Replace Capital Development with 21st Century Result-performance Development
All capital development should develop capital, plus business results for return on investment
Every business enterprise must produce output results that lead to goods and service results to create value. An expanding enterprise must produce new results of increasing value. The enterprise needs additional capital in order to produce new results as part of the business. The capital must be acquired or developed, implemented as specific performance solutions, and then utilized to produce improved or new results of increased value. The value added to new business results must justify the capital expenditure to acquire or develop needed solutions and provide the return on investment.
All capital development is really result and capital development to develop capital as performance solutions to be utilized to create additional value in output results produced by the business. The additional value of output results provides the return on the capital development investment. If the performance solutions utilized and the results produced by the business are not managed, result and capital development cannot be managed properly and the return on investment cannot be measured. Even physical capital development, like a new building, produces performance solutions to produce results, be it the enterprise office facility solution or a facility solution to produce lease or rental income results.
20th century management does not organize or manage results or performance
20th century management does not manage the enterprise business, defined as “the utilization of capital of worth in performance to incur costs and produce value in results”. The business has three components: 1. capital available as performance solutions, 2. results required, and 3. performance in the utilization of a specific solution to incur costs and produce value in a specific result.
20th century management does not define specific results produced and performance solutions utilized to be managed as sets. Added result value cannot be managed to provide benefits and specific performance solutions developed cannot be managed to know costs. Capital development is a difficult exercise separate from the business context to develop performance or tangible assets to produce some estimated return on investment. Much capital development and performance solution implementations fail to create the added result value needed for the return on investment.
R-pM manages result and capital development as part of the business for measured and managed return
The answer for all future result-capital development is Result-performance Management (R-pM) to organize the business for 21st Century Management. R-pM manages performance solutions utilized and the business results produced to plan and manage the value added to results. R-pM provides 21st century Result-performance Development to manage new performance solution development to produce new or improved results. R-pM manages each result-capital development project as part of the business with its own project business structure. R-pM manages implemented solution development and operating costs and the additional value-added to results to measure the actual return on investments. R-pM is the essential approach for any new result-capital development. It is all described in The R-pM Toolkit, your 21st Century Management Manual
Result-capital development arises from the business requirements to improve results or produce new results
Result-performance Development is initiated by result symptoms in missing or deficient results. This leads to requirements for new and improved results. Performance solutions are reviewed to define the problems preventing required results. Performance solution specifications are prepared to meet analyzed and refined result requirements. Solutions are defined by professionals for each category of business, human, facility, and management capital. The capital development project is planned to develop the specific performance solutions needed to produce new results. Removing result symptoms provides the value and benefits of the investment. Developing performance solutions incurs the cost of the investment.
Therefore, to plan result-capital development the enterprise must know the specific new and improved results to be produced. The value that is created or increased over a time period must be itemized and totaled to show the value that can be created for the investment return. The specific performance solutions that must be developed to produce the results must be defined to itemize the costs of development and future operation or performance costs of the solutions. Performance solutions include the business and system process, human capabilities and knowledge, equipment and infrastructure facilities, management strategies and tactics, and information solutions needed to produce a high value-quality result. Performance solutions are designed to produce specific results, result by result, along a result chain.
The new result value created can be totaled over the projected payback period. This should exceed the cost of operations to provide a value-added that can be compared to the result value-added with no development. The added value-added to existing and new results over the payback period must provide the return to justify the investment. The new value-added expected after development is backed up by new result goals accepted by result managers to substantiate the development.
Result-performance development projects have their own business structure
Each result-performance development project is its own business with a set of results to produce and a set of performance solutions to utilize. The project business structure supports investment management results in the enterprise business structure.
Every performance solution to be developed with related results is organized as a result in the project business structure. Capital, external assistance, and expenditures assigned to the project are organized as project performance solutions. Result-performance development project management manages the utilization of project solutions to produce project results. Performance solution costs are captured against specific project results. This provides the means to capture acquisition, development, and implementation costs; to establish each result and performance solution as a business data entity; to document each solution and new business result completely; and to create the knowledge solutions to utilize new solutions to produce new business results properly.
Human capital assigned to the project normally is organized in result teams to develop new results and in performance teams to develop new solutions. Team members include those who will utilize and support the new solutions in operation.
New performance solutions developed as project results are implemented as performance solutions to produce the new or improved business results. The solution acquisition and development cost provides the assumed capital worth of the solution and can be amortized against the results produced over the payback period.
Implemented project solutions are utilized to produce planned result value
Users have been involved in the whole operation-development continuum and have accepted result goals to utilize new solutions to produce result value-added. Users are supported by professionals for each category of capital utilized to solve implementation problems. New solution development to improve or enable results is part of the business routine. Result value and performance costs are captured in the general ledger system to know added result value-added over expected value-added with no investment, to manage the specific return on investment for each solution.
R-pM manage result-capital development properly to achieve planned returns
Result-performance Management (R-pM) organizes the business for 21st Century Management. R-pM provides the Result-performance Operation and Development continuum to manage the full cycle of result and capital development to produce planned and managed result value-added return on investment.
R-pM is the only way to manage any result and capital development properly, even if R-pM is not utilized to organize the business. The download “How to Manage Projects in the 21st Century” describes Result-performance Development and proper development project management. Full R-pM learning, procedures, and case examples are provided in the R-pM Toolkit, your 21st Century Management Manual.
