The Business Performance Problem and Solution
The Business Performance Problem
Businesses develop traditional ways of operations and administration over the years. Practices and methods are installed to meet the preferences of a certain manager at a certain time. They then become the set way to operate. Successive processes and systems are implemented and adapted so that people do not change the way they do things.
The fundamental problem is that business performance structures are overlaid on the business, rather than directly managing business performance in the performance solutions utilized to produce business results.
Business processes are re-engineered to improve business performance and performance quality. Business process re-engineering focuses on defining the process that is overlaid on the business to produce an output result from the process, but does not organize the business to produce output results from the business. Business process management manages quality checkpoint or other contrived methods to manage performance quality, but does not manage the performance of capital utilized within the process.
Enterprise information systems are implemented through conversions as additional overlays on the business, without positive business change. Some transactions are still performed manually or on PCs and the database is not authoritative for the enterprise. The business environment changes but the business traditions remain sacred.
Enterprises organize by function to perform similar tasks rather than organizing to achieve important results. Performance reporting measures level of activity rather than real results. The function is the driver of business practices and methods. Few business functions are directed towards their internal or external customer. Functions are performed whether they are important to the core business or not
Enterprises say they can not apply package systems because their business is too complicated, as though a complicated business is good. They do not simplify their business to use the packaged system.
Enterprises rarely evaluate the cost and benefit of the existing way of doing business. In many enterprises, business processes are re-engineered without changing the functional empire or considering enterprise system needs. Business change is the responsibility of the consultants or change team, rather than the line management. Much business change ends up being cosmetic, rather than addressing the fundamental hard-to-solve problems. Over the years, the cost of business change multiplied while the benefits remained marginal.
The Business Performance Solution
What is “business performance”? The enterprise business is generally defined as “the activity of providing goods and services”. The definition shows that the business has two components. The activity, which is business performance, and the goods and services which are business results. Therefore, business performance improvement must improve the capital utilized in performance solutions. Business performance is improved in order to improve enterprise goods and services and other output business results produced by the business performance.
Businesses cannot improve performance without change. The change must be positively directed toward achieving results, providing customer service and satisfaction, and generating profits. Business performance improvement cannot occur in isolation. It requires integration with systems, people, customers, partners, and management. The line manager must be responsible for improving performance with support from those with the capabilities needed.
Business performance, by definition, is a problem. Business performance does not distinguish the performance of the business, from the output results produced from the performance. Results and performance are mixed together in business processes, performance management methods and systems, and key performance indicators (KPI).
R-pM defines performance solutions utilized separate from the output results produced in order to organize the business. With R-pM, practices and methods are directed toward accomplishing a result rather than performing tasks. The result should be important to the success of the enterprise. If not, perhaps someone else could produce the result better and for lower cost. Accomplishing critical key results is the purpose of the enterprise’s core business. Best practices are not what others are doing, but the best way for the enterprise to produce a high value-quality result. Business processes are replaced by result value-quality chains. Partnerships and extensions to the enterprise are designed as part of the business, result value-quality chains.
With R-pM, business performance is the performance of business capital to produce specific results. Business capital consists of organization, process, or data solutions that are designed to produce that specific result, and cannot be utilized for results in general. Business performance is managed to produce a chain of specific results. The chain is defined by the relationship between results, rather than a contrived process flow. Quality and value is managed for each result in the chain, rather than the futile attempts to determine performance quality or value.
With R-pM, managers are given result goals that require business performance improvement to achieve. In this way, business management and staff are instrumental in devising new methods and putting them to work. With R-pM, they are supported by performance manager responsible for providing good methods and assisting the utilization of the methods.
Solve business performance management problems by managing the business with R-pM
Manage business performance effectively through R-pM. Review the article to learn more about R-pM.
21st Century Management eliminates 20th century problems
Result-performance Management (R-pM) eliminates business performance problems and other costly 20th century 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.
