Faster Cheaper Better: The Nine Levers for Transforming How Work Gets Done Well

Today's organizations are running at breakneck speed to keep up with the competition. The problem is that the processes we depend on can't keep up. Jobs have been divided and subdivided again and again to increase efficiency and specialization. But this division of labor has created chaos in many organizations. Everyone is focused on their job, and their job alone. No one really knows, or cares, what everyone else is doing.

This lack of coordination has serious consequences. Orders are sent out wrong or they get lost, shipments are delayed, customers wait, and all the while the staff is running around putting out fires instead of working efficiently and productively.

There has to be a better way, right?

Well, that's what "Faster Cheaper Better" is all about. In it, we learn how to reorganize and rethink the way we work so that in the end, the entire organization is working towards the same, unifying goal. The book's focus is on the end-to-end process, which means looking at the way your organization works from the very beginning to the very end.

We then figure out how to get rid of all the steps and processes in our organization that simply don't make sense, and how to develop ones that do.

The information you'll learn in "Faster Cheaper Better" can be applied to any organization. After all, it's about how to make processes faster, cheaper and better. And all of us could benefit from learning how to do this. But the book is particular relevant for people working in manufacturing or direct customer fulfillment.

Michael Hammer is the author of the international best-selling book, "Reengineering the Corporation," and founder of Hammer and Company, a firm focusing on managerial innovation and process enterprise. He died in 2008. "Faster Cheaper Better" was then finished, and published posthumously, by co-author and current CEO of Hammer and Company, Lisa Hershman.

Many of you might have already read Hammer's best-selling book, "Reengineering the Corporation," which had a major influence on corporate restructuring in the early to mid nineties. That groundbreaking book argued that task-oriented jobs were becoming obsolete. If companies wanted to stay competitive, they needed to look at their core processes and, starting with a blank slate, completely redesign them.

The two books cover many of the same issues. After all, they're both about process redesign. But "Faster Cheaper Better," which was published roughly 15 years after Hammer's first book, gives us a more in-depth look at process redesign. Why? Well, mainly because Hammer had all that additional time to learn, and understand, the nuances of redesign.

We also get fresh examples that reflect the challenges and issues companies are facing today.

Think of "Faster Cheaper Better" as a re-written version of "Reengineering the Corporation," from an author who'd become both wiser, and more experienced, in the field of process redesign.

So, keep listening to find out what you need to consider when looking at a process redesign, how to avoid the most common error in process redesign, and why it's important for one person to own the entire process.

"Faster Cheaper Better" is divided into three parts, totaling 13 chapters. Part one covers each of the areas we need to focus on if we're going to improve our organization's processes. This includes design, process ownership and leadership. We also learn how to take a hard look at what we should be measuring, and why we're measuring it, so we can successfully implement a process redesign.

Part two gives us strategies to pull it all together and start implementing our plan. We also get several case studies from a combination of real and fictional companies around the world.

Part three is only one chapter long, and this covers the Process and Enterprise Maturity Model. This framework, created by the authors, will help you plan and assess your change efforts as you move forward.

Now, so far this book might sound about as exciting as watching paint dry. But "Faster Cheaper Better" is surprisingly engaging and readable. The authors did a masterful job keeping the information in layman's terms, and their writing style is conversational and, at times, even fun. Thanks to plenty of case studies, many of these complicated concepts come to life. It's easy to see what a dramatic difference process redesign can make when you read these before-and-after stories.

So, first things first. If we want to start redesigning the processes in our organization, we have to start at the very beginning. We have to figure out what our company actually does. Only when we understand what our organization does can we figure out how to do it faster, cheaper and better.

According to the authors, there are seven principles that process design should focus on. Think of these as steps. Whenever you're analyzing a current process in your organization, these seven elements are what you should look at first. These elements include what tasks are performed, whether they need to be performed at all, who performs them and when, and what information they employ.

When you're considering a process redesign, you need to start with one simple question. Will changing any of these seven principles of design lead to better performance?

Of course, the answer won't always be obvious. If you've ever tried to redesign a process in your organization you'll know that bottlenecks and inefficiencies are often hidden or hard to pinpoint. The authors stress that examining these seven principles won't lead to a complete process design. Rather, it might give us an idea for a design.

And, many of you probably already know that coming up with a good idea is the hardest part of the process.

As we look at the processes we already have in place, we have to be careful not to wallow here. The authors say this is one of the most common errors when it comes to process design. We get so focused on what we have that we're tempted to make small changes to improve what's already in place.

If we do this, we're engaging in process improvement. Not process design. And, we won't get very far.

We thought this was a useful warning to include so early in the book. Looking at current processes and creating a strategy to redesign them is really hard sometimes. It's almost too tempting to look at what we have, and come up with ways to make them a bit better. If you're in a management or leadership role, you've likely done this far too many times already.

If we're going to truly create change, we need to avoid taking small steps and go for big ones instead.

When you think about the processes you have in place right now, chances are there's no one in charge of each one, from beginning to end. This is why so many processes end up in a chaotic mess. No one ultimately takes responsibility for ensuring they work correctly, and most of the time they wind up not working at all.

So when we're considering a process redesign, we need create a new role: the process owner. The process owner's role is to take responsibility for the entire process from start to finish. This ensures it will work effectively across all the departments and silos it has to cross in the organization.

The process owner's role is flexible. The only caveats are that they have full support of senior management, and that they have at least some personal clout or power in the organization.

We felt this could be a groundbreaking idea for many organizations. After all, many of the problems organizations face result from silo thinking. One process might go through six or more different departments from start to finish. Without someone to oversee the entire course, it's easy for bottlenecks, mistakes and delays to crop up.

The authors admit the role of the process owner will be new to many readers. Fortunately, they give us a useful case study that illustrates what an impact creating this role can make. And, they spend a great deal of time talking about the details of this new role. So, by the time you're done, it's easy to see what a difference someone in this position can make.

Another important element we need to stop and consider is whether or not a step or process even needs to be done at all. The authors include a great case study about Progressive Insurance that perfectly illustrates this point. Progressive transformed its business by completely upending its claims process. How did the company do it?

They cut out several steps that didn't need to be there at all.

For instance, when a customer has an auto accident they have to file a claim with the agent they bought the policy from. The agent then fills out a report and sends it to a clerk in Progressive's claims department. The clerk logs the form and then delivers it to a claims manager, who then sends it to an adjuster. The adjuster contacts the customer to set an appointment to come out and look at the vehicle.

The adjuster then goes out to estimate the damage, and the claims manager calculates a reimbursement offer for the customer.

All told, before the process redesign, it took five days for the adjuster to see the vehicle, and even longer for the customer to actually get a reimbursement check. This was the industry standard.

Progressive decided that this process didn't need to take so long, especially since it put the customer's life on hold for ten days or more. Through process redesign, the company managed to eliminate most of the steps in the claims process. They cut out the agent, the customer service rep, and the claims manager.

What happens now? The customer calls a toll free number, and a rep there puts them into direct contact with an adjuster. The adjusters, all of whom stay on the road constantly, can often see the customer within hours, not days, of the accident. And they have the power to issue reimbursement checks right on the spot.

Progressive's story is just one of many in this book. By focusing on a key element like whether a task even needs to be done, Progressive made its customers happy, because service went from five or ten days down to one day. Its operating costs went down dramatically. And the company was better able to detect fraud through the new system.

So part one presents an in-depth look at all the elements we should consider when planning a process design. Part two pulls it all together, so we can actually implement some of the ideas we now have.

We need to start by looking at what we're doing, and why we're doing it. For instance, perhaps we want to redesign a process to cut costs. That's all well and good, the authors say, but cutting costs just for its own sake can be dangerous. We might cut costs in an area that negatively impacts the customer, which will lose us even more money.

Cutting costs should only be one goal of a process redesign. Ultimately, we need to focus outward and listen to what our customers and clients truly want. Even if our organization is doing really well, the authors warn us that we're probably slipping up somewhere.

So, go out and talk to your customers. Talk to the people in the billing department, the customer service reps, and even the truck drivers making the deliveries. The people on the front line usually have a lot of knowledge about customers, often far more than managers do. And yet most upper managers never ask these people what customers are saying.

The more you hear what your customers are saying, especially the unhappy ones, the easier it will be for you to see where to start your process design.

After all this digging you might have several options for where to start. It can be helpful to organize these by one of the three main process types.

The first type is core process. Core process is any work your organization does that your customers will pay for.

The next is enabling. Enabling processes support core processes. So, customer service reps and your organization's web delivery option would be enabling processes.

The last main process is governing. Governing processes make sure resources are allocated, trucks are dispatched on time, and the corporate structure is organized.

Most companies want to start process redesign with a core process, since that's where the biggest impact for the customer takes place. The authors agree this is usually a good place to start, since this area often has the most visual payoff. Once you've achieved success here, you'll have more support for the other process redesigns within your organization.

So, what's our last word on "Faster Cheaper Better"?

Despite what must have been a challenging publication, "Faster Cheaper Better" is a practical and engaging book. Many of the concepts could have been difficult to grasp, but thanks to the clear case studies and the authors' friendly writing style, it's easy to move through the book and understand important strategies.

There's no doubt the book will be useful for anyone in charge of making an organization more efficient. And the book's relevancy extends to almost all of us, since most of us use some kind of process during the workday.

If you're at all interested in making your organization more efficient and productive, then don't miss this book. The authors did a great job covering process design from start to finish.

"Faster Cheaper Better," by authors Michael Hammer and Lisa Hershman, is published by Crown Business.

That's the end of this episode of Book Insights. Thanks for listening.