Manage one Business Structure to Eliminate the Alignment Problem

Alignment is one of the top 10 problems of 20^th century enterprise management!

Alignment covers many problems arising from conflicts between the actual business and overlaid structures

We keep hearing about alignment problems. Alignment problems are caused because the business is not organized. Alignment problems arise from actual business change in results produced and capital utilized as solutions in performance, which remain undefined and unorganized. Instead, the enterprise is organized, planned, directed, controlled, and reported through separate and distinct structures laid over the business. With every business change, rigid overlaid structures go out of alignment with the business. Many solutions are available supposedly to enable alignment. Many books have proposed alignment solutions. However, in spite of all of these solutions and books, alignment problems remain. The alignment solutions attempt to align organization and management structures with each other with nothing to align against. “Alignments with the business” do not actually define the business to align against.

The alignment problem is eliminated by organizing and managing the business

The various alignment problems are eliminated by organizing the business. The business is organized and managed through one integrated business structure, which aligns all implemented capital solutions with the output results they produce. Then, there is only one business structure and no alignment problem. Structures laid over the business are removed. One business structure is used for all organization, planning, directing, control, and reporting.

The Alignment Problem

The conventional enterprise faces many unsolvable alignment problems

Enterprises today face many well-known alignment problems, such as the following, because of rigid structures laid over the business:

• Aligning the organization and the business. The enterprise organization structure is the fatal error of 20^th century enterprise management and the root of all alignment problems. We organize people, positions, politics, and power in an inflexible organization structure and fail to organize the ever-changing business. The business is not organized, so the enterprise must be managed through other rigid overlaid structures. Reorganization addresses the problem by creating a new rigid organization structure that is closer aligned with the actual changed business, and the cycle is repeated
• Aligning the strategy with the business. This would not be a problem if the strategy was an outgrowth of the business, used to define the strategic future business. But the strategy is created separate from the business as an overlaid corporate plan, map, budget, investment analysis, etc and the business is expected to align with the strategy
• Aligning information systems with the business process. This would not be a problem if information system processing was integrated as part of the business process and if the business process was defined as a solution to produce specific results. But, the information system is separated out as technology. Separate information systems and monolithic business processes are laid over the business. The rigid business process is expected align with the technology in the rigid information system.
• Aligning outsourced processes and internal processes. Most enterprises outsource their management responsibility as well, and have no frame of reference to align in-house and outsourced processes, applications, and other solutions within the business. Input results and output results are not chained together and output results produced by the outsourced and in-house processes are not defined or managed as a set.
• Aligning tangible assets and intangible assets. “Intangible assets” are actually tangible, but “unmanaged” assets. There are two problems: 1) the failure to actually describe and manage “intangible assets”, and 2) the lack of a frame of reference to align all assets. Assets and all capital are utilized separately and not aligned and integrated for efficient and effective utilization.

The fundamental flaw in all alignment methods is the attempt to align tangible capital assets with other capital assets. There is no systematic and accurate method to align assets with assets.

Capital assets must be defined as specific capital solutions. Capital solutions can then be aligned with their output results, as part of organizing the actual business. Solutions that are utilized to produce the same result are then aligned in one business structure.

Therefore, the basic problem is not alignment. The fundamental problem is the failure of the 20^th century enterprise management to organize the business systematically to describe and manage results.

The Alignment Solution

Organize the business to align all capital solutions with output results produced

The solution to the alignment problem is provided by definition by organizing the actual business as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. Result-performance Management (R-pM) provides the knowledge and procedures needed to organize and manage any business. First all the results to be produced by the normal business, such as goods and services, are defined and organized into a chain leading to the revenue and profit results. The investments made in the business in order to produce the results are organized as specific capital solutions. Capital solutions are implemented to produce specific results as a matrix similar to a spreadsheet. Results to be produced are identified in the columns. The capital solutions to be utilized to produce results are described in the rows. The implementation of a specific solution to produce a specific output result is described in the specific cell or performance domain. This provides the framework to align solutions with results. Business transactions are generated as capital solutions are utilized to incur costs and create value in a count of full or partial results produced. Strategies are defined by a strategic business structure to define strategic results to be produced and capital solutions to be developed and utilized time period by period to the strategic horizon.

Every in-house and outsourced capital solution utilized to produce a result is described and managed. Results transformed in sequence are chained through result relationships to have the input results required. All capital solutions are aligned with the output results produced by utilizing the solution. Business processes, information systems, human capital, facilities, management measures, and information are specific capital solutions aligned with each specific result produced. Solutions utilized to produce the same set of results are aligned, and can be integrated to work together.

All enterprise capital investments are defined as specific capital solutions to be aligned, integrated, and utilized to produce specific results

All enterprise capital is organized as business, human, facility, or management capital for professional support. There is a need to align supported capital solutions with results produced, to integrate aligned solutions with similar solutions, and to utilize integrated solutions to produce results. Therefore, capital is further organized as readiness, production, and information capital to bring similar solutions together for alignment and integration to be utilized to produce results. The business organization, human personnel, facility equipment, and management strategy solutions are aligned and integrated as readiness capital to produce the results under the responsibility of an organization unit or manager. The business process, human capability, facility supply, and management tactics solutions are aligned and integrated as production capital to produce a specific result. Business data, human knowledge, facility records, and management intelligence solutions are aligned and integrated as information capital to be delivered or accessed easily to provide information and document results.

All of the internal and external customer, business partner, or outsourced solutions deployed to or implemented for the results that they produce in the business structure are aligned on their performance row against the proper result columns, and thereby are properly aligned with other solutions utilized to produce the same results.

The business organization structure is a professionally-managed capital solution that aligns capital solutions with results

The organization structure is not a management prerogative. The business organization is professionally-managed capital that organizes the business through one business structure. People or positions are not in an organization structure. Human capital is deployed as human personnel capital, where they provide a solution to manage or produce results. The monolithic re-engineered business process is replaced with business process solutions, which contain aligned manual and information system processing to produce the result. The business is reorganized or changed by adding or closing results or by implementing or retiring capital solutions. The current business structure always shows the accurate current business and currently-utilized capital solutions are always aligned with the results they produce.

All results are managed by result managers and all solutions are managed by performance managers to maintain alignment

All capital solutions are aligned and integrated by the result manager to produce the volume, value, and quality in results under his responsibility. Each capital solution utilized is supported by a performance manager to ensure that the solution is qualified to produce the result and is utilized properly  All outsourced or business partner processes and other solutions have in-house performance managers responsible to ensure they are properly qualified, aligned, integrated, and utilized.

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. 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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Three free white papers explain the dead-end 20^th century management problems, such as the failure to plan, account for, and manage the actual business, that caused the economic crisis, the way to eliminate the problems, and a government program to address the crisis by stimulating the economy, solving the problems, building a structure for financial and economic management, and organizing local businesses to flourish in the eventual recovery.

• 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
• A Government Business Management Program to Answer the Economic Crisis outlines a government program to encourage business management, stimulate the economy, restore confidence, organize businesses to flourish in the recovery, and manage economic cycles to prevent future crisis

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This entry was posted on Tuesday, August 25th, 2009 at 01:00 and is filed under:
Forums: Processes and Information Systems, Organization and Management, Business Change Methods, Strategy and Performance Management, Top Ten 20th Century Problems
Topics: Business Process Management, Conventional Management Methods, Information System Implementation, Organization Methods, Outsourcing Management, Result Management
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