The new business agenda

Citation

Hammer, M. (2001), "The new business agenda", Strategy & Leadership, Vol. 29 No. 6. https://doi.org/10.1108/sl.2001.26129fab.003

The new business agenda

Michael Hammer

The 1990s are over and, with them, the time for frivolous ideas: that the Internet changes everything, that entrepreneurship is the answer, that success is easy. Tough times – that is, normal times – are back. Money is tight, competition is intense and customers are more demanding than ever. Business people now need to roll up their sleeves to make their businesses perform better than ever before. It won't be easy, because in today's world customers hold all the cards and have all the power.

The following nine principles were developed by studying how leading companies are succeeding by reengineering the practice of business management. They offer a program for action: an agenda for the first decade of the new century:

1. 1.

   Make yourself easy to do business with. Your customers' biggest gripes are not about your products or services per se; they center on what a royal pain your products are to order, receive and pay for. Take a long hard look at yourself from your customers' point of view, and then redesign how you can work to save them time, money and frustration.

2. 2.

   Add more value for your customers. To avoid the trap of commoditization, in which you fight for minuscule margins against a horde of look-alike competitors, you need to do more for your customers. Do not drop your product or service at the customer's door. Go through the door, see what the customer does next, and do it for them.

3. 3.

   Obsess about your processes. Customers care only about results, and results come only from end-to-end processes. Manage them, improve them, appoint owners for them, and make everyone aware of them. It is the only way to achieve the performance customers demand.

4. 4.

   Turn creative work into process work. Innovation does not have to be chaotic. Bring the power of discipline and structure to sales, product development and other creative work. Ensure that success in these areas is the result of design and management, not luck. Luck has a nasty habit of giving out when you need it most.

5. 5.

   Use measurement for improving, not accounting. Most of your measurements are worthless; they tell you what has happened (sort of) but give you no clue as to what to do for the future. Create a model of your business that ties overall goals to things you control; measure the items that really make a difference, and embed measurement in a serious program of managed improvement.

6. 6.

   Loosen up your organizational structure. The days of the proudly independent manager running a sharply defined unit are over. Collaboration and teamwork are now as necessary in the executive suite as on the front lines. Teach your managers how to work together for the good of the enterprise rather than stab one another in the back for narrow gain.

7. 7.

   Sell through, not to, your distribution channels. Do not let your distribution channels blind you to your final customer, the one who pays everyone's salary. Change distribution from a series of resellers into a community that works together to serve that final customer. Be ready to redefine the roles of everyone involved to achieve that end.

8. 8.

   Push past your boundaries in pursuit of efficiency. The last vestiges of overhead lurk not deep in your company but at its edges. Exploit the real power of the Internet to streamline the processes that connect you with customers and suppliers. Collaborate with everyone you can to drive your cost and overhead.

9. 9.

   Lose your identity in an extended enterprise. Get past the idea of being a self-contained company that delivers a complete product. Get used to the notion that you can achieve something only when you virtually integrate with others. Focus on what you do best, get rid of the rest, and encourage others to do the same.

This agenda for action offers no simple nostrums. It does offer hard-nosed principles for serious people. Every company must apply these principles. Those who do will succeed; those who do not will become footnotes in business history.