Manage Your Business for Breakthrough Competitive Advantage
Your business consists of capital investments, performance utilizing capital, and results produced
Your business is defined properly as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. Your business consists of three components that must be organized in one business structure for effective business management:
- Results: Economic outputs of volume, value, and quality essential for business success
- Capital: Investments in solutions of worth to be utilized by the business
- Performance: Utilization of solutions for costs and effectiveness to produce specific results
The business structure for any part of your business looks like a spreadsheet with results required organized in columns across the top and capital utilized organized as solutions down the rows. A cell is a performance domain where a solution is deployed with cost and effectiveness exceptions to produce a result. Solution rows utilized down one result column total the cost, value-added, and quality for the result volume. Result columns that utilize a solution across one row total the cost and effectiveness of solution performance.
The enterprise organization structure is the fatal error of 20th century management
Instead of organizing your business structure, a fixed enterprise organization structure is laid over your business, so your business cannot be managed. Management structures like corporate plans, processes, budgets, functions, accounts, cost activities, systems, etc define the enterprise differently causing business and information complexity. Rectifying structures for data reconciliation, scorecards, IT architectures, etc just compound business organization and management problems and increase IT overheads.
20th century management structures prevent business management
You make significant investments in capital, but cannot plan return on investment, manage development of specific solutions needed by the business, determine worth of solutions to the business, measure solution return, or capture costs incurred in utilizing the solution. You must produce results from supplier input results, along a value-quality chain to produce final results that satisfy a customer willing to pay. But you cannot manage the value of results or determine performance cost and effectiveness, value-added, and quality result by result along the chain. Every business decision and change involves results to produce and solutions to utilize. But you do not have information to support decisions or the business structure to manage change.
20th century management is a dead-end that causes unsolvable problems
Rigid 20th century management structures conflict with the changing business causing well-known problems with reorganization, alignment, investments, capital development, intangible assets, value, costs, quality, worth, business change, corporate governance, outsourcing, business collaboration, and on and on. These problems continue, because they cannot be solved by laying new structures over the business. The problems can persist because all enterprises have the same problems. But soon, enterprises that organize and manage the actual business will gain breakthrough competitive advantages and these unsolvable problems will become serious competitive disadvantages.
Result-performance Management organizes the business for 21st Century Management
Result-performance Management (R-pM) organizes the current business structure and plans strategic value and capital development by result in a strategic business structure. Result goals by period plan strategic value creation. Business organization and human personnel solutions deployed establish result responsibility. R-pM clears away structures laid over the business and uses the current and strategic business for all organization, planning, direction, control, and governance.
R-pM provides competitive advantages not possible with 20th century management
R-pM provides one set of complete and accurate information on performance costs and effectiveness, result value-added and quality, capital worth and returns, and other precise business descriptors, to support management improvement. R-pM minimizes costs and optimizes customer result value and quality, controls investments and IT use to solutions needed to produce results, develops human capital worth to produce higher-value results, governs convergence of the current to strategic business, and enables proactive change. 21st Century Management conventions enable flexible outsourcing, collaboration, common services and solutions, and supplier and customer integration. 20th century management structures, costs, and unsolvable problems are left behind.
Will your unorganized and unmanaged business be able to compete with an organized and managed business? Use R-pM to organize and manage your business for breakthrough competitive advantages. To learn how, subscribe to The R-pM Toolkit, with free updates as R-pM advances, at result-performance-management.com.
