Reengineering the Corporation
A Manifesto for Business Revolution
by Michael Hammer & James Champy
“The authors of Reengineering the Corporation have written a book of great importance, a book that will change the way we think about and do business.”
Why Is Getting Simple Things Done at Work So Complicated?
Have you ever tried to get a simple expense report approved and felt like you were sending it on a grand tour of the entire company? It goes from your desk to your manager's, then to accounting for review, then to a director for a signature, and finally, weeks later, you get reimbursed. Each person in that chain does their one small part, but the overall process is slow, inefficient, and maddening. The work isn't hard, but the process is broken.
This fragmentation is a relic of the Industrial Revolution, built on Adam Smith's idea of dividing labor into tiny, specialized tasks. In their revolutionary 1993 book, Reengineering the Corporation, Michael Hammer and James Champy argued that this old model was strangling modern companies. They declared that it was time to stop tweaking the old way of doing things and instead obliterate it and start over. Reengineering is not about making incremental improvements; it's a manifesto for radical, dramatic, and fundamental reinvention of how work gets done.
What You'll Learn
The End of the Assembly Line: Understand why the 200-year-old model of task-based work is the root cause of corporate inefficiency.
Thinking in Processes, Not Jobs: Learn to see your business as a collection of end-to-end processes rather than a series of disconnected departments.
The Power of Radical Redesign: Discover the principles for redesigning work to achieve dramatic improvements in cost, quality, service, and speed.
The Famous Ford Example: See how Ford cut its accounts payable headcount by 75% not by making clerks work harder, but by completely rethinking the process.
The Old Way: A World Divided by Walls
For two centuries, the guiding principle of business was the division of labor. A complex job was broken down into simple, repeatable tasks, and each task was assigned to a specialist. The finance department handled finance, the sales department handled sales, and the manufacturing department handled manufacturing. This created a world of functional silos—invisible walls between departments that hindered collaboration and slowed everything down.
The problem, as Hammer and Champy saw it, is that customers don't care about your internal departments. A customer placing an order initiates a process that might snake through sales, inventory, shipping, and finance. In the old model, the order is passed like a baton from one department to the next. At each handoff, there is a risk of delay, error, and miscommunication. No one person owns the entire process, so no one can fix it. The result is a system that is slow, costly, and frustrating for both employees and customers.
The Big Mindset Shift: From Tasks to Processes
Reengineering’s core idea is to stop focusing on individual tasks and start focusing on the end-to-end process. A business process is a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer. Instead of asking, "How can we make our clerks file invoices faster?" the reengineering question is, "Why do we need to file invoices at all?"
The goal is to redesign these processes for maximum efficiency, often by leveraging modern technology. This means starting with a clean sheet of paper and asking, "If we were creating this company today, how would we organize the work?"
The most famous case study from the book is Ford Motor Company's accounts payable department. In the 1980s, Ford’s accounts payable department had 500 people. They looked to Mazda in Japan, a company Ford partially owned, and were shocked to learn Mazda handled the same function with just five people.
Ford’s first instinct was to try for an incremental improvement—to streamline the process to get a 20% headcount reduction. This is the classic "paving the cowpath" approach. But reengineering demanded a more radical question.
The Old Process: A supplier sent an invoice to Ford's accounts payable. A clerk in accounts payable would then spend days trying to match that invoice against a purchase order from the purchasing department and a receiving document from the warehouse dock. Mismatches were constant, and most of the 500 employees’ time was spent investigating these discrepancies.
The Reengineered Process: Ford decided to kill the invoice. The new process was simple:
A buyer in the purchasing department issues a purchase order and enters it into a shared online database.
The supplier ships the goods. When the goods arrive at the receiving dock, a clerk checks the database.
If the shipment matches an outstanding purchase order, the clerk accepts it and pushes a button that tells the computer to automatically schedule payment to the supplier.
There was no invoice and no need to match three different pieces of paper. By rethinking the process instead of just the tasks, Ford cut its accounts payable headcount by 75%, getting rid of the mismatches and paying suppliers faster.
The Core Principles of Reengineering
Hammer and Champy outlined several recurring principles they observed in successfully reengineered companies:
Organize around outcomes, not tasks. Instead of having one person handle one part of a process, have one person (or a small team) perform all the steps. This creates a "case worker" who has ownership of the entire process from start to finish.
Have those who use the output of the process perform the process. Don't separate the people doing the work from the people who need it. For example, if a sales rep needs a custom quote, give them the tools and data to generate it themselves instead of sending a request to a separate pricing department.
Treat geographically dispersed resources as though they were centralized. With modern technology, a shared database can allow everyone in the company to access the same information, eliminating the need for redundant local data storage and staff.
Link parallel activities instead of integrating their results. If multiple teams are working on different parts of the same project, don't let them work in isolation and then try to bolt their work together at the end. Have them communicate and coordinate continuously throughout the process.
Put the decision point where the work is performed, and build control into the process. Empower employees to make their own decisions. Give the person on the phone with the customer the authority to solve their problem, rather than forcing them to escalate it up a chain of command.
Quick Start Guide: Thinking Like a Reengineer
While full-scale reengineering is a massive undertaking, you can apply its principles to your own work.
Identify a Broken Process: Think about a process in your company that is slow, complex, or frustrating. It could be anything from onboarding a new employee to fulfilling a customer order.
Name the Process and Its Outcome: Give the process a clear name, focusing on the beginning and end (e.g., "New Product Idea to Market Launch"). What is the valuable outcome it's supposed to produce?
Map the "As Is" Steps: Trace the path the work currently takes. Who does what? Where are the handoffs? Where do delays and errors occur? Don't be surprised if the map is shockingly complex.
Ask the Obliterating Question: If you were starting from a clean slate, what would be the simplest, fastest way to get from the start to the desired outcome? What if you could ignore all existing job titles, departments, and rules?
Look for Reengineering Patterns: Can one person become a "case worker" for the whole process? Can you give the people who need the output the tools to do the work themselves? Can you use a shared database to eliminate redundancy?
Final Reflections
Reengineering the Corporation was one of the most influential and controversial business books of its era. It captured the imagination of executives worldwide with its promise of "dramatic improvement" and became a blueprint for corporate transformation in the 1990s. However, it also developed a dark reputation. Many companies used "reengineering" as a euphemism for ruthless downsizing and mass layoffs, a legacy that even Michael Hammer later lamented. Despite its misuse, the book's core message remains profoundly relevant. It forced business to pivot from a task-based to a process-based view of work, a shift whose impact is still felt today. It serves as a powerful reminder that sometimes, the only way forward is to stop paving the cowpath and find a completely new way to get home.
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