Don’t Just Survive, go and dominate

“The Agenda”
By Michael Hammer
Crown Business, 2001


Reflecting — after reading this new book of Michael Hammer, author of the famous “Reengineering the Corporation” — I recall this announcement rendered into a poetic line by Matthew Arnold in his famous poem Dover Beach: “The world is different now,” a lament that the old world of sure cures and “balm for pain” was passing, and his generation must, therefore, be “true to one another.”

What Matthew Arnold did in his generation, after a traumatic and bruising world war - and seeing a new world emerging - is what Hammer is telling executives that the entire business world has also changed dramatically – and the old bag of tricks no longer suffice. He thus issues a call to consider new formulas for “dominating,” not surviving, the market – principal of which is to trust one another (addressed to suppliers and other partners) as collaborators for success.

The author of “reengineering” – that has now become a buzzword even among those who barely knows its implications – is now saying that reengineering is not a cure-all after all.

His new book, “The Agenda,” is his way of making up for the unintended effect when people viewed reengineering as a simple recipe for success. “While I did not claim that reengineering was all that companies needed to do to defeat their competitors, the success of the concept led some to see it as panacea, which in turn encouraged others to promote their favorite silver bullets” (the surefire weapon of the Lone Ranger). “Perhaps,” he says, “part of my atonement for this unintentional transgression has been to write The Agenda.”

As it turned out, The Agenda, is an eye-opener. To those of us who approach running business as a chancy game, Hammer – noting the fall of many famous firms (and he had no inkling yet about the collapse of giant Enron) – gives us a reality check: “Get serious about business again.”

His argument is forceful – and breathless: “If managing were simple, why do even companies that become successful stay that way for such short periods of time? Why did Pan Am go out of business, why is Xerox near bankruptcy, why did Digital Equipment fall victim to acquisition? Why have such former industry titans as Lucent and General Motors, Levi Strauss and Rubbermaid, become mere shadows of their former selves?”

Hammer thus proceeds to bring back the basics – and then astonish us with whole new insights. The next chapter, “Run Your Business for Your Customers,” seems old hat at first until Hammer discusses his six-letter formula: ETDBW, meaning, “easy-to-do-business-with.” And then he exposes companies who have succeeded in making it most difficult for customers to deal with – throwing every obstacle and every bureaucratic scheme to leave the customer bothered, bewildered and frustrated.

The author goes on advising us to give MVA – yes, more value added – to our customers. Is this now? It is now in this sense: “You give the customer more, perhaps much more, than you ever have before.” Take the viewpoint of the customer” is an advice that isn’t also new. But this story dramatizes it: He quoted a chairman who shocked his shareholders in a company that controls 90 percent of the drill market: “I have some bad news for you. Nobody wants our drills (!) What they want is holes.”

What Michael Hammer achieves is to make sound business fundamentals more pronounced, more insightful and – more urgent. For example, he stresses the need to put processes first. He rues the fact that many companies are not really inclined to perfect a process to satisfy a customer. His definition drives the point home: “Process is an organized group of related activities that together create a result of value to customers.”

His chapter on “Create Order Where Chaos Reigns” first acknowledges that chaos indeed is in even the best organizations. Then, he says, “product champions” emerge as heroes in these companies to get a product produced and sold. And then he concludes that a company cannot long survive relying on champions who use wizardry and persuasion to get things done.

He points out: “Both heroic sales rep and the product champion try to compensate for organizational disorder by personally harnessing uncoordinated activities into a purposeful whole. They are substitutes for discipline and process, but in the long run, they can’t succeed.”

His prescription: Discipline. “Discipline does not eliminate the need for creativity. On the contrary, it actually encourages them by providing a frame for individual work. Structure ensures that the parts come together as a whole.”

Hammer has more to offer in this book. He criticizes measurement as purely a financial report after the fact. Using these measures, he says, it “like trying to manage a baseball game today by using last year’s win-loss record to tell you whether to call a hit or a bunt.”

In effect, Hammer wants the company liberated from suffocating procedures and structures so that it can concentrate on the most important factor in business: the customer. Of course, that is easier said than done, and a facile interpretation may mislead us to wrong conclusions. All he wants to say, though, is couched in his own inimitable style: “Pierce the veil that separates you from your customers.”

This requires leadership resolve to make changes, even fire people who don’t believe in your initiatives. You’ve got a choice: make your company dominant or be extinct. He has made it so clear what your choice should be.