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Executive Interviews: Interview with Michael Hammer on Change Management
June 2007
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By Dr. Nagendra V Chowdary
To make a mark for oneself in the
field of management (where fads are
fashionable), it takes decades. But
you are a rare exception with your
work on "Business Process
Reengineering" and other process
improvement initiatives. Your coauthored
book, Reengineering the
Corporation: A Manifesto for
Revolution is a definitive testimony of
this. Coupled with your pathbreaking
articles, your research has
been exceptionally admired and
appreciated. Congratulations
professor for having provided such a
remarkable intellectual leadership.
This Interview primarily focuses on
one of your masterpieces,
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"Deep
Change—How Operational
Innovation Can Transform Your
Company"(HBR, April 2004). What
was the trigger for embarking upon a
holistic and thorough research on the
topic? What were the antecedents?
Thank you for your kind words. My
purpose in this work was to
systematize research that I have been
conducting for many years and to
position it in terms that managers
could readily understand. In part, I
was motivated by a view that has been
expressed by Prof. Michael Porter of
Harvard Business School, in which he
argues that operations cannot provide
strategic advantage. My goal was to
show that it can.
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Unlike other subjects, wasn't
Change Management (through
Operational Innovation) an abstract
one? How difficult was it to theorize
and put the research findings in an
understandable and applicable
manner?
Change management is an
essential part of any major
organizational transformation. This
article does not focus on change
management in general, but rather on
the particular idea of changing as to
how operations are conducted. -
What's this "deep change" all
about? Why is it a deep change? Is it
because of the encompassing nature
of the initiatives? Or, has it got to do
with the intensity of operational
detailing that needs to be carried out?
What are the critical success factors
for this "deep change"?
To be honest, I did not choose the title
"Deep Change"; it was picked up by
the editor of the Harvard Business
Review. I believe that the idea refers to
the fact that one is not changing a
superficial aspect of the organization,
but some of its deepest elements, viz.
how its basic value-creating work is
performed. -
What is Operational Innovation?
How is it different from operational
improvement or operational
excellence? Can you give us some
illustrations of these?
Operational innovation is coming up
with entirely new ways of performing
work; operational improvement
means making minor changes in how
work is performed. For instance, a
trucking company recently
transformed its sales process, creating
teams that handled customer requests
instead of sending these requests from
one department to another. This is
operational innovation (and it
reduced the time needed to respond to
customer requests from 30 days to 2
days). Operational improvement
would be, for example, improving the
skills of the people in the old
departments, or giving them better
computer tools—ie., improving what
exists instead of creating something
new. Operational excellence is not a
technique but a goal. -
Is there any difference between
Operational Innovation and Product
Innovation?
They are very different. Operational
innovation is inventing new ways of
working; product innovation means
inventing new products or services. A
company can do one without doing
the other. Some companies do both.
Please note that one area in which one
can perform operational innovation is
product development, the process by
means of which one does product
innovation. -
What are the benefits of
Operational Innovation?
Lower costs, faster cycle times, higher
quality, greater flexibility—all of
which lead to greater customer
satisfaction and improved financial
performance. -
You have observed in the article,
"Operational Innovation is rare. By
my estimate, no more than 10% of
large enterprises have made a serious
and successful efforts at it." And you
have also pointed out, "Operational
innovation is relatively reliable and
low cost." Why do you think the
effort rate is so low? Is it because they
don't see upfront the possible
benefits? Or is it that the leaders are
not well equipped to look at
operational innovation as another
platform for competitive advantage?
The major reason so few companies
undertake operational innovation is
that senior leaders are not familiar
with operations and they do not
recognize the strategic potential of
innovation in the area of operations.
As more companies establish
leadership positions through
operational innovation, I expect that
more companies will become active
in the area.
1.
Change Management Case Studies
2. ICMR
Case Collection
3.
Case Study Volumes
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