Michael Hammer was dubbed "radical" for unleashing on the corporate community in the 1990s not merely a new buzzword, but a business transformation tool -- reengineering -- that drove companies to use technology to reinvent the way they did things. Often that involved major workforce reductions.
Since the '70s, Hammer has been studying and consulting with organizations on their use of technology and how work is designed and carried out. He says it became clear early on that problems stemmed from the ways technology was used. "Throwing technology at poorly designed operations won't fix problems," he says.
Hammer has recently combined nine new ideas on organizational structure and measurement systems into an agenda that describes the concepts companies need to adopt in today's environment of fierce competition and even fiercer customers.
One of those ideas is that measurement should be a management tool -- and not an accounting activity. Financial Executive asked Hammer to discuss how to accomplish this task and to give some examples of companies that are succeeding. Hammer is president of Hammer and Co., a Cambridge, Mass.-based consulting firm. He is co-author of Reengineering the Corporation and author of The Agenda.
* In tough times you say that it's even more important to set ambitious corporate goals that aim to dominate rather than survive. Will you explain this premise?
MH: Your reach should always exceed your grasp. If you set modest goals, you'll never do anything more than perform modestly. [It's especially so] in highly competitive times, when those who set low goals are likely to be steam-rolled by competitors who set ambitious goals. In tough times, there is no easy growth. With no sales coming through the door, we're now in a battle for market share, and those companies who commit to extraordinary performance will defeat those who commit only to good performance.
* Instead of being single-sided, your new organizational approach involves several sides: process, the role of management, the structure of management systems, relationships with suppliers and customers and more.
MH: One of the most important things I have learned over the last 10 years is that companies are addicted to magic bullets [and are] looking for single answers to the problems they face. There is no single answer.
You have to do a lot of things: You have to rethink your processes; change your style of management; how you interface with your customers; and how...