Archive for May, 2008

What is the definition of your business?

Have you organized your business? Do you manage your business day by day? What is the definition of the business that you have organized and that you manage? Most managers think that they are organizing and managing their business. But when asked they cannot define the business that they have organized and are managing. They usually define the enterprise, rather than the business, since they have actually organized and are managing the enterprise, and not the business.

It is important to have a clear definition of the enterprise business

It is important to have a precise definition of the enterprise business that is organized and managed. Otherwise, we will never know if we are organizing and managing the actual business. Today there are many conflicting definitions of the word business, none defining what is organized and managed to manage the business. [more...].

R-pM is the natural way to organize and manage a business

Result-performance Management (R-pM) is the natural way you organize and manage your personal business. Your personal business is “the utilization of your capital of worth in performance to incur costs to produce value in your results”.

You plan and produce results in the things you accomplish. You organize the capital you have available in your time, capabilities, residence, tools, equipment, money, plans, instructions, vehicles, information etc to be available to produce results. Your capital has worth in the time and money you invested and in the capability to create value in your future results. You utilize your capital as performance solutions to incur costs and produce value in results, such as a prepared meal, repaired item, arrived at destination, or a good time.

The value of the result must exceed performance costs in order for you to be happy with the result. Your own and your capital’s performance effectiveness produces result quality. Your own and your capital’s performance uncertainty introduces a risk that the result may not be produced, produced late, or not up to your standards. You use R-pM instinctively because R-pM is the only way to organize and manage your personal business or any other business.

At work, you must use contrived 20^th century management

You do not lay organization, account, process, system, administration, or other structures over your personal business. But, on your job, you no longer utilize capital as performance solutions to produce results naturally. [more...].

20^th century management plans the future enterprise and does not plan the business

20^th century management used today develops strategies and plans using maps, corporate plans, budgets, etc that are laid over the business. Corporate plans plan the corporation and are unable plan the strategic value to be created by the business and the capital development needed to create strategic value. The business is not planned and strategies and plans become invalid as the business changes. New plans try to bring the enterprise plans in closer alignment with the current and future business.

The business is “the utilization of capital of worth in performance to incur costs to produce value in results”

Result-performance Management (R-pM) is based on the definition of the enterprise business as “the utilization of capital of worth in performance to incur costs to produce value in results”. This definition includes the current business that must be conducted every day to utilize capital the enterprise invests in to produce results needed for business success. The definition also includes the future business that must be the objective or the business strategy to produce strategic results utilizing capital that must be available when needed?

The management strategy plans the business at the strategic horizon

The strategic business is “the utilization of capital of worth in performance to incur costs to produce value in results at the strategic horizon”. The strategic business is described as management strategy capital. The business strategy, strategic business structure, and business plans to execute the strategy are management strategy solutions.< [more...].

Today’s playing field is level because all enterprises have the same problems

20^th century management continues today, because all enterprises are burdened with the same costs and problems. 20^th century management organizes and manages the enterprise through contrived structures laid over the business. The contrived organization, process, system, account, administration, IT architectures, maps, scorecards, and other rigid structures conflict with the business causing unsolvable problems.

20^th century management is a dead-end that can never solve today’s management problems

20^th century management is a dead-end that causes many unsolvable problems like reorganization, business change management, unknown costs and value, unknown capital worth and returns, intangible assets, sporadic effectiveness and quality management, business and information complexity, rampant IT investments and costs, inaccurate and conflicting enterprise information, little actual business management information, business collaboration obstacles, and on and on. The only solution 20^th century management can offer is to lay new or improved structures over the business. This is a dead-end, since the problems are unsolvable because they can never be solved by more structures laid over the business. The unsolvable problems can only get worse as enterprises grow and IT utilization increases.

R-pM offers the only solution; organize the actual business for 21^st Century Management

But now there is an alternative to traditional 20^th century management Result-performance Management (R-pM) provides the only possible solution by organizing the actual business for 21^st Century Management to leave 20^th century management structures and problems behind. R-pM provides significant cost reductions and value and quality increases that go to profits, minimizes development investments and manages the planned return, and enables collaboration and low cost solutions across businesses. Using R-pM to manage the enterprise business, provides significant advantages over managing the enterprise with 20^th century management. [more...]a>.

Business performance utilizes capital available to the business to produce business results

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”. Every business in the world must produce specific economic output results in order to be successful. Every business in the world invests in capital, in order to have the capital needed to produce output results. Business performance is the actual utilization of capital to produce results.

20^th century business performance includes both actions executed and results accomplished

The 20^th century definition of performance used in business today includes both the actions executed and results accomplished. This definition causes many 20^th century management problems and prevents actual business definition and management. Business performance management, capital development, business processes, management reporting, key performance indicators, etc mix both performance and results produced together as performance. This causes problems today in actually distinguishing and separating results produced from the performance executed.

R-pM separates results from performance to manage the performance producing a result

Actual business performance does not include things accomplished or business results. R-pM separates out results as results produced by business performance and restricts business performance to the activity of the business and actions executed by the business. [more...].

R-pM is a breakthrough to manage the actual business and leave 20^th century management problems behind

R-pM organizes and manages the actual business, “the utilization of capital of worth in performance to incur costs and produce value in results”, without 20^th century management problems with reorganization, business change, business and information complexity, complex and costly IT infrastructures, unknown costs and value, unknown capital worth and returns, excessive overheads and costs from overlaid structures, and on and on.

R-pM is a new natural business perspective requiring little investment or risk

R-pM minimizes capital to that required by the business, optimizes business performance to reduce performance costs and increase result value, and manages result value-quality chains to produce customer input results. R-pM provides enormous competitive advantage, while the investment and risk is minimal. R-pM is mainly a change in thinking, which requires time to take hold. Human capital learns to operate and manage the actual business, instead of structures laid over the business. Existing information systems likely can be utilized as business process solutions, if the business is properly defined and organized.

The existing business is gradually redefined into result value-quality chains and one integrated business structure. Obsolete structures laid over the business and unsolvable 20^th century management problems are gradually abolished. As the enterprise learns R-pM, implementation accelerates and the competitive advantage of R-pM increases until the complete business is organized for 21^st Century Management.

Owners, investors, shareholders, lenders and others with a financial interest must lead the way to manage the actual business

Business owners, shareholders, potential investors, lenders, etc have the most to gain by being among the first to use R-pM. [more...].

What is the business and capital as part of the business?

The business is defined as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. Every business in the world invests in capital needed, in order to utilize capital in performance, in order to produce output results. The capital must have a worth that justifies the investment costs for acquisition or development and implementation as performance solutions.

Capital is the investments in the business to have the capability to produce results

The only reason to invest in capital is to provide the capability to produce results. Capital is all the tangible and intangible assets available to be utilized by the business. Capital includes the business organization, processes and systems, humans and their capabilities, facility equipment and supplies, management plans and tactics, and information capital. Capital has a worth in the capability to create result value-added attributable to the capital over the capital life.

20^th century management fails to organize and manage capital as part of the business

Today, people think of capital as items in an asset register or on the payroll, rather than as items to be managed and utilized as part of the business. Businesses invest in enormous sums of money capital and then fail to identify the specific capital items developed, the costs of developing the capital, the worth of the capital as developed, the utilization of the capital to create value, the cost of capital utilization or consumption as capital worth deteriorates, and the value created to return the original investment. [more...].

20^th century management used today cannot manage business risk as part of the business because the business is not organized or managed. 20^th century risk management is separate from the business and concentrates on areas of proven risk, but does not cover the normal risk that is present and should be managed in everything the enterprise does.

Risk is inherent in every business and must be managed as part of the business. But, risk can be managed as part of the business only by using Result-performance Management (R-pM) to organize and manage the actual business.

Risk tends to be managed by a risk management process

Most enterprises say they manage risk. Many have risk management functions or processes to prove it. Risk is managed by risk management structures laid over the business.

There are specialists and companies devoted to risk management. Many books have been written on risk management. But, do they point us in the right direction or tell us what we really should be doing to manage day-to-day risks we face in our businesses?

Risk is an inherent part of the business

We all face the risk that things we want done or to happen will not be done or happen as wanted. [more...]

The business is defined as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. Every business in the world invests in capital, the capital is utilized in performance, and utilization of capital in performance produces output results. The three components of the business are capital, performance, and results.

The objective of every business is to produce results

Results are the outputs of value that must be produced across the business for success. Revenue management results include products, services, customer contacts, sales orders, revenues, and profits. Revenue support results include advertisement run, market surveyed, customer followed up, etc. Capital management results include payroll paid, human training executed, asset maintained, marketing tactic devised, information created, etc. Investment management results include new product developed, information system implemented, new equipment procured and installed, etc. Every output that must be produced by the business is a result. Results must have a value that exceeds the cost of performance to produce the result for a successful business. [more...]