Adam Smith’s world of division/ specialization fragmentation of work, and sellers’ market mindset are yesterday’s paradigm. Where is the blue print for the future, the genetic code for new knowledge companies? Is time ripe for a fundamental shift from Industrial age designs and values to new ecological economy? Business in this new economy is viewed as a living organism with a web of stakeholder relationships, product cycles, and values-based genetic coding. Organizational management in this broader perspective goes beyond cash flows to life flows (feed stocks, energy, air, water, food, money, people, community, information & ideas), and beyond accountability to shareholders to accountability to stakeholders (shareholders, customers, suppliers, employees, general public, community, environment quality, ecological resources).
Genesis of change

Nothing is constant or predictable in today’s business environment not market growth, customer demand, product life cycle, rate of technological change, or nature of competition. Customers now dictate what they want, where they want it, and what they will pay for it. The mass markets that existed till early 1990s in India, have broken into pieces, some as small as a single customer. Customers today seek mass production plus-plus quality, price, selection and service.

Till early 1990s any company that could get its products/services to the market could get the sale. Not any more. Now, not only more competition exists, it is of many different kinds. Niche competitions have changed the face of every market. With trade barriers falling, no company’s national turf is protected from overseas competition. Just one superior performer can raise the competition threshold for companies around the world. Adequate is no longer enough. If a company can’t stand shoulder to shoulder with the world’s best, it has no place to stand at all.While the customers and competition have changed, so too has the nature of change itself. Change has become both pervasive and persistent. With globalization of the economy, companies face a greater number of competitors, each one of which may introduce product and service innovations to the market. The rapidity of technological change, and shrinking of product life cycles leave no time to develop new products and introduce them to the market. Today companies must move fast and proactively, or they wouldn’t be moving at all.

The three Cs – customers, competition, and change – have created a new world for business. Companies designed to operate on mass production, stability, and growth are today characterized by inflexibility, unresponsiveness, absence of neo-customer focus, obsession with activity rather than result, bureaucratic paralysis, lack of innovation, high overheads- all legacies of over seven decades of industrial leadership in India. Our business problem is that we entered the liberal era with companies designed during the nineteenth century to work well in the twentieth. It needs something entirely different to correct the situation.

Business Process Re-engineering

Re-engineering is the fundamental rethinking, and radical design of business processes to achieve dramatic improvements in critical, contemporary measures of performance, viz cost, quality, service and speed. This definition contains four key words, viz fundamental, radical, dramatic, and processes. Fundamental re-engineering takes nothing for granted, it ignores what is and concentrates on what should be.

Radical is getting to the roots of business processes, throwing away the old and focussing on business re-invention (not incremental business enhancement/ modification improvement).
Dramatic relates to quantum leaps in performance that go beyond fine tuning, and requires blowing up the old and replacing it with something new and superior.Process is a collection of activities that take one or more kinds of inputs, and create an output of value to the customer. Individual tasks within this process are important but none of them matters to the customer if the overall process doesn’t deliver goods in quality, price, selection and service.Companies in deep trouble, companies not yet in trouble, and companies even in peak condition (a great company, after all, is never satisfied with its current performance) all could embark on re-engineering.

Characteristics of Re-engineering

• Several jobs are combined into one, with single point responsibility on Case Team, compressing the business process horizontally 

• Case Team makes decisions compressing process vertically
• Process steps are performed in natural order and in de-linearized mode permitting many subtasks simultaneously and minimizing rework
• Process has specific focus addressing the requirements of different markets, situations or inputs
• Work is performed where it makes most sense eliminating the need for external integration
• Checks and controls are restricted to the extent that they make economic sense
• Reconciliation is minimized due to restricted external contact points
• Case Manager provides single contact point with the customer
• Hybrid centralized / decentralized operations provide both the autonomy and economics of scale.

• Work units change - from functional departments to Case Teams
• Jobs change - from simple tasks to multi-dimensional delivery work
• People’s role change - from controlled to empowered
• Job preparations change - from training to acquisition of knowledge 
• Focus of performance measures and compensation change - from activity to results
• Advancement criteria change - from experience to delivery of results
• Values change - from protective to productive
• Managers change - from supervisors to coaches
• Organizational structures change - from hierarchical to flat
• Executives change - from storekeepers to leaders.

Re-engineering of business process is top driven. Its goals are dramatic improvements in performance. The employees require clearest messages about the need for re-engineering (here is where we are as a company and this is why we can’t stay here - Case for Action), and the goal of re-engineering (this is what we as a company need to become - Vision Statement). The author’s Case for Action, and Vision Statement for R&D  in Ministry of Power (2001) are reproduced here as examples.

Case for Action: (Why R&D) for Indian Power Sector

• The MoP is disappointed at high cost of power (Rs7.5-10 cr/ MW) in India, chronic shortages (10-15 per cent wrt peak load), poor and erratic quality of supply, poor financial health (commercial losses at Rs.24,000 crores in 2000-01), heavy overdues to PSEs (Rs.45,000 crores), and the generally perceived inability, to pay preventing private investments in power sector.
• The leading nations, both developing and developed, have achieved greatly improved power sector because they have established integrated, innovative and highly flexible R&D organizations that operate with a uniform set of work practices and information systems, in both public and private enterprises.
• The MoP has strong economic, environmental and social incentives to leverage plant centric R&D driven reorganization of existing power units, and innovative technology driven enlargement of capacity that envelops all modes of production, transmission & distribution, and incentive-based demand side management including end-use energy efficiency.
• The MoP wishes to achieve pre-determined efficiency improvements in all sectors and sub-sectors of power business with recourse to R&D, Power Sector Reforms, and Policy delineations to achieve its vision of sustainable energy.

• We are a World leader in power production, transmission and distribution, and demand side management by leveraging cutting-edge technology through innovative R&D.

• We have embarked on our path of sustainable energy with a health mix of all energy portfolios suited to our conditions.
• We have maximized the profit potential of the entire power portfolio through accountable R&D.
• We have created, across our operating enterprises, a nation-wide R&D organization with management structures and systems that permit harnessing of our collective development resources responsively and flexibily.
• We have established uniform and more disciplined power sector decision-making, planning, and operational processes across the nation.
• We employ innovative technology-based tools to support our work and management practices at all levels and between all power utilities.
• We have developed, and implemented, common information technology architecture nationwide for transparent decision-making.

Given that the manufacturing sector is largely non-renewable resource based, is intrinsically inefficient (even wrt stocihiometric and thermodynamic limits), shareholder focused, treats economic-environmental-social performance concerns in disaggregated compartments, lacks efficiency-opportunity-relationship focus, and subject to vagaries of government policies on feedstock’s energy, labour, price control et cetra; all in the face of WTO mandates; it is a mute question as to which companies need re-engineering, and over what timeframe. Each company in India requires business process re-engineering with the paradigms of sustainable development and business ecology serving as the polestar. Yet, re-engineering is not a project, it must be a way of life. It is not a destination, it must be a journey.

The author is Director Indian Institute of Environment Management
By arrangement with Kaleidoscope