How to develop a strategy that creates managed future value.
In an article on 1 March 2006, we discussed “Evaluating strategies that create future value“, to investigate what value is being created. Value tended to appear at the end of the strategy, and not defined in detail from the start and added to throughout the execution of the strategy.
Value is not just a contrived or calculated number. Value must be planned and managed day by day by organizing the business and managing results. Strategic value is not an estimate or hype. Strategic value is planned by improving current results and developing future results. This is explained in the R-pM community download “Organize your Business with R-pM“.
Many corporations have a mission to create strategic value or customer value
It is difficult to develop a strategy that creates future value, if the enterprise cannot manage the value that it has on hand today. Where is the value in your enterprise today?
Well lets go back to our definition of a corporation as an enterprise that utilizes capital in performance to produce value in results. There it is! Our value is in our results!
How can an enterprise define future value if it does not define future results? How does it get from present value to future value if it does not define present results?
Value must be built from current known value period by period to reach strategic value
In the article, we said that if our strategy is to create value, value cannot just be a slogan or a customer perception. Value needs to be the basis for building the strategy and the basis for managing and reporting progress to execute the strategy.
Our corporate governance needs to ensure that we have a viable strategy to create substantiated future value starting from detailed current value, and that we manage the corporation reporting period by period to create actual value that builds up to the future value for all stakeholders.
To know our current value, we must define and manage results
To know our current value, we must organize the business to define the present results we produce every day. We need to define the value of our present results. We need to get some experience with our results to see how accurate our values are and how values change. Then we can project the value of the results to the end of the year, and compare them with our other plans. Later we could project our results for another year and get some idea of how our results might change and the performance we might need to develop to produce new results.
When we manage current value in results, we can plan strategic value in future results
Eventually we will have a good idea of result value and be able to define our strategy in terms of strategic results and define the strategic result value that we want to create. When we reach this point, we can develop substantiated strategies that create future value.
There is only one method to manage strategic value; Result-performance Management (R-pM)
Result-performance Management (R-pM) is a breakthrough to show us how to organize one integrated business structure for 21st Century Management to manage value as an attribute of all the results we produce in the enterprise, and how to manage costs as the consumption of capital in producing results, to know result value-added. R-pM enables real value management and value chains in the currently managed business structure and strategic value creation in strategic result value and the performance solutions required in the strategic business structure.
21st Century Management eliminates 20th century problems
Result-performance Management (R-pM) eliminates value management, value chain, and strategic value creation problems. Slash costs, simplify business management, and boost competitive advantage through R-pM, the conventional method for 21st Century Management.
Download your 21st Century Management Manual today
Your 21st Century Management Manual, The R-pM Toolkit, is available today and is under continual development to expand and refine 21st Century Management. The R-pM Toolkit is offered at a nominal price to encourage wide use of R-pM. Get your R-pM Toolkit, and future updates, at result-performance-management.com.
