Organize your start-up enterprise, without 20th century problems
New enterprises must not waste that precious “green field” advantage
Every day new enterprises are being organized around the world. As described in the previous post, enterprises go to the drawing board to organize and manage the start up, but they do not know what to draw. So, virtually all of these new enterprises simply adopt generally-accepted 20th century management methods and doom themselves to the unsolvable problems discussed here at the Business Change Forum. These enterprises waste the precious “green field” advantage of no legacy structures and the opportunity to do it right from the start.
Conventional wisdom says copy a business model and do not “reinvent the wheel”. The model involves products, marketing, customers, etc but does not provide a real model or organization for the actual business. New enterprises adopt a typical 20th century organization structure that does not organize or model the business.
Management consultants still recommend that new enterprises lay traditional organization and management structures over the business, rather than organizing and managing the business for significant competitive advantage.
Managers and consultants must employ the best structure available to protect future shareholder worth
Any manager or management consultant involved in organizing a new enterprise has a duty to study all options to protect the worth of the shareholders’ investment.
Most managers and consultants do what everybody else does and erroneously assume that the enterprise organization structure they adopt actually organizes their business. So new enterprises continue to make the fatal error of laying an arbitrary organization structure of organization units, positions, etc. over the business, that prevents the business from being managed. The new enterprise must make large capital investments but cannot identify or manage the capital solutions available to the business or manage performance costs, the return on the solution investment, or the worth of capital for the current and future business. The enterprise produces many output results in order to create value across the business that leads to products and services provided to customers, but cannot manage performance costs and effectiveness along value chains to manage the value-added and quality that contributes to profits and customer satisfaction.
However, the capable professional will learn and evaluate the organization options available to understand the unsolvable problems inherent in 20th century management and use the organization structure that actually provides best business management.
The best organization and management structure is the enterprise business
There is no better organization and management structure than the enterprise’s own business. The definition of the business is “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. The business is organized through three components 1) outputs results required for business success, 2) capital investments in specific solutions in order to be able to produce results, and 3) performance in the utilization of a specific capital solution to produce a specific result. Once the business is organized there is no need to lay additional organization or management structures over the business
Any new enterprise must define the current and strategic customer results that must be produced to create value for business success, the chain of output results that lead to customer results, and the investment needed in capital solutions to provide the performance to produce the results. The new enterprise must organize human and other performance solutions to produce specific results in the current business structure; and plan future solutions needed to produce strategic results in the strategic business structure. No structures should be laid over the business, since they prevent business management and create business and information complexity.
Any new enterprise can use R-pM to organize the business for 21st century management.
Any new enterprise can organize the business for 21st century management today no matter what information or accounting systems are used. Existing information systems are used to manage results and record the business. Organization units and responsibility centers are business organization solutions deployed to produce sets of results. Revenues are managed from the value of customer products and services produced as specific results and expenditures are performance costs incurred in producing the value. Capital solutions of positive worth are managed as assets and specific solutions of negative worth are managed as liabilities. The responsible result manager is a human personnel solution deployed to be responsible for the result.
As shown in the exhibit, the business structure can be inverted to show results produced by capital solutions, such as a result organization unit or result manager.
The R-pM Toolkit provides the learning and guidance on organizing and managing the business of any new or established enterprise. Any toolkit user can contact result-performance-management.com with particular problems not resolved by the Toolkit, and new Toolkit updates will be developed and issued to all users.
21st Century Management prevents 20th century problems
Before investing in 20th century problems, organize your business with R-pM for 21st Century Management to simplify business management and boost your competitive advantage.
The R-pM Toolkit, is available today and is under continual development to expand R-pM and refine 21st Century Management. Learn more about the R-pM breakthrough for 21st century management and subscribe to The R-pM Toolkit, including free updates, at result-performance-management.com.
March 23rd, 2007 at 06:34
[…] Any new company or enterprise established must take advantage of the “green field” opportunity to do it right as explained in the article “Organize your New Enterprise without 20th Century Problems”. R-pM is the only way to organize and manage the business of any new or existing enterprise to eliminate the 20th century problems explained at the Business Change Forum. […]