Reorganization is one of the top 10 problems of 20^th century management

The enterprise organization structure is the fatal error of 20^th century management

Why do we have to reorganize every few years? Why not organize just once and reorganize gradually as the business changes?

There are many 20^th century business organization theories and methods. Hundreds of books have been written on how to organize the enterprise, organization development, and organization change. There are many so-called business organization methods and structures, but these structures organize the enterprise and are laid over the business. The structures do not organize the actual business, causing the unsolvable reorganization problem.

Result-performance Management (R-pM) is the first structure to organize the business

The enterprise business is defined as “the activity of providing goods and services“. In order to organize the business, we must organize “the activity of providing goods and services”.

Result-performance Management (R-pM) provides the means to eliminate the reorganization problem by organizing goods and services and other economic output from the business as results, and by organizing the capital utilized in business activity as performance solutions. The business is organized by deploying specific performance solutions to be utilized to produce specific results. The business changes whenever management decides to produce a new result, close a finished result, or utilize a different performance solution to produce a result. Since R-pM organizes the results and performance solutions that define the actual business, the enterprise business organization changes naturally with business change.

The Reorganization Problem

20^th century corporate organizations organize people into contrived structures that are laid over the business

The organization structure is the fatal error of 20^th century management. Once an organization structure is laid over the business, the business can never be managed. All 20^th century enterprises organize contrived entities like divisions, departments, sections, positions, processes, functions, etc. The objective is to organize people, rather than the business. The business must continually change in order to survive and grow, but we force the business to adjust to a contrived rigid organization structure, making business change a major problem.

The business changes, but the organization structure remains rigid, causing reorganization and change management problems

As the business changes, the rigid organization structure goes further out of alignment with the business, which builds up pressure for organizational change or reorganizations. Reorganizations are often a disruptive upheaval involving management consultants and charge management services. The new organization is dictated by people, power, and politics rather than organizing the business. One of several bad organization structure alternatives is implemented and the cycle is repeated. Instead of organizing the business naturally, people are forced to accept and adjust to a new arbitrary structure, introducing unnecessary change management problems.

The Reorganization Solution

Result-performance Management (R-pM) provides the means to eliminate the reorganization problem. R-pM organizes the enterprise through the two entities that actually define the business “the activity of providing goods and services”:

• Results: The economic outputs produced by the business to provide goods and services results
• Performance solutions: The capital utilized in business activity to provide results

The business organization structure is a business organization performance solution that maintains the current results to be produced, performance solutions available to the business, specific solutions utilized to produce a specific result, and the relationships between results. The strategic business organization structure shows the strategic results and the performance solutions to be developed and utilized at the strategic horizon.

The business organization structure is not a management prerogative

The enterprise business organization is not an arbitrary structure that management can dictate, since the organization is business capital and the organization structure is a professionally-managed business organization performance solution. Management directs the strategic results and capital development needed, and directs new current results needed and the responsibility and solutions to produce the result. The strategic and current business organizations are then updated and put in place.

The business organization organizes enterprise results and result relationships

The business organization organizes the results to be produced by the business in three levels:

• Key-results: The highest level of result that must be produced for a successful business. Normally there are about 10 to 20 key-results in a business
• Set-results: Mid-range results that organize the business within each key result. Set results define results under common responsibility, results that form value-quality chains, etc
• End-results: The lowest level of results that are produced directly from performance

Result relationships are defined to relate results in the business organization structure, to define results that accumulate or allocate result metrics to other results, to sequence results that comprise a result chain, and to show results that depend on or impact other results.

Once the results to be produced are organized, the capital to be utilized to produce the results is deployed to the results to complete the business organization. All entities, such as unit or area or manager, used to describe the organization or responsibilities are entered as specific attributes of results. Reporting relationships are defined through relationships between higher-level and lower-level results. A sub-set of the business structure can be inverted to show the results and deployed performance solutions under the responsibility of a particular organization unit or manager.

Contrived structures are no longer laid over the business to obscure the view of the actual business. There is no more reorganization, since the business organization solution changes with each result or performance solution change.

Human capital is deployed to produce results, where they have the qualified capabilities

Human personnel and capability solutions are one category of capital and are deployed, where they are qualified and needed to produce specific results. Human capital is not neglected in a center, but is managed continually to develop and improve capabilities to produce higher-value results.

The business organization is maintained using information technology

The reaction may be that the enterprise business is too complex to be organized. The “business” is complex today, because it is not organized. The business capital unit utilizes information technology solutions, to organize all results, performance solutions, deployments, redeployments, etc., enabling systematic 21^st century management. Results and performance solutions are organized at the level needed by management to manage the enterprise business properly.

R-pM is the solution to the Reorganization Problem

The challenge is to actually learn and define the enterprise business in results and performance solutions to organize the business to employ 21^st century management. The challenge is not to implement R-pM. Once the enterprise actually understands its business, organizing and reorganizing naturally with R-pM is easy. The guidance needed is provided in the download “How to Organize the Enterprise Business“.

21^st Century Management eliminates 20^th century problems

Result-performance Management (R-pM) eliminates the top ten problems and other costly 20^th century problems. Slash costs, simplify business management, and boost competitive advantage through R-pM, the conventional method for 21^st Century Management.

Download your 21^st Century Management Manual today

Your 21^st Century Management Manual, The R-pM Toolkit, is available today and is under continual development to expand and refine 21^st Century Management. Get your R-pM Toolkit, and future updates, at result-performance-management.com

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This entry was posted on Friday, January 11th, 2008 at 01:43 and is filed under:
Forums: Organization and Management, Strategy and Performance Management, Top Ten 20th Century Problems
Topics: Change Management, Conventional Management Methods, Organization Methods, Business Transformation, Corporate Governance
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