Manage all Capital Investments to Eliminate the Administration Problem

Administration is one of the top ten problems of 20^th century management

20^th century enterprise management includes wasteful and counterproductive administrative functions

20^th century administration performs a function involving fixed routine tasks. Responsibility is for the function or the process of administering, rather than producing results. Administration is responsible for managing enterprise capital, but few administrators recognize this responsibility, in effect preventing proper capital management. Much capital is assigned to centers or labeled as “intangible assets”, removing it from professional management. Other capital is loosely administered through functions, instead of being specifically managed to produce benefit and achieve a return on the enterprise investment. The emphasis is on administrative performance rather than capital result management.

The solution is to replace administration with professional capital management

All enterprises invest large sums in the business to acquire or develop capital solutions. All enterprise capital investments must be organized for professional 21^st century business management for operation, support, development, and utilization to produce results. Administration is replaced with capital management. Capital managers must produce capital management results to develop, maintain, and improve the worth of capital to provide specific solutions. Performance management, within capital management, deploys and maintains solutions to produce revenue, capital, and investment results.

The Administration Problem

Conventional administrative functions do not recognize the need to manage capital

20^th century enterprise management does not organize and manage capital for utilization by the business to produce business results. Performance management is not properly defined to manage the performance of capital, but mixes actions executed and results accomplished together. Performance management is the responsibility of line organization units, which cannot manage performance of solutions that are utilized across organization units. Performance management must be the responsibility for performance of capital across the business. Administration does not recognize such a responsibility and, in effect, prevents performance management across the business.

Human resources administers employees rather than improving human capital worth and result value-added

Some advanced enterprises may apply aspects of capital and performance management to develop human capital and manage deployment and utilization in practice. But, human resource administration usually administers employees, rather than managing the development and utilization of human capital to create more value in the business and increase human capital worth.

20^th century administration is not managed for worth development, performance costs, and result value created

The 20^th century administration functions are an overhead cost that must be absorbed elsewhere. The 20^th century management does not think of gaining value from administration. There is no real objective for administration other than to go through a routine and often just to do as they are told. Administration has not provided the management needed for intellectual capital and intangible assets. Capital investments are not identified and managed as a set of specific investments of known acquisition and development costs to be supported and utilized by the business to create value and provide a managed return and managed capital worth.

This makes it difficult for administration to feel satisfaction in known achievement, to take beneficial initiatives, and to attract gifted people.

The Administration Solution

21^st century business management separates results and capital solutions from performance. Results are organized across the breadth of the complete business and capital solutions are organized to the depth of the business for each result. Result management is responsible for producing specific results from the utilization of deployed capital solutions. Capital management manages a category of capital utilized as solutions. Performance management, within capital management, manages solutions utilized across results to deploy and maintain qualified solutions for each result.

The business is organized to eliminate the conventional administration approach, and instead, to produce capital management results. Capital management results are organized to utilize management and support capabilities in business analysis, human handling and development, facility capital expertise, and management research and planning.

The business organizes capital to provide the professional capabilities needed for capital management

The corporation gains much benefit from proper development and utilization to create value for each category of capital:

• Business: Business organization, processes, and data are managed as business capital that is specifically tailored to each result produced
• Human: Human resource administration becomes human capital management to manage individual human utilization, development and capital worth, and the knowledge needed to increase worth
• Facility: Financial facilities and all reusable assets are managed as facility equipment. Working capital and consumable supplies are managed as facility supply. Accounting is included in financial, statistical, qualitative, image and document facility record capital to record results and performance
• Management: Corporate planning, internal audit, and other management administration creates and maintains management strategy, tactics, and intelligence capital

Capital is organized and managed to support result managers across the business, who must utilize the solutions to create result value. Capital result managers must produce results to operate, support, and maintain their capital to build capital worth. Part of building capital worth is performance management. Performance management provides qualified solutions to produce results. Performance management monitors the performance of capital to be fully utilized, utilized effectively, and improved as needed to create value in results and to increase the result value-added.

All performance costs incurred in capital consumption and amortization are known and charged to results to know result value-added. Result value created is attributed to specific solutions utilized to manage return on capital investments to date and the remaining worth of each capital solution.

Business capital organizes and directs the business

Business capital is generally not defined today, because the actual business is not organized or managed. Some business capital management is performed as part of Information Technology or in an Organization and Methods unit. Business capital is responsible for maintaining the business organization, providing the business and information system processing solutions, and maintaining business data and access to business information. Business capital requires business knowledge and process/system and data analysis capabilities.

Human capital manages personnel, capabilities, and knowledge

Human personnel capital manages all individuals utilized in the business to be ready to perform. This incorporates human resource administration results. Human capability capital develops, deploys, and maintains the specific human capabilities required by the business processes. Human knowledge capital develops and maintains knowledge required for capability development and the knowledge to utilize specific capital solutions to produce specific results. Human capital requires human handling and development capabilities.

Facility capital manages all tangible assets

Facility equipment capital manages all reusable infrastructure, facilities, property, financial facilities, investments, networks, etc. Facility supply capital manages all consumable cash, supplies, energy, etc. Facility records capital manages all tangible information capital in financial and non-financial records of business decisions and transactions. Facility capital requires administrative ability and experience with the specific capital managed.

Management capital supports management planning and control

Management strategy capital plans and maintains the strategic future business and time period goals and expectations. Management tactics capital maintains the business competitiveness and proper and responsible operations. Management intelligence analyzes internal information and external competition, opportunities, and threats to provide management information on status and forecasts. Management capital requires management analysis and research capabilities.

Capital result managers must support and improve capital to meet goals and increase result value-added

Capital result managers have their own result goals to support, improve, and develop their capital. Performance managers must produce results so that their capital meets performance expectations. Capital result managers control performance costs against the result value created to increase result value-added and enterprise profit margins.

Capital result management is a challenging responsibility that requires motivated and capable management and staff. 20^th century administration management and staff must take up the challenge to prove that they have the motivation and have developed the capability for a role in 21^st century business management.

Result-performance Management (R-pM) provides the knowledge for actual business management

Result-performance Management (R-pM) is the only source of knowledge and expertise on how to manage the actual business. Forward-looking enterprises are now using R-pM guidance to organize and manage their business to gain breakthrough advantages over competitors burdened by unsolvable 20^th century management problems. Business management is explained and documented in the Business Management Toolkit. The Toolkit provides procedures for actual business management and maintains emerging 21^st century management conventions, definitions, and standards. The Business Management Toolkit guide “How to Build Result Value-quality Chains” describes value chains in detail. Management consultants who base 21^st century business management services on R-pM knowledge are licensed to help enterprises learn, organize, and manage the actual business. Business management knowledge and the Business Management Toolkit are available and supported today at result-performance-management.com.

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• How to Eliminate Problems that caused the Economic Crisis explains the major unsolvable 20^th century management problems and the solution to eliminate the problems
• Business management; the only Solution to the Economic Crisis explains how to plan and manage the business to capture business data and provide management the information needed for actual business, corporation, industry, and economic management
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This entry was posted on Tuesday, October 6th, 2009 at 01:17 and is filed under:
Forums: Administration and Capital Management, Human Capital Management, Strategy and Performance Management, Top Ten 20th Century Problems
Topics: Capital Management, Conventional Management Methods, Human Resource Management, Performance Management, Administration
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