Build a Strong Business Structure for all Planning, Control, and Reporting
20th century management structures laid over the business cause unsolvable problems leading to the economic crisis
Enterprise management today uses a variety of enterprise structures such as organization charts, corporate plans, account charts, processes, information system flows, administrative functions, scorecards, etc. The arbitrary structures do not define the actual business, but are laid over the business to manage the enterprise. The structures do not provide a structure for business management, but rather prevent the business from being managed. The structures are rigid and difficult to change, and the definitions used by the structures vary widely. Data is collected against the structures, not the business. Large quantities of management information are reported against overlaid structures, but actual business management information is not reported. The business changes continually, and conflicts with rigid unchanging structures, causing unsolvable 20th century management problems. Eventually, there is upheaval in “business change” to align overlaid structures closer to the real business, and repeat the cycle.The overlaid structures prevent business management causing the fundamental problem of the economic crisis, the failure to manage the business.
Governments today are not able to solve the economic and financial crisis because they do not understand the underlying problem, the failure to manage the business, and they cannot gain actual business data needed to regulate corporations properly.
R-pM organizes the actual business to provide a structure for 21st Century Business Management
Result-performance Management (R-pM) defines the business as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. R-pM simplifies business management to manage the business directly, rather than managing structures laid over the business. R-pM supports all phases of business management through the business structure. The structure design and framework is not subject to change, but is flexible to change and grow as business components and data entities change. Current and strategic business structures are used for all business organization, planning, direction, control, reporting, and governance.
The business structure defines the business through the three components of any business:
- Results: The economic outputs of value that must be produced by business performance for success
- Capital: The investments in capital solutions of qualifications and worth to be utilized in performance to produce results
- Performance: Implementation of a capital solution in a domain to be utilized in performance and incur the costs to produce a specific result
Any other entity used to manage the enterprise business must be defined by results and capital solutions. Business management is supported by six data entities results, capital solutions, performance domains, internal and external enterprises, business descriptors, and time periods. All the other data entities maintained and reported today are not needed for business management and add confusion, IT resources, time waste, and excessive costs. R-pM is a change in thinking to utilize IT effectively to manage the actual business. Once experience is gained with R-pM, business management becomes natural common-sense.
The objective of every business is to produce planned results of value
Businesses are established to produce results. Therefore, businesses must be organized and managed to produce these results. Results include all economic outputs of value produced anywhere in the business. Results can be counted and measured. Results include inputs to the enterprise such as material and components that are transformed to produce enterprise results. Results also include capital solutions acquired or developed before they are implemented to be utilized in performance. Results include all revenue results along a chain such as product produced, product placed for sale, product included in customer order, customer order booked, customer order invoiced, customer order delivered, customer payment received, revenue booked, product returned by customer, etc along the chain to a final customer result. Results include capital results such as business organization or data updated, human personnel paid or other action complete, facilities or supplies maintained, and plan or management report accepted. Results include investment results such as result research project closed, capital development project closed, and strategic value created. Project results are managed in a separate business structure, sub-ordinate to the closed project enterprise result. All business results produced by the business have common attributes and are managed as one consistent data set in the result structure.
Capital investments in solutions are planned, developed, implemented, managed, and measured to produce result value
Capital solutions include any infrastructure, tool, relationship, method, information, individual time, individual capability, plan, or competitive measure implemented to be utilized to produce a result. Capital solutions include the organization unit, specific business and information system processes, data accessed or updated, management and staff time, developed human capability applied, human knowledge utilized, equipment or financial facilities utilized, cash or supplies consumed, records researched or updated, strategy followed, tactics employed, and customer or competitor intelligence accessed or gleaned. All capital solutions have common attributes and are managed as one data set in the capital structure.
The business structure is built on results to produce, investments in capital solutions, and the utilization of solutions to produce results
The enterprise business is organized by the results that it must produce, the capital invested in the business, and the performance that produces results. Results are organized in the result structure. Capital is organized as capital solutions in the capital structure. The business utilizes capital solutions in performance to produce results. Therefore capital solutions must be related to the results they produce. The performance to produce a result is defined through performance domains organized in the performance structure. A performance domain is like a cell in a spreadsheet, where the vertical result column intersects with a horizontal performance row. A performance domain is defined when a capital solution is deployed from the capital structure and implemented to produce a specific result in the result structure. The domain record identifier is the result identifier plus the capital solution identifier.
Multiple solution domains normally are utilized to produce one result, and multiple result domains may utilize one solution. Performance domains can be defined and redefined at any time to change results and performance. Each domain is under the responsibility of a result manager and a performance manager. The management domain includes the results under one result manager and the solutions utilized under the responsibility of one performance manager. The result manager is responsible for utilizing implemented solutions to produce the result. Each capital category has a capital manager responsible for supporting and improving the capital. Performance managers report to the capital manager and are responsible for the provision and maintenance of qualified solutions to produce results.
Business data is collected on the utilization of every capital solution to incur costs and add to the value of specific results
Real business data is generated when a specific capital solution is utilized in performance to produce a specific result. Therefore, each capital solution must be related to the result produced in a performance domain as a set of data on business performance. All performance domains have common attributes and are managed as one data set in the performance structure. Business performance transactions update the domain record when the capital solution is utilized to produce the result, plus the solution record totals in the capital structure and the result record totals in the result structure. Data sets on all results produced and capital solutions available build the foundation for a business information base and for actual business management reporting that is not possible today with 20th century management.
Current and strategic business structures are used for all organization, planning, direction, control, and governance
The complete enterprise business organization, in terms of all that is done and all the resources used, can be constructed from performance domains, in the current business structure. The business is planned through strategic results and the capital solutions required in domains at the strategic horizon to plan the strategic business structure. Result goals are established for each reporting period from the current business. The basic current and strategic business structures are used for all business organization, planning, direction, control, reporting, and governance, eliminating the need for structures laid over the business. Structures for multiple enterprise businesses provide the architectures for corporate management, business collaboration, and supplier and customer integration. The business structure is consistently defined to enable reporting to governments to consolidate businesses for industry management, market management, and economic sector management.
Result-performance Management (R-pM) is only way to build a business foundation
Result-performance Management is the proven method to build a business structure that will never be obsolete and to eliminate the problems that enable the losses and failures being incurred by enterprises around the world today. R-pM is explained in detail at result-performance-management.com.
The R-pM Solution to the Economic Crisis is explained in free downloads
Three free white papers explain the dead-end 20th century management problems that caused the economic crisis, the way R-pM eliminates the problems, and a government program to address the crisis by stimulating the economy, solving the problems, building an architecture 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 20th century management problems and the R-pM solution
- The Only Solution to the Economic Crisis explains how R-pM manages the business to capture actual business data and provide management the information needed for actual business, corporation, market, industry, financial, and economy management
- A Government Business Management Program to Answer the Economic Crisis outlines a government program to encourage business management and manage economic cycles to prevent future crisis
These three white paper downloads are available to R-pM Community Members at Result-performance Management.com. There is no cost or obligation to join the R-pM Community. Join by entering your email and password. Your email address is protected and used only for download problems and occasional R-pM Member news and white papers.
