Archive for December, 2009

Separate organization and management structures have always been laid over the business causing complexity

Since the beginning, enterprises have implemented organization, process, account, performance, project, IT architectures, administrative functions, and other structures. Each of these many structures must be maintained and managed producing business complexity. Many conflicting entities that define each structure produce information complexity, prevent consistent and accurate management information, and require high-cost information technology overheads. Each structure is fixed and rigid and conflicts with the ever-changing business. Periodically, reorganization and change management is required to bring the fixed structures into closer alignment with the business.

Experts have wanted to find one structure to organize and manage the enterprise as one consistent whole

Over the years, there have been many efforts to create one simple and consistently-defined structure for complete and consistent business data capture, reliable communications, accurate management information, use of common solutions, business collaboration, and other needs. The answer, so far, is to lay higher-level management structures over existing structures to reconcile data from various unrelated structures and to consolidate information. However, until now, no one has defined the one integrated structure that can replace all existing structures and be used to organize and manage any enterprise in any industry.

The one integrated structure has existed all along; it is the business

There is one structure. It has been there all along! That structure is the business itself! [more...]f!

20^th century enterprise management does not enable governance of the corporate business

20^th century enterprise management used by corporations today prevents actual governance of the corporation business. Organization and management structures are laid over the business preventing actual business management. Corporation management receives mountains of reports against structures laid over the business. The reports are inconsistent since each structure defines the corporation differently. The reports are incomplete since actual business data is not captured and reported. There is no consistent framework for business management and governance. The corporation strategy map or corporate plan is different from business processes, projects, and functions, used to direct the corporation, which are different from the chart of accounts, activities for costing, or quality structures used for corporation control. These structures may have their own reporting that is different from corporation management reporting through various performance management control panels, scorecards, etc. The structures laid over the business prevent good corporate governance of the actual corporate business.

Corporate governance is through compliance with rules and regulations

Since the corporation is unable to manage and govern the actual business, corporate governance is not positive in ensuring that the business is properly governed. [more...]s

Why do we have such a problem relating knowledge to our business needs?

Enterprises have a well-known problem in relating knowledge to business needs.This is because enterprises do not organize and manage the business. Dead-end 20^th century management used today lays organization, business process, administration, and a variety of other structures over the business to manage the enterprise. Knowledge is not related to the business; knowledge is related to contrived structures laid over the business, such as an index of subjects and topics.

The business is “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. Knowledge is capital consisting of specific solutions of worth utilized to improve the utilization of other solutions for cost and effectiveness of performance to produce value and quality in results. Knowledge is human capital that increases human personnel capital worth by improving their performance in utilizing various capital solutions effectively and producing higher value-quality results. Knowledge is used to develop specific human capability solutions that are utilized to produce specific difficult results to be of high value-quality,

Enterprises need a systematic way to identify specific business results that must be supported by knowledge, identify specific capital solutions that must be utilized properly to produce the result, define the precise knowledge needed, to relate knowledge to the capability of the user applying the knowledge, to link knowledge to where and by whom it is needed, to understand the value created by knowledge that gives worth to the knowledge, and to get feedback and improvement on the knowledge. This can only be done by managing the actual business.

There are many problems inherent in knowledge management today

Many enterprises make large investments in knowledge, but 20^th century methods that we use to manage knowledge limit the value created and the return of the investment:

• Knowledge is labeled as intellectual capital or intangible assets to relieve us of the responsibility to manage knowledge as an asset of worth
• Knowledge is organized by topics or subject matter, which depend on someone referencing the topic to their job or function to put knowledge to use
• Knowledge is human capital to improve human capability, but it is rarely managed as human capital
• Knowledge is delivered through learning, but learning material is often separate from knowledge
• Knowledge is information capital to contribute to the overall business information base, but is usually separated from other information
• Knowledge is not integrated with the business to be utilized as a capital solution to produce value for the enterprise
• Knowledge gains worth by creating value in business results, but results are not managed and only a few results are supported directly by knowledge

Conventional methods hamper the application of knowledge by using structures that are defined through various contrived entities like department, activity, and object, while organizing knowledge by topic, subject, etc. These fundamental problems prevent knowledge from being leveraged to be high-worth capital utilized in a managed business.

Knowledge is human capital that enables other human capital to utilize specific capital solutions to produce specific results

Knowledge is human capital that must be created and managed specifically to increase human capital worth through the value of results produced. Knowledge is also information capital that must be integrated with business data and delivered where needed to produce specific results and to support human capabilities utilized. [more...].

Most managers think that they manage their business

Do you manage your business? What is the definition of the business that you manage? Ask a manager if he manages his business, and the normal response is yes. Ask for the definition of the business they manage, and they do not have a precise definition. Most will describe the enterprise rather than the actual business.

No company, corporation, institution, or other enterprise manager manages the actual business today. The managers employ 20^th century enterprise management to administer the enterprise. It is impossible to manage the business today, because the business has never been defined or organized properly.

The business to manage has never been defined and actual business management has never been taught

What is the enterprise business? There are many conflicting and imprecise definitions for the word “business”. Proper definition of the business is hampered by the definition of performance to include both the utilization of capital in actions executed and the results accomplished. Business schools and management books teach 20^th century management to administer structures laid over the business, and do not define the actual business or teach us how to manage the actual business.

Outside of our explanations of business management, there is no source of information on the real-life fundamentals of actual business organization and management. Since there has never been a precise definition of the business or teachings or books on actual business management, managers do not know what to organize in order to manage the business.

Business management provides a precise definition of the business

So today, results, capital solutions, and performance in the utilization of capital to produce results continue to be confused by the definition of performance. We must separate results and capital utilized from performance in order to define and manage the business. [more...].

Result-performance Management (R-pM) is the conventional way to organize the business for 21^st century business management. Business management provides a common business structure for business organization, business operations and development, business collaboration, business learning and education, common business services that can be applied to any enterprise, and common business software and solutions that any enterprise can utilize.

An adjunct to the development of business management is the development of 21^st century management conventions and standards. 21^st century management is one consistent and clearly-defined set of business organization and management descriptions, conventions, standards, coding structures, and definitions that eliminate the contradictions, inconsistencies, and unsolvable problems of 20^th century management. R-pM and business management adhere to 21^st century management conventions and standards.

21^st century management is documented in the Business Management Toolkit

Business management is documented in the Business Management Toolkit, your 21^st Century Management Manual. 21^st century management descriptions, conventions, standards, and definitions are also documented in the Toolkit. The Business Management Toolkit is under continuing development. The Toolkit already contains the fundamental documentation needed to begin learning, implementing, and utilizing business mManagement. Those downloading the Toolkit today receive a subscription to all future Business Management and 21^st Century Management advances and documentation as updates to the Toolkit.< [more...]

20^th century management lays reporting structures over the business

Since the business is not organized or managed today, the actual business cannot be reported. Management reporting is against the myriad of organization, management, administrative, and other structures laid over the business. Each structure employs its own terminology and information systems to produce reports on the structure. This produces a myriad of unrelated management reports for plans, business processing, resource planning and utilization, manufacturing, supply chains, customer relationships, accounting, quality control, financial management, human resource management, information technology management and on and on. The reporting possibilities create information complexity with no specific framework to relate all the reporting. Despite all the reports and complexity, there is no direct reporting on the actual business.

We try to bring together information from the diverse structures by adding special 20^th century reporting structures, such as:

• Performance management: Control panels, dashboards, scorecards and various other structures to capture and report information
• Strategic enterprise management: Structures to consolidate defined information from specific information systems
• Data reconciliation: Structures to gather and redefine inconsistent data from diverse systems
• Decision support and drill down: Structures to allow management to search and find information in diverse systems
• Categorization: Structures laid over information to reconcile and restructure information and to manage records, documents, reports, content, and other information sub-sets

These various reporting structures and supporting information systems constitute a large overhead and contribute to rather than solving information and business complexity problems. Management information produced is inconsistent, inaccurate, and incomplete in terms of what is actually happening in the business.

Business management reporting must be against the current and planned business

In order to report the business the actual business must be organized, planned, directed, and controlled as explained in previous articles. Actual business reporting is provided by reporting the three components of the business:

• Results: The economic outputs of value and quality produced across the business
• Capital: The investments in capital as specific solutions that must be acquired and developed to provide the capability to produce future results and that must be utilized in business performance to produce actual results
• Performance: The deployment and utilization of a specific capital solution to incur costs and provide effectiveness in producing a specific result in a performance domain

The business can be reported only by organizing the actual business as current results produced, invested capital available to the business, and performance in the utilization of a capital solution to produce a result. [more...].