Lisa Hershman: An interview by Bob Morris

Posted on: May 26th, 2011 by bobmorris

Lisa Hershman is a seasoned business professional and author, who brings a wealth of real-world experience and an innovative style to her position at Hammer and Company. Prior to joining Hammer and Company, she served as Corporate Senior Vice President of Operational Excellence at Avnet, Inc., the world’s largest B2B distributor of electronic components and computer equipment. Her successful management of initiatives in the 72 countries in which Avnet has operations led to her being honored with the 2008 Avnet corporate Chairman’s Award.

Hershman’s global implementation of Hammer principles at Avnet led to an extensive multi-year collaboration between Hershman and the firm. Her practical experience, engineering background, and engaging presentation style led to her selection as Michael Hammer’s successor at Hammer and Company. Previously, she had led Process and Resource Development efforts at Brightpoint, a $2 billion provider of integrated logistics services, where she reduced defects per million by 97 percent in 3 months. Her skills as an engineer were honed during her time with General Electric, where she managed a portion of the Seawolf submarine program. She is co-author with Michael Hammer of Faster Cheaper Better: The 9 Levers for Transforming How Work Gets Done, published by Crown Business. She has been published in BusinessWeek as a contributing columnist and also

Forbes.com, CEO Magazine, Fox.com, and has been a guest on Fox Business News – The Willis Report. Hershman earned her degree from Clarkson University, studying engineering and industrial distribution.

Morris: Before discussing Faster Better Cheaper, a few general questions. First, when and why did you embark on a career in business?

Hershman: I credit my close relationship with my father, who was a finance executive at GE who nurtured my interest in business. Even at a very early age, my father took the time to explain relatively complex concepts – business, engineering, finance, etc. – to me. For example, I believe it was in fourth grade that I brought and explained the mechanics of a photoelectric cell to the class. I’m sure no one else found the concept as fascinating as I did. After that, I wanted to be an inventor and knew I always wanted to run a business. During my first year of college, I realized that my passion not only revolved around innovation, but also the mechanics of how businesses work.

Morris: What do you know now that you wish you knew when you began your business career?

Hershman: Many business leaders who claim to believe in change are very likely to fall back into the same old bad habits as soon as the crisis of the moment is over.  People are creatures of habit despite their best intentions.  True, lasting organizational change requires top level leadership, a formalized structure and patience.

Title matters. I always got a kick out of people who would tell me “trust me, title doesn’t matter”. They are always the ones that already have the title! While generationally, the title stigma is starting to change, it is still a “first impression” – highlighting your importance or accomplishments.

Morris: When did you first become aware of Michael Hammer?

Hershman: I first became aware of Dr. Hammer during the “Reengineering the Corporation” tidal wave after the book was released.  It was truly revolutionary thinking. Unfortunately, it became a convenient excuse for layoffs by some who didn’t truly embrace the underlying concepts.  Undoing the Industrial Revolution is the shorthand phrase for challenging business leaders to rethink the way they do business.  Virtually all company follow that century old model of organization without examining whether it truly meets their business need and reflects the latest advances in technology, logistics and supply chain. True reengineering is about changing the way people work to increase efficiency through process, not eliminating workers.

I had a wonderful opportunity to work extensively with Michael during my time leading operational excellence for a company with operations in 73 countries.  It gave me the challenge of the practical implementation of Hammer’s theories in multi-cultural settings.

Morris: When did you be come associated with Hammer and Company?

Hershman: After I took my first class with Michael, I knew I wanted to learn more. I completed my mastery classes and attended a number of conferences. He was interested in the success we were achieving in a large scale implementation of his theories. A short time later, he asked me to be a speaker at his conferences and to collaborate with him on Faster, Better, Cheaper.

Morris: Please explain how and why you joined the firm.

Hershman: To me, being named Michael Hammer’s successor was unbelievable. He was someone I respected so much as a person and I saw the powerful results that could be achieved by implementing his techniques. I saw the position as a real opportunity to do honorable work that had a direct, positive impact on business.

Morris: Michael Hammer died in September of 2008. Were you CEO at that time or were you appointed CEO later?

Hershman: I was asked to join Hammer later. I was still working at Avnet when I learned of his passing. It was heartbreaking. Just a few weeks prior to his passing, we had dinner. He knew of my extensive global work and asked if I would help him grow the business. After his passing, I received a call from Michael’s widow asking if I would help the business and teach the upcoming 4-day class in January 2009.  Shortly thereafter, she asked if I would consider coming on board as the CEO.

At the time, I was also considering offer to become a C-level officer at my existing employer.  After a great deal of soul-searching, I knew that the opportunity to preserve and expand Hammer’s foundational principles was worth taking a risk. The CEO at my current employer was surprised, but was very kind, and said that if I were you, I’d do the same thing. It was a once-in-a-lifetime opportunity. His words meant a great deal to me.

Morris: Were you involved in the writing of Faster Cheaper Better from the beginning? If not, when did you become involved?

Hershman: Yes, but I didn’t realize how much of my work he had included in the draft. Michael and I spoke and emailed many times about several topics of the book. The manuscript was what led his widow to contact me – she said my work was referenced throughout the manuscript. I was blown away.

Morris: The manuscript was incomplete at the time of his death. Presumably that sad development complicated the process. Then what?

Hershman: There was a great deal of writing and editing that needed to be done at the time of his death. It was important to me that his voice was not lost. I collaborated with a fantastic writer, Doug Sease, who became familiar with both of our styles and helped to bring them both together. I also needed to remove all the writing about my own work – I didn’t feel it was appropriate to keep them in the book since I was the co-author.

Morris: What prior experience had prepared you to complete the manuscript and get it published?

Hershman: My real world experience implementing the techniques featured in the book was a great help. The process of writing a book was new, but I had a great team at Crown Books including John Mahaney, Doug Sease, as well as my agent John Barnett there to call upon as needed.

Morris: According to the firm’s website, “Hammer and Company is a business education and research firm that focuses on cutting-edge issues in operations, organization, and management. The centerpiece of our work is the concept of business process. By redesigning their processes, by measuring and managing them, and by organizing around them; companies are able to achieve unprecedented and sustainable improvements in operating performance.”

Here’s my question. To what extent does the book, Faster Better Cheaper, indicate how specifically Hammer and Company adds value to each of its clients?

Hershman: The book describes in detail the framework and usage of the Process and Enterprise Maturity Model (PEMM™). The model was created and refined by Hammer and Company and its large variety of clients. While the book does not detail or speak specifically to what we do, it does reveal much of the research, through practical stories, of what and what not to do to be successful in process.

Morris: The book’s subtitle suggests that there are “9 levers for transforming how work gets done.” How were they identified? How were they verified?

Hershman: Through many, many years of researching successful and unsuccessful companies, we were able to identify the 9 levers that were common to success (as well as failure when they weren’t addressed). These are not just theories – it was important to publish a book after we had validated the effectiveness of using the tool.

Morris: What are process enablers and why are they important?

Hershman: In the simplest terms, the process enablers – design, metrics, performers, infrastructure, and process ownership – are the five critical elements to obtaining great results.

Morris: Which enterprise capabilities must be in place before embarking on organizational transformation?

Hershman: Hands-down, leadership. While the process enablers obtain results, the enterprise capabilities sustain them. No large change initiatives can succeed without leadership commitment. Many people guess culture as the answer to your question. Culture is simply a bi-product or result of leadership.

Morris: In the Introduction, there is an observation that work must become an “end-to-end continuum? Why? And to what extent is co-creation needed to establish and then sustain that continuum?

Hershman: End-to-end is critically important, as most organizations have become a compilation of departments and struggle to function effectively as a whole unit. These departments have their own metrics, strategies to achieve goals, infrastructure, resources, budgets, etc. Since they are organized and operate that way, they become sub-optimized and function almost as small, individual organizations with their own definitions of customer and needs, rather than a collective force serving the customer.

Morris: You and Hammer suggest that there are seven principles of design. Does the success of the given initiatives require mastery of all seven?

Hershman: Not at all. The seven principles are used as a bit of a checklist to challenge current work. For example: asking some organizations whether a step is necessary is usually met with a reaction that includes “of course it is”. Once you start asking the questions why and how it impacts the end results, it starts to put the work in a different context and the answer changes. A simple, working knowledge of the seven principles is sufficient to start challenging your current work ‘habits’ and reveal new ways to work when focusing on the end results.

Morris: Which of the seven seems to be most difficult to master?

Hershman: Who. We are so focused on who (individual, area, or department) that it is hard to think outside of that box. For example, who says that the Credit Department is the only group that can perform a credit check? Perhaps expertise in credit can be leveraged more effectively while a sales person could benefit from a more immediate answer and perform the credit check themselves. For this reason, I always recommend that organizations examine the current state with the individuals/ departments as part of the diagramming (such as a swimlane), but never design a future state process with any departments identified.

Morris: What is the “20-60-20 Rule” and why is it important?

Hershman: The 20-60-20 rule speaks to the environment of change. There will be 20% of the people you engage who will support process passionately – they get it and want to be involved. The other 20% will hate it no matter what. These two groups are usually very influential. You need to reach the 60% of the undecided vote. This will help you manage both support and criticism effectively.

Morris: Which of the “seven deadly sins of measurement” seems to do the most damage? Why?

Hershman: Probably Frivolity. If measures are questioned or not taken seriously, it won’t matter if you have good, bad, accurate, or inaccurate measures. Frivolity in an organization indicates that if you don’t like a measure, you can question or challenge it and the whole system loses its integrity.

Morris: What are the dominant characteristics of what are characterized as “robust” metrics?

Hershman: They usually are expressed in a voice of the business and voice of the customer balance and can be applied end-to-end. For example, measuring a perfect order is a metric that is growing in popularity. It addresses customer needs, gives insight into business needs (such as inventory availability, inspection, rework) and can be applied from the beginning of a process through to the end. What I like about this metric is that individual organizations can customize it for their client’s and their needs.

Morris: In Chapter 3, there is extensive discussion of “taking ownership.” For those who have not as yet read Faster Better Cheaper, what specifically does that mean?

Hershman: Ownership refers to owning the process across functions. The process owner owns the design and the functional leaders own the implementation. Both are aligned through the measures and results of the process.

Morris: At the conclusion of most chapters, you provide lists of “dos and don’ts” and I was especially interested in those in Chapter 4, “Performers and Infrastructure.” You list four “don’ts.” In your opinion, is any one more important than the other three? If so, why?

Hershman: There isn’t one that is more important. If any are neglected, they can cost you dearly in terms of performance and even dollars (such as IT investment). There are really many don’ts – I narrowed it down to the 4 most critical.

Morris: Many of the barriers to process improvement are cultural, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.” Based on your own direct experience, what you have observed, and what others have shared with you, what seem to be the most effective strategies to avoid or overcome cultural resistance to change initiatives?

Hershman: Leadership is such a critical part of success. However, even with leadership in place, they have to be in it for the duration. This is not an initiative, but new way of working and running your business. Leadership has to make some very tough decisions that many can’t commit to. And finally, most organizations who consider process as a response to a crisis do not sustain the effort as well as those who are frustrated with the status quo or have a “burning platform” that is not a crisis. Finally, not providing the appropriate vision is a mistake. Everyone wants to be part of something bigger and if that isn’t part of the communication, there is not need to change.

There is something else to remember about process vs. continuous improvement techniques such as six sigma, etc. – process is a combination of art and science. There is no detailed checklist that

Morris: In Chapter 8, you focus on Tetra Pak. What are the most valuable lessons that can be learned from this Swedish company?

Hershman: They have done a remarkable job of showing what process looks like when it is fully implemented and adopted at the top of the organization. They simply run their business by process and their growth and great performance shows the benefit of their efforts.

Morris: What is the Process and Enterprise Maturity Model (PEMM) and what specifically does it offer?

Hershman: The PEMM™ model is a framework that highlights the most critical elements necessary for successful implementation of process. The maturity levels indicate level of performance and provide a roadmap describing the necessary requirements for each of the nine elements, within 4 levels of maturity.

Morris: What are the dominant characteristics of an organization in which it can be of greatest value?

Hershman: Profitable growth. Implementing process can re-focus an organization on what is important (customer and business in balance), make you more efficient, and provides a way, from a customer perspective, to be “easier to do business with.”

Morris: For various reasons, most process improvement initiatives fail. My own opinion is that the process for process improvement itself must be improved because many (most?) of those involved soon become confused by the complexity of the methodology (Six Sigma, Lean, etc), frustrated by the pressure, and discouraged by the difficulty. What do you think?

Hershman: I’m so glad you asked this question. I agree with you and will add more. Two things that make me crazy about the implementation of techniques: 1) they are rarely, effectively linked to the business strategy, and 2) those who embrace the techniques become zealots. Both are inextricably linked. If improvement isn’t about improving business, then it is a “pet project” that has a beginning and end. This is so much bigger – it is a philosophy. I tell all of my classes “I want you to be passionate about process and a business zealot. This means you see how process can positively impact business, but your primary focus is improving business. Please don’t engage in process for process sake. End-to-end process should be thought of as the umbrella and all the other tools – Lean, Six Sigma, etc – fit nicely underneath. The other issue is that zealots start to create their own language and get frustrated when others don’t naturally get it. This then leads to over-engineering and at that point, you’ve really lost people. No one wants to feel stupid and sometimes the terms and concepts can be terribly off-putting.

Morris: Which question had you hoped to be asked during this interview – but weren’t – and what is your response to it?

Hershman: Cat or dog person?  Definitely dog.  Our Labrador Recliner, Murphy, will be pleased to have been mentioned…

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You cordially invited to visit these websites:

http://www.hammerandco.com/

http://www.businessweek.com/bios/Lisa_Hershman.htm

http://www.forbes.com/2010/12/13/postal-service-government-bureaucracy-opinions-contributors-lisa-hershman.html


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