Archive for 'R-pM Application to Today's Enterprise'

Managers may prevent beneficial business change that is against their vested interest

We all know stories about managers who resist change to protect their own power and authority. How do we prevent damage from vested interests in the enterprise? Is it just up to the Board and CEO to know what is going on? How does the Board or CEO find out? Whom does the CEO listen to? Is there a way to support those with change ideas that are widely considered as good and to counteract those widely considered as bad? Whose head is on the line if profits suffer because beneficial change is delayed? Is it the lower-level manager responsible or the CEO?

Good corporate management and governance requires more than one reporting line

20^th century management methods provide only one reporting line. Responsibility for performance includes responsibility for capital invested, responsibility for utilization of capital as solutions, and responsibility for output results produced. [more...].

The organization structure is the fatal error of 20^th century management

Every day new enterprises are started-up around the world. New enterprises have the one-time opportunity to organize and manage the enterprise business from scratch. These new enterprises unthinkingly adopt obsolete 20^th century management and doom themselves to the burden the unsolvable 20^th century problems discussed here at the Business Change Forum. They waste the precious “green field” advantage of no legacy structures and the opportunity to do it right from the start.

Conventional wisdom says copy an existing business model or organization theory and do not “reinvent the wheel”. This “wisdom” replicates other enterprises’ problems.

Many new start-up enterprises retain management consultants to conduct an organization study. Management consultants still recommend that new enterprises lay obsolete 20^th century management structures over the business, rather than organizing and managing the business for significant competitive advantage.

Do not lay an organization structure over your business!

Once a new enterprise lays a rigid organization structure over the business, the business can never be managed. The enterprise must lay additional management structures over the business. The many inflexible structures conflict with the business causing unsolvable 20^th century problems with business change, unknown costs and value creation, unknown capital worth and investment returns, excessive IT and other capital overheads, mismanaged capital development, business and information complexity, unsupported corporate governance, alignment, collaboration, and so on.

New enterprises must not waste that precious “green field” advantage

New start-up companies have the opportunity to do it right from the start by using R-pM to organize the business for 21^st Century Management. [more...].

All capital development should develop capital, plus business results for return on investment

Every business enterprise must produce output results that lead to goods and service results to create value. An expanding enterprise must produce new results of increasing value. The enterprise needs additional capital in order to produce new results as part of the business. The capital must be acquired or developed, implemented as specific performance solutions, and then utilized to produce improved or new results of increased value. The value added to new business results must justify the capital expenditure to acquire or develop needed solutions and provide the return on investment.

All capital development is really result and capital development to develop capital as performance solutions to be utilized to create additional value in output results produced by the business. The additional value of output results provides the return on the capital development investment. If the performance solutions utilized and the results produced by the business are not managed, result and capital development cannot be managed properly and the return on investment cannot be measured. Even physical capital development, like a new building, produces performance solutions to produce results, be it the enterprise office facility solution or a facility solution to produce lease or rental income results.

20^th century management does not organize or manage results or performance

20^th century management does not manage the enterprise business, defined as “the utilization of capital of worth in performance to incur costs and produce value in results”. The business has three components: 1. capital available as performance solutions, 2. results required, and 3. performance in the utilization of a specific solution to incur costs and produce value in a specific result.

20^th century management does not define specific results produced and performance solutions utilized to be managed as sets. Added result value cannot be managed to provide benefits and specific performance solutions developed cannot be managed to know costs. Capital development is a difficult exercise separate from the business context to develop performance or tangible assets to produce some estimated return on investment. Much capital development and performance solution implementations fail to create the added result value needed for the return on investment.

R-pM manages result and capital development as part of the business for measured and managed return

The answer for all future result-capital development is Result-performance Management (R-pM) to organize the business for 21^st Century Management. R-pM manages performance solutions utilized and the business results produced to plan and manage the value added to results. R-pM provides 21^st century Result-performance Development to manage new performance solution development to produce new or improved results. R-pM manages each result-capital development project as part of the business with its own project business structure. R-pM manages implemented solution development and operating costs and the additional value-added to results to measure the actual return on investments. R-pM is the essential approach for any new result-capital development. It is all described in The R-pM Toolkit, your 21^st Century Management Manual

Result-capital development arises from the business requirements to improve results or produce new results

Result-performance Development is initiated by result symptoms in missing or deficient results. [more...].

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.

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 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 and the business to consolidate information and reconcile data from other structures. 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!

Processes and systems are monolithic entities laid over the business

Over the past 15 years, corporations and other enterprises have implemented business process and packaged information systems, like ERP, SCM, MRP, and CRM. These processes and systems are laid over the actual business and provided general improvement, but usually still include extra costs and inefficiencies. Often old performance problems remain after new process and system implementation. Many enterprises want to improve their process and system utilization, but lack a fundamentally-sound method. This subject is explained further in the article “How to maximize Benefits from existing Processes and Systems” published in 21^st Century Management Magazine.

R-pM can make significant improvements to existing processes and systems

R-pM provides the method by identifying and managing the actual business that lies hidden under the processes and systems. Performance problems are inherent in specific performance solutions. R-pM redefines processes and systems as value-quality chains, so the enterprise knows the specific results produced and performance solutions utilized along the chain. R-pm integrates the business and system processing as the business process solution and separates other solutions utilized. The enterprise can then solve performance problems with specific solutions, and minimize the performance and maximize the result produced at each link in the chain. This enables the enterprise to solve problems, reduce performance costs, and manage result value and quality across existing processes and systems.

Analyze existing processes and systems as a value-quality chain

The only method available to redefine existing processes and systems is explained in the download “How to Build Value-quality Chains“. The only method to manage business change effectively is explained in the download “How to Manage Business Change“. The only method to manage a business change or capital development project properly is explained in the download “How to Manage Projects in the 21^st Century“. The full details to improve existing processes and systems are provided in The R-pM Toolkit, your 21^st Century Management Manual. These downloads are available now at Result-performance-Management.com. .

Business transformation was big ten to fifteen years ago. But, did it actually transform the business? Did it solve fundamental problems with a sound structure for on-going business success, or did it simply rearrange the management structures that cause business problems?

“Business transformation” could not transform the business, because the business was never organized

The enterprise business is defined as “the activity of providing goods and services“. Organize and manage the business means organize and manage “the activity of providing goods and services”.

20^th century business organization structures never organized the business. If the business was organized, business change would change the organization automatically, instead of having separate reorganization and business change projects. The business changes with every business decision to change business activity or goods and services provided, not every few years when management decides it is time for business change. Since the business is not organized, “business change” and “business transformation” cannot actually change or transform the business.

20^th century management manages the enterprise by laying structures over the business

20^th century management manages the enterprise by laying organization and management structures over the business. Once an organization structure is laid over the business, the business can never be managed. Additional management structures for strategy, business processes, information systems, accounting, performance management, administration, etc must be laid over the business. Management information is reported against various contrived structures, producing inaccuracies, discrepancies, and complexity, without reporting the actual business.

Business transformation changed the organization, business process, information system, and other overlaid structures, rather than organizing the business. The benefits proved elusive and business transformation got a bad name. Some popular “business transformation” methods of the time are generally discredited today.

21^st century management manages the enterprise business as one integrated structure .

In order to organize and manage the business, we must organize and manage “the activity of providing goods and services”. [more...]

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...].

20^th century management does not provide a means to directly manage capital development or business change projects. The results enabled by development and the capital developed are mixed together as performance and are not managed properly. There is no way to itemize investment and business change benefits, plan and control actual development costs, plan the return on investment, or measure the actual return. There is no way to integrate the project and capital development with the actual business. There is no way to manage the enterprise properly as a business, or to manage projects properly as a subsidiary business.

These problems are eliminated by Result-performance Management (R-pM), a breakthrough to enable you to manage projects properly. It is all explained in the download “How to Manage Projects in the 21st Century”, available at result-performance-management.com. The download explains how to plan and manage the new performance to be developed and results of value to be produced by the enterprise business. The download also explains how to plan and manage project performance to produce project results, which are the solutions to improve and add value to enterprise results.

R-pM manages one integrated Enterprise Business Structure

R-pM is a significant breakthrough with one simple objective: to organize the enterprise business for 21^st Century Management, in an easy-to-manage Enterprise Business Structure, defined by only two entities:

• Results: Specific economic outputs that must be produced by business performance
• Performance Solutions: Specific capital that must be utilized in performance to produce results

Results are the inputs to and the outputs from performance. [more...]

There are many business management articles and a lot of talk about value, be it value creation, value propositions, value management, or value chains. With 20^th century management all we can do is write articles and talk. We cannot build actual 21^st century value-quality chains as explained in the new download “How to Build Value-quality Chains“, available now at Result-performance-Management.com.

20^th century management cannot build or manage value or quality chains

20^th century management mixes performance and the output results together as “performance” and manages “performance quality”. 20^th century business process and information systems are directed at a final result and do not specifically define or manage the results leading to the final result. So, there is no way to manage value or to build value or quality chains.

The link in the value-quality chain is the economic output result

Value-quality chains form naturally by organizing the business for 21^st Century Management using Result-performance Management (R-pM). The business consists of two entities.

• Results: The economic outputs from business production that form the links in the chain
• Performance solutions: The capital utilized in business production to produce a result at each link

Any area of the business can be organized by defining the results produced and the performance solutions utilized.

Each result in the value chain has a value, costs, and a value-added

Results form a natural chain of results that starts with input results from suppliers. [more...]

Corporations are governed by enforcing rules, because we do not manage the corporate business

Corporations do not organize and manage the actual business, “the utilization of capital in performance to produce value in results”. Actual business data is not captured and business management information for performance capacity, cost, and effectiveness producing result volumes, value, and quality is not available to govern approved business strategies and plans.

Instead of organizing and managing the capital utilized and output results produced by the business, organization and management structures are laid over the business. These contrived structures prevent the actual business from being managed or governed. Management information does not measure and report the actual business, but measures and reports against contrived overlaid structures, such as corporate plans and budgets, business processes, charts of accounts, scorecards, and the like. This requires a large effort by the corporation to collect duplicate and conflicting data related to each structure and to process high volumes of reports that do not report the actual business.

Corporations can only govern by enforcing rules and regulations. 20^th century management always addresses the corporate governance problem from the governance side with more costly rules and reporting requirements, instead of addressing the large corporate management problem on the corporate side.

We need to govern strategic value creation by managing the corporate business with R-pM

Good corporate governance requires that we clear away contrived 20^th century management structures laid over the business that complicate management, and directly organize, manage, and report the business to simplify management and governance. The means to do this is Result-performance Management (R-pM), as explained further in the article “Seeking Good Corporate Governance by strengthening Bad Governance“.< [more...].