Sun, 06 Nov 94 10:04:47 -0800

ON 11/6/94, Keith Cowan wrote about his views on re-engineering and detailed
some of the issues involved in the project on which he is currently working.
Keith, in the spirit of the learning organization, I'd like to point out
the mental model that you seem to be using and to suggest an alternative
mental model. I am basing my comments solely on your last posting. Forgive
me if I seem to be jumping to conclusions.

I believe that your mental model holds the traditional centralized
organization (with departments organized by function) as the optimal
(perhaps the only) way to organize a large, low-cost enterprise. What
leads me to this conclusion? Well, you say that re-engineering is merely
taking a process view of the organization, and you suggest that improvements
created by re-engineering almost always begin to abate as soon as the
re-engineering effort concludes. Reading between the lines, it seems that
your re-engineering projects have consisted of temporarily forcing people
in various functional departments to focus on a particular process. Thus,
when the re-engineering project is finished, these people stop focusing on
the process. You suggest that one way to ameliorate this problem is to
install a TQM/CQI program, which forces the people to periodically focus
on the process again.

Another pointer to your mental model of organization is your explanation
of your current project. You are working with a company that has
traditionally organized by client group. In order to reduce unit costs,
you are helping them to "centralize". Apparently, you view centralization
as the natural way to reduce costs. You recognize that this new way
of organizing may lead to a loss of client focus, the traditional strength
of the company. Therefore, you are looking for an IS-based means to
maintain client focus.

Now, let me suggest an alternative mental model of the organization, advocated
by several management gurus. Perhaps work can be organized around full-time,
permanent, process-oriented teams rather than functional departments.
Communication systems, lines of authority, performance appraisal, and
reward systems can all be revised to support this team structure.
Re-engineering, then, consists of shifting from a traditional organization
of functional departments to a new organization of process-oriented teams.
The team replaces the department as the basic unit of the organization.
Therefore, the people involved in the process do not begin to lose their
process focus when the re-engineering project is completed. There is
no need to install part-time CQI teams, because the regular work teams
are natural process improvement teams. The improvements created by the
re-engineering effort are fully retained.

What happens if you apply this mental model to your current project?
The client-focused company wants to reduce unit costs. Under this mental
model, the natural response is not to centralize functions. Rather, it
is to define the key processes and improve them. If costs can be
reduced by more effective sharing of resources or co-ordination of work,
perhaps information systems and other systems can be created to do this.
It may not be necessary to create traditional "centralized" departments.

Well, Keith, I know this is not the type of response you were soliciting.
I hope it provokes some interesting ideas or discussion if nothing else.

Douglas Wolfe