How to eliminate business complexity and continue to prevent business complexity
Some enterprises take pride in their business complexity
When you talk to a company manager about employing a standard solution the response is often “Our business is too complex for a standard solution”. This is said with a measure of pride in being associated with a complex business. Is a complex business something to strive for or to be proud of? What is the alternative to a standard solution? Do non-standard solutions simplify the business? What is better, simplify the business to use standard solutions, or continue to develop non-standard solutions that compound existing complexity?
Result-performance Management organizes only the business essentials to eliminate business complexity
Enterprises today introduce business complexity as soon a they create an organization structure that is laid over the business. They then lay more structures for strategy, accounts, business processes, performance management, etc over the business. Each overlay introduces more entities with conflicting definitions to be managed and increases business and information complexity.
Result-performance Management (R-pM) clears away contrived overlaid structures and organizes the business for 21st Century Management. All business organization, planning, direction, control, reporting, and governance employs the current and strategic business structures and only the essential business data entities.
Business complexity is accepted as normal in today’s enterprise
Business complexity is built in to 20th century management methods, so business complexity is accepted as normal. We have no straightforward method to identify and root out business complexity and then to prevent future business complexity. We need to define our actual business in a simple way so that complexity can be identified and eliminated, and prevented in the future.
Business complexity is a misnomer. The business is simply “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. But the business is not understood in 20th century management.
“Business complexity” arises from the contrived structures laid over the business. The overlaid structures prevent direct management of the business and require management of a wide variety of contrived entities. This introduce management complications, since the business itself is not measured, reported, or managed. Business complexity is evident in several areas:
- Excess or low-value results being produced
- Unnecessary or under-utilized capital
- Unknown performance in the utilization of capital to produce results
- Management information and decisions based on various contrived structures that have nothing do with the business
- The conflicting data entities, definitions, and data maintained by separately contrived structures
Business complexity cannot be eliminated because results of value and quality, investments in capital solutions of capabilities and worth, and actual business performance effectiveness and costs are not managed in 20th century management.
R-pM eliminates and prevents business complexity by managing results, capital solutions, and performance
Business complexity can be eliminated and prevented in the future by clearing away contrived structures laid over the business and:
- Defining the high-value results essential to executing the enterprise strategy
- Defining the capital available required as solutions to produce results
- Defining the minimum performance needed to utilize only essential capital solutions to produce each high-value result
Once we do this, we can discontinue performance on excess or low-value results and dispose of the capital solutions that are not utilized to produce a high-value result.
The answer is Result-performance Management. R-pM organizes capital investments in solutions, performance that utilizes a solutions to produce a result, and business results produced. R-pM manages essential data entities to plan and manage results by time periods; manage related enterprises including suppliers for input results, solution providers for external or outsourced solutions, and customers for utilization of final output results; and manage the attributes of the business in descriptors such as industry, product group, customer segment, etc. Any other entity used must be defined by specific results or capital solutions. The business is that simple, when organized by R-pM for 21st Century Management.
Essential high value-quality results are organized in chains required to produce final results that meet business objectives. Capital investments are minimized to specific solutions required to produce specific results. Solutions are deployed to performance domains to be utilized for cost-effective performance to add planned value to the specific results that more than returns the investment in the solution.
R-pM eliminates 20th century management problems
Result-performance Management eliminates the business complexity problem and other costly 20th century management problems. Slash overheads and costs, simplify business management, and boost competitive advantage through R-pM, the conventional method for 21st Century Management.
Your 21st Century Management Manual, The R-pM Toolkit, is available today and is under continual development to expand R-pM and refine 21st 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 all future updates, at result-performance-management.com.
