Archive for 'Learn the Basics of R-pM'

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...].

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

The business is defined as “the utilization of capital in performance to produce value 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...].

The business is defined as “the utilization of capital of worth in performance to incur costs and produce value 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...]

Most managers think that they manage their business and make business decisions

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

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

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 dead-end 20^th century management to administer structures laid over the business, and do not define the actual business or teach us to manage the actual business.

Outside of R-pM, 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.

R-pM provides a precise definition of the business

We must separate performance from results using Result-performance Management (R-pM) in order to define and manage the business. R-pM defines the business as “the utilization of capital of worth in performance to incur costs and produce value in results”. [more...].

When business started, the actual business was managed

The common definition of a business enterprise is “the activity of providing goods and services”. In other words, the business is “the utilization of capital in performance to produce value in results”. We all manage our actual personal business to utilize our capital in performance to produce value in results naturally, using common sense.

Several hundred years ago, all business was in individual or small enterprises that managed actual business activity in the utilization of capital available in humans with capabilities and knowledge of the business, business practices followed, management methods and intelligence on customers, and facilities in business locations, equipment, tools, money, and supplies available. They used this capital to produce output results in goods they had to buy, goods produced or improved and relocated, final results in goods and services they had to sell, and money received from sales.

They managed their business naturally by managing utilization of capital in performance to produce value in results. Common sense told them that costs were in the consumption of capital in business activity or performance, and that value created was in results leading to the final goods and services results sold. They realized that customer willingness to pay placed value on the total of raw material results and results in their chain. They realized that profit results came from result value-added that exceeded performance costs. They realized that they had to invest in capital as specific performance solutions to be able to produce results, and that result value had to increase to repay the investment. They realized that performance in capabilities and tools had to be effective to produce a high-quality result. They realized that capacity in time, capabilities, and facilities limited the volume of results produced. They realized that performance uncertainty in producing results as needed posed risk that final results would not be produced as planned. To reduce risk, they managed the performance utilized to produce each result one by one in the chain of results needed to produce final results for their customers.

When businesses grew, enterprises were organized and managed rather than the business

In recent centuries, as businesses grew, the complete sets of capital employed and results produced became difficult to manage. There were no information systems to help manage the actual business. So, enterprises in companies, associations, and institutions were formed. New structures were contrived to manage the business enterprise, rather than the enterprise business. [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...].

Result-performance Management (R-pM)

Result-performance Management (R-pM) organizes and manages the business as one integrated business structure.

The business structure is like a big spreadsheet with performance solutions, the invested capital utilized by the business, down the rows; and results, the economic outputs produced by the business, across the columns. A cell denotes a specific performance solution utilized to incur costs and to create value in a specific result.

R-pM Basics are presented in six articles

This forum ‘Learn the Basics of R-pM” contains six articles to answer the basic questions about Result-performance Management.

• What are Results?
• What is Performance?
• What is Result-performance?
• What is Result Management?
• What is Performance Management?
• What is Result-Performance Management?

View these articles to learn the basic components of R-pM.

Join the R-pM Community for valuable details on using R-pM

More details are available at Result-performance-Management.com.

The R-pM Toolkit, your 21^st Century Management Manual, provides extensive guidance and procedures covering:

• R-pM Concepts
• R-pM Applications
• R-pM User Support
• R-pM Management Consulting
• R-pM Case Studies

Join the R-pM Commmunity to download the R-pM Toolkit. R-pM Community members need only provide their email address, and are provided with updates to the R-pM Toolkit, as they are released. The R-pM Toolkit is essential to gain the competitive advantages of the 21st century enterprise.

The R-pM Community area also has information on R-pM opportunities for enterprises, management consultants, and business and software solution providers.

21^st Century Management eliminates 20^th century problems

Result-performance Management (R-pM) eliminates costly 20^th century problems. Slash costs, simplify business management, and boost competitive advantage through R-pM, the conventional method for 21^st Century Management.

Download your 21^st Century Management Manual today

Your 21^st Century Management Manual, The R-pM Toolkit, is available today and is under continual development to expand and refine 21^st Century Management. Get your R-pM Toolkit, and future updates, at result-performance-management.com.>.

What are Results?

Every enterprise produces economic outputs. These outputs are results, even though they are not called results and are not managed as entities in a set of results. Some results are identified as separate entities such as; design completed, material item received, machine maintained, product produced, business service rendered, production waste recovered, order delivered, etc. Some results are managed separately as their own entity.

Other results usually are not defined or managed, such as business organization updated, new person recruited, capability development completed, knowledge document created, computer network hour operated, supplies procured, record transaction processed, strategy approved, pricing policy initiated, market study completed, investment justified, etc.

Results are distinct occurrences and accomplishments that can be counted and measured. Plans and goals can be set for results by time period.

Why manage Results?

It is very important for the enterprise to manage results. [more...]>.