Years of management problems because of our flawed definition of performance

What does performance really mean?

Performance is one of the most widely used words in describing how the business is organized and managed. Therefore, it is very important to have a precise and usable definition of performance. How do you define performance? What is the definition put forward for your performance management methods or solutions? What does your dictionary say? Does the definition make sense? Are your key performance indicators actually performance indicators? Do your performance management structures actually manage performance? What is performance in our enterprise, and how should we define performance?

Both the activity of performance and the result of the performance are defined as performance

If you look up the definition of performance or performance management, you likely will see that performance defines not only the activity in execution of actions , but also the results accomplished by the activity as performance. Does this make sense? Defining the performance activities and performance results to be the same thing, makes it difficult to manage performance activities and performance results as different things!

The flawed definition of performance is still being copied and used in new structures and books

How can all those writing about performance and management, even today, mindlessly copy this definition, without asking themselves: what if we were to manage performance and results separately to manage the specific performance producing a specific result, instead of mixing them together as performance?

The flawed definition of performance prevents management of the business

Look up the definition of business, as in the business enterprise. The common definition is “the activity of providing goods and services”. In order to organize and manage the business we must organize and manage “the activity of providing goods and services”. Applying the definition of performance, activity is defined as performance and goods and services also are defined as performance, making the business “the performance of providing performance”. This makes it difficult for us to organize and manage the business.

We will continue our years of unsolvable management problems as long as we mindlessly copy the flawed definition of performance. However, we will make a breakthrough to eliminate management problems, when we properly define performance activity to be performance and performance outputs and accomplishments to be results.

Result-performance Management defines the activity as performance and the results as results

The breakthrough definition of performance is in Result-performance Management (R-pM). R-pM organizes the business activity as performance and goods and services as results to organize and manage the enterprise business for the first time. R-pM properly defines results separate from performance, result management separate from performance management, and result metrics separate from performance indicators.

R-pM provides new definitions for the business, performance, and results

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”. The business consists of three components 1) capital invested in the business, 2) performance in the utilization of capital in business activity, and 3) results produced by business performance in goods, services, and other economic outputs.

In order to manage the actual business, we must identify and organize specific capital invested in the business as solutions of worth, performance incurring costs in the utilization of specific solutions to produce specific results, and results of value required for business success that must be produced by performance.

R-pM defines business performance as” the utilization of capital by the business in specific capital solutions at a level of effectiveness to incur costs and create value and quality in specific results”. Performance is restricted to the utilization of human and other capital as managed solutions to produce managed business results. Performance indicators measure the utilization, cost, effectiveness, and uncertainty of performance against performance expectations. Performance management manages the deployment of qualified capital solutions to produce results and the satisfactory performance of capital in utilization.

R-pM defines business results as “economic output from business performance of positive or negative value that can be counted and measured and are produced within a time period against goals to manage capital, produce revenue, or manage investments. All the things accomplished by the business as outputs from business performance are identified and organized as specific results. Result metrics measure the volume, total performance costs, quality, risk, and value added to results from performance against result goals along a result value-quality chain. Result management manages the utilization of deployed capital solutions in performance to produce each specific result.

Result management works with responsible performance management to solve any performance problems with the capital solutions utilized.

R-pM eliminates 20^th century management problems by separately managing capital solutions, performance utilizing solutions, and results produced

Result-performance Management (R-pM) eliminates the performance definition problem and other costly 20^th century management problems by organizing the business for 21^st Century Management. Slash overheads and costs, simplify business management, and boost competitive advantage through R-pM, the only way to organize and manage your business.

Your 21^st Century Management Manual, The R-pM Toolkit, is available today and is under continual development to expand R-pM and refine 21^st Century Management. The R-pM Toolkit is offered at a nominal price to encourage wide use of R-pM. Subscribe to your R-pM Toolkit, and future updates, at result-performance-management.com.

This entry was posted on Tuesday, August 26th, 2008 at 01:00 and is filed under:
Forums: Administration and Capital Management, Organization and Management, Strategy and Performance Management
Topics: Conventional Management Methods, Performance Management, Result Management
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