Archive for December, 2007

Business change today is not change to the business, but change to structures laid over the business

When people talk about business organization, business management, or business change they think they are talking about organizing, managing, or changing the actual business. But, the fact is that they are not talking about the actual business. The enterprise business, defined as ‘the activity of providing goods and services“, has never been organized or managed.

They are talking about enterprise structures laid over the business. The organization structure does not organize the business. A structure is laid over the business to organize the enterprise. The business changes while the organization structure remains rigid. Reorganization and related change management is not business change. It is change to the overlaid organization to align a new structure closer to the actual business. The organization structure is the fatal error of 20^th century management that prevents the business from being managed.< [more...].

We have been indoctrinated to accept artificial 20^th century management as the way that things are done

All existing business methods, all business school teachings, all new business and management solutions, and all management books produced today propagate artificial 20^th century management. Here at the Business Change Forum we have hundreds of articles that explain the fatal flaws and fundamental unsolvable problems with obsolete and outdated 20^th century management. We explain the use of Result-performance Management (R-pM) for natural 21^st Century management.

Even with all their flaws, 20^th century business organization and management structures are generally-accepted. People do not want to think and analyze to solve problems; they want a ready-made proscribed solution based on familiar methods. But since 20^th century management is a very costly and flawed way to manage, all we do is propagate bad management and unsolvable problems.

Unsolvable problems are unsolvable, when our mind is closed to solutions

The biggest obstacle to solving business management problems is not finding the solution, but opening our minds so that we can see the solution. Even if the solution is right in front of us and should be obvious, we are blinded by a mind that is closed to the solution. The biggest arguments against an innovative new solution are that things are not done that way, it is not what others do, and it requires change. If it was what is always done, what others do, or required no change, it could not be a new solution.< [more...].

Arbitrary organization structures do not organize the business

Current business organization methods are wrong. Arbitrary organization structures are contrived and laid over the business, preventing the business from being managed. The business changes while the organization structure is fixed, causing unsolvable reorganization and change management problems. The organization structure is the fatal error of 20^th century management. Once an organization structure is laid over the business, rather than organizing the business, the business can never be managed.

R-pM organizes the business in one integrated business structure

The only effective way to organize the business enterprise is to organize the enterprise business. The generally-accepted definition of enterprise business is “the activity of providing goods and services“. R-pM organizes business activity in the utilization of capital as specific performance solutions. R-pM organizes goods and services and other economic outputs as business results. The deployment of performance solutions to produce specific results organizes the business in one integrated business structure.< [more...]>

Business change is not change to the business, but to structures laid over the business

We all have heard of business change problems and the need for change management to solve these problems. We assume that business change changes the actual business, and that business change management manages change to the business. We think of projects like reorganizations, systems implementation, business process re-engineering, etc as changes to the business. We think that the business never changes until there is a periodic business change project.

One problem with 20^th century management is that no one knows what the business is that is supposedly being organized, managed, and changed, because there has never been a precise identification and definition of the “business”. The fact is that 20^th century “business change” is not change to the business. The actual business is in a continual state of change that we are not aware of because the business has never been defined and organized. The most common 20^th century definition of the enterprise business is the “activity of providing goods and services”. The business changes with each change in business activity, which is the utilization of capital as performance solutions, and each change to goods and services, which are economic output results. 20^th century management has never precisely defined and organized the “activity of providing goods and services”, so actual business change has never been managed as business change.< [more...].

What is the definition of “enterprise business”?

We all have our personal business in the things we accomplish in life, and may work for a business enterprise. But, what is the definition of the business, be it our personal business or the enterprise business? When we organize and manage a business, what is the precise business that we organize and manage?

In our personal business, we naturally utilize our capital in our performance to produce desired results

In our personal business we naturally utilize our time, capability, knowledge, cash, tools, outsourced services, a process, etc to produce a result, such as prepared dinner, arrived at destination, cleaned suit, repaired house, completed report, purchased product, enjoyed night out, etc. The value of the result we produce must exceed the cost of producing the result in order for us to be happy with the result.

The enterprise business is no different than our personal business

The enterprise business is the same. The enterprise utilizes capital in performance solutions, such as human time and capabilities, cash and supplies, equipment, a process or system, etc to produce economic output results, such as a product produced, a service delivered, payment received, a completed report, etc. This is reflected in the common definition of the enterprise business as “the activity of providing goods and services”. This definition shows that the business has two parts; “the activity of providing”, which is business performance, and “the goods and services provided”, which are business economic output results.

The enterprise business definition is “the utilization of capital in performance to produce value in results”

This enterprise business definition as “the activity of providing goods and services” can be reworded as “the utilization of capital in performance to produce value in results”. Therefore, in order to organize and manage the business, we must organize and manage “the utilization of capital in performance to produce value in results”. Read the details in the article “What is the definition of an Enterprise Business” in 21^st Century Management Magazine at r-pm.net. .

What does performance really mean?

Performance is one of the most widely used words in describing how the business is organized and managed. Performance is used in business performance management, human performance management, key performance indicators, performance management systems, and methods like control panels and scorecards, and performance evaluations. 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 methods 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 business enterprise, you will likely find a definition, “the activity of providing goods and services”. If you look up the definition of performance or performance management, you likely will see that “performance” defines not only the activity as performance, but also defines the goods and services and other output results produced by the activity as performance. [more...].

R-pM Community members and R-pM Toolkit users ask questions about identifying and defining business results, such as new product or service developed, products produced, product or service sold, services delivered, capital supported, capital developed, projects completed, etc. Specific questions are answered by email, but we summarize common questions in the series of articles on How to Use R-pM.

Defining business results is new, since results produced by the business have never been identified and managed as a set. First, it is important to designate a capable business analyst to lead business organization capital, so that expertise is developed, and a specialist can guide others. Also, use The R-pM Toolkit, which has layouts, guidelines, and the answers to most questions.

Some businesses simply ask managers to define results they produce. This can provide a first cut, but managers need explanations and guidance. Result teams for the whole business or parts of the business should analyze, brainstorm, and define the results to be produced by the future business, to be explained to and reviewed with management.

Identifying and defining results is difficult at first, but gets easier as understanding and experience is gained. Eventually it becomes the business routine. [more...]