by Marc Ferranti

Michael Hammer, Esther Dyson on Business Growth

Sep 22, 20033 mins
IT Leadership

The scene: a hotel ballroom stage in New York. Sitting there: Michael Hammer, the guy who put business process reengineering into the corporate playbook; Esther Dyson, IT pundit and capital investor; and Anne Mulcahy, chairman and CEO of Xerox.

The conversation, organized by Xerox as part of an event last spring to showcase the company’s wares, yields some familiar insights about the importance of managing people and IT in the context of answering Mulcahy’s pressing question: Despite investments in technology, despite every cut you can think of, businesses today are faced with one question—Where is the growth?

The experts take their turns talking about change.

Hammer emphasizes rethinking the way business works. “Today’s customer has an extraordinary degree of power, an unprecedented degree of power because intense competition, virtual commoditization of all products and services. And more information gives the customer greater choice,” he says. “As a result, the customer is flexing this power and demanding extraordinary levels of service, quality, speed and low cost—the only way we can do that is by rethinking end-to-end workflows, business processes.”

Dyson stresses the need for humility. “If you change the way you work, it means maybe you were not working right before, and people hate to admit it,” she says. “It’s like when a woman gets a haircut…people come up to you and say you look great, and your immediate reaction is, Oh my gosh, how did I look before? Honestly, it’s humility that matters. It doesn’t mean being ashamed. It doesn’t mean thinking you’re stupid, but it means understanding that there may be a better way to do it.”

Both pundits invoke collaborating with customers to deliver what they need. “We’re accustomed to think about cost and quality and speed as the basis of competition,” Hammer says, “but I think there’s an additional one, and that is ’Easy to do business with.’”

Then they lay out the business cases.

Dyson on International Sugar: “You can’t find anything that is more of a commodity [than sugar], and they transformed their business; they came out of bankruptcy, amazingly. The only surviving manager was the CIO. They have people that used to spend all the day on the phone with customers. Now the customer comes on and uses the website, and they’ve actually won business for their commodity product simply because they’re easier to work with.”

Hammer says the opportunities are there after executives “rethink how we work on an end-to-end basis,” adding, “This is the domain of process redesign, reengineering, Six Sigma.” Among the examples Hammer cites is Shell Lubricants.

The company recently rethought how it starts with an order and turns it into delivery and cash, Hammer says. “In the past, the order-to-cash process would bounce around seven different departments. Now, the order is handled by one person from beginning to end. They’ve reduced cost by 45 percent; customer satisfaction is up by 105 percent.”