps others are using a different definition for reengineering than we use. Those claiming reengineering is dead may be referring simply to the recent round of resizing that has occurred in many industries. Even if that is their definition, we would reply that although the first round has passed, more rounds are still to come. Resizing will continue in all firms as responsible managers ensure their organizations are sized right for the business that is out there.

But "resizing" is an inadequate definition for reengineering. Classic reengineering is re-deciding the way we do business based on the best options available to us at that time. It is not driven fundamentally by people, but by changes in technology that occur over time.

Take the example of our CEO's house. Sixty years ago a young accountant told his fiancee, "I'll build us the best home money can buy." Then he worked with an architect to design the house. Some of the decisions he made were about which plumbing and lighting options to install. He and his architect looked at all the options available in the 1930's and chose the best ones. So they "engineered" the house. Sixty years later, Dutch (Holland) and his wife, Jan, sat down with an architect to consider some changes. Once again they had to make decisions about plumbing and lighting. This time they had an entirely different set of options to look at. Based on these new options, they "reengineered" the house and put in plumbing and lighting systems not available to the original builder. We would expect that someone purchasing the house in 2020 will probably make different choices ... ones that Dutch and Jan don't -- can't -- know about.

What drives reengineering?

The fundamental driver for reengineering is technology change. Original decisions about how to carry out a process or manage a firm change over time as technology advances open new options. In industries where the technology is evolving quickly, the waves of "re-deciding" fall close together. In others, the need to re-decide/reengineer may come less frequently.

The second driver is competition. If no one else in our industry is taking advantage of new technology, we don't need to re-decide immediately how we should do business. However, sooner or later, someone will take advantage of these new options, and we'll be forced to consider them as well. In fact, if we want to maintain a position as industry leaders, we will look at the new options sooner rather than later. Reengineering has been so hot over these last few years because technology has rapidly advanced in the fields of:

• Information/Communication, and
• Management (where we are becoming more comfortable with organizations/employees under self-control).

When one organization in an industry has decided to take a quantum leap and embrace the new technology, competitors have also had to change ... or fall out of the race.

Reengineering from here on out

Managers must constantly evaluate how they are doing business and decide if they need to change in some area. In the past managers tended to be conscious of only two types of choices around change:

1. Make no change -- keep what we've got, or
2. Enhance/evolve what we have.
3. In the 1960's companies survived choosing between these two only. The reengineering movement over the past few years, however, has made it clear that there is yet one other possibility:
4. Totally redo/revolutionize the way we do things. In the 1990's #2 and #3 will be the ones most frequently chosen by successful businesses.

In addition to illuminating the importance of that third type of choice, the reengineering movement has provided a mechanism that helps managers make sweeping changes. And as technology change occurs ever more rapidly, having the ability to respond effectively is critical.

The point is that conscientious managers should not take reengineering off their plate just because they aren't seeing as much about it. It will be a live option forever. (Indeed it always has been -- we just didn't always recognize it as such because technology advances were happening at a slower pace.) In fact, the more rapidly changes occur in our industry, the more likely it will be that we will have to reengineer ... or lose our business all together.