Why direct the business?
20th century management lays structures over the business to direct the enterprise
The day to day operations of the enterprise today are directed through a variety of structures laid over the business. These structures focus on enterprise performance, which mixes the actions of performance together with the results accomplished. The main structures used to direct the enterprise are:
- Processes, which define the flow of performance across the enterprise
- Functions, which define activities performed by the enterprise
- Information systems, which provide the flow of information processing
- Work assignments and tasks, to perform ad-hoc activities
- Projects, to perform one-time enterprise endeavors
These structures are used to manage performance of the enterprise and to produce results as separate entities, such as products, services, sales, and revenue.
None of the overlaid structures directs the actual business
The actual business consists of results produced, capital available in performance solutions, and performance to utilize solutions to produce each result. None of the overlaid structures direct the utilization of capital solutions to produce results. Most enterprise direction is up to the experience and capability of the manager to make decisions and take actions without a business framework.
Structures used to direct the enterprise do not relate to other management structures
The structures used to direct the enterprise do not relate directly to the structures used to organize, plan, control, and report the enterprise. A prior article showed that certain structures are used to plan the enterprise in strategic maps and corporate plans, financial plans and budgets, information technology plans and architectures, investment and capital development plans, and operational plans. The structures used to direct the enterprise are not connected to or do not necessarily refer to the structures that plan the enterprise. Enterprise direction and management is disconnected among a wide variety of structures that can be contrived and laid over any business.
The business must be organized and planned to provide the basis for business direction
Before the business can be directed, the business is organized using Result-performance Management (R-pM) in the current business structure, and the business is planned in the strategic business structure with result goals and performance expectations by time periods from the current business. R-pM organizes and plans capital that is invested in the business as specific performance solutions, the results that must be produced by the business to create strategic value and business success, and the performance of the business to utilize specific performance solutions to produce specific results.
Once the business is organized and planned, there is a structure for business direction. Business direction manages the utilization of specific capital in performance to produce specific results. Business direction employs the result structure to direct key-results including managers responsible for set-results, and then to direct set-results including managers responsible for lower-level end-results.
Business direction is effected by result managers deployed to direct each result
Each result is produced by a set of managed capital solutions. The solutions include the human capital responsible for the result and other human capital used to produce the result. One human personnel solution is the result manager deployed to produce the result. The result manager directs the utilization of performance solutions to produce the result. The result manager for an end-result is directed by the result manager for a higher-level set-result or key-result until reaching the managed business result under the CEO.
Business direction directs capital development and support, performance, and results produced
Business direction directs results across the business to support capital in capital results, to produce revenues and meet business objectives in revenue results, and to manage capital development and value creation over time in investment results. Business direction manages performance in the utilization of a specific solution to produce a specific result to meet expectations. Business direction manages the result to produce planned volumes and create planned value to reach period goals.
The business forms natural result value-quality chains
The results produced across the business form natural value-quality chains to produce the final results of the business. The routine business is directed by managing result chains across the business to produce value-added that goes into the final results that leave the enterprise and go to the customer. The result chain is directed by a responsible manager and each result is the chain has a responsible manager. The utilization of effective solutions is managed to meet the quality determinates of each result. The quality of each result in the chain is managed to produce a high quality final result. Result goals are planned for each period and production of results is directed to reach goals. Each solution utilized in performance is managed by a performance manager to maintain qualified solutions that meet performance expectations.
New operational results are added to the business structure and directed to meet goals
There is a continual need for new or ad-hoc results to keep the business running smoothly and to meet emerging business needs. The manager over the result sets up a result under the management result. If the result is to be produced by an organization unit, the performance module of the unit is used. If the result requires new capital solutions, the responsible performance manager deploys solutions to be utilized. Result value, goals, and deadlines are established as needed. The performance costs and other data are captured against the result. The result is directed and managed as a part of the business to add result data to higher-level results and record the complete business.
The business structure is used for business organization, planning, direction, control, and reporting
The one business structure is used for all business management. Business processes and information systems are organized as performance solutions used to produce specific results. Functions are defined by the results under the responsibility of an organization unit. Work assignments are defined by assigned results. Projects are organized, planned, and directed through their own business structure. The business is directed result by result across the business to produce results at all levels. Business responsibilities and meeting result goals is transparent across the business. Each manager knows results under his management direction and the results that are a direct responsibility.
This is the article ten under the forum “Why Manage your Business”
The Business Change Forum is now running series of articles under the forum “Why Manage your Business?” to explain R-pM fundamentals for actual business organization and 21st Century Management. This is article ten in the forum. A new article is posted to the forum every Friday.
Visit result-performance-management.com to learn about the breakthrough advantages of R-pM and how you can use R-pM to organize your business for 21st Century Management.
