Archive for the 'Best Practice Management' topic

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!

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 enterprise management problems are caused by rigid structures laid over the business

The generally accepted “business enterprise” definition is the activity of providing goods and services. The failure of 20^th century management to organize and manage the business enterprise in the activity of providing goods and services creates unsolvable management, business, and performance problems.

The fatal error of 20^th century management, employed by all companies, corporations, and other enterprises today, is laying a rigid enterprise organization structure over the business, rather than organizing the business. Since the business is not organized, the business cannot be managed. Therefore, rigid enterprise management structures for planning, processes, systems, financial and cost accounts, quality, administration, performance, reporting, etc must be contrived and laid over the business. Structures laid over the business conflict with the actual business, restrict business flexibility, move out of “alignment” as the business changes, prevent direct business data capture and management, and do not provide the direct management information needed to manage the business.

20^th century enterprise management improvements can never solve unsolvable problems

We continue to teach 20^th century enterprise management, contrive new 20^th century structures and “business solutions” to lay over the business, and write more 20^th century management books, but we have never solved the top ten problems of 20^th century enterprise management.

1. Reorganization: The business changes while the organization structure remains rigid, causing upheavals to lay a new rigid organization structure over the business and repeat the cycle
2. Accounting and Financial Management: Historic legacies focus on cash control and prevent professional records management and modern capital management of the actual business increasing financial risk and preventing accurate business management information
3. Investment Analysis and Development Project Management: Investments and projects are managed separate from the business, rather than itemizing, planning, and managing the costs, benefits, and return of capital development investments, as part of the business
4. Administration: Performing functions, while leaving tangible and intangible capital utilization and improvement unmanaged
5. Performance Management: “Performance” definitions mix actions executed with the result accomplished, so business processes, performance management, and KPIs mix results and performance and manage “performance quality”
6. Business Complexity: Each organization, plan, processes, system, administration, or other structure is defined separately with different definitions creating business and information complexity and preventing business collaboration and common solutions applicable to any business
7. Information Technology: Business systems, data, information solutions, networks, and architectures are designed to process overlaid structures and managed as technology, not capital, creating costly IT infrastructures and continuing capital management problems
8. Change Management: Change management addresses the conflicts between structures laid over the business and the actual business to change structures, while the business remains undefined and unmanaged
9. Corporate Governance: Problems are addressed from the governance side to restrict and control management, rather than organizing the business to be governed by management on the corporate side
10. Alignment: Rigid overlaid structures go out of alignment as the business changes requiring continual changes to the structures to align closer to the business

These and other unsolvable 20^th century enterprise management problems are discussed, in detail, here at the Business Change Forum.

Solutions to he top 10 management, business, and performance problems of 20^th century enterprise management are described in a referenced article.

The top 10 problems are eliminated by 21^st century business management

20^th century enterprise management problems are unsolvable, because they can never be solved by laying new or improved structures over the business. [more...].

Many arbitrary management structures have been contrived over the years

Throughout the 20^th century, various management structures for operating and developing the company have been contrived and refined, becoming the conventional management structures that we use today. The structures organize and manage the company or other enterprise. Structures such as the organization, business processes, accounts, costed activities, system architectures, scorecards, and on and on are utilized to manage the enterprise.

We improve management and effect change by laying new contrived structures over the company or enterprise business. Even with all the enterprise organization and management structures, we continue to have fundamental problems with re-organizations, intangible assets, accounting limitations, cost control, information management, alignment, etc. We still have not found the one right method to organize and manage the company business.

Conventional management structures are the generally-accepted wrong ways

Over the past decades, we implemented breakthroughs like business process re-engineering, business transformation methods, business performance management, and enterprise resource planning. But, these turned out to be just new  conventional management structures laid over the business and other structures to manage the enterprise the same as before.

Why are there so many different management structures to do the same thing? Why isn’t there just one right management structure? [more...].

20^th century enterprise management cannot define and organize real value chains

Much is written about the theory of value chains and various structures have been contrived to lay value chains over the business. But, value chains cannot be defined and organized today, because 20^th century enterprise management organizes and manages the enterprise, but does not define or organize the actual business. The actual business is defined as “investments in capital as solutions of worth utilized for cost and effectiveness of performance to produce value and quality in results”. A value chain consists of a chain of results of value produced in sequence to provide a final result of value to an enterprise customer. In order to build a value chain results, capital solutions that produce results, and the performance of each solution to produce each result must be defined and organized as a sets.

21^st century business management organizes the business to provide natural value chains

Result-performance Management (R-pM) provides the knowledge, concepts, and procedures for 21^st century business management. We cannot build natural value chains, until we organize and manage the business. Business management organizes results as the links in the chain, capital solutions to deploy and implement the capital solutions needed to produce each result, and performance in the utilization of one solution to produce one result. Each link in the chain consists of one result and the capital solutions utilized in performance to produce the result. Result relationships link results in sequence and manage the complete chain.< [more...]>

Methods like Total Quality Management, Six Sigma, and ISO 9000 Standards do not provide the quality management needed

We have had structures like Total Quality Management (TQM) and the ISO quality system for ISO 9000 standards and certification, which were found lacking as a management method. We also reengineered our business process with BPR, specifically to help us manage performance quality. But, performance quality proved difficult to comprehend and manage. Six Sigma provides another structure for our final production quality. Now we have business process and performance management (BPM) to manage the quality of our processes and performance. Even with all this, we still have not found a way to manage quality as the business routine of everyone in the enterprise.

Customer-determined quality is managed result by result by managing the businss

Quality must be managed as part of the managed business defined as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. By definition, in the business, value and quality are attributes of results, the economic outputs produced across a managed business. Result-performance Management (R-pM) provides the knowledge and procedures to organize the business by organizing results produced across the business as one-off results or as result chains and by organizing the capital utilized as solutions in business performance to produce each result. With an organized business, the company can manage quality as an attribute of results, not performance, and can manage real quality for any result, not just final results from production. [more...].

The fundamental problem of 20^th century enterprise, the failure to organize the business

The generally-accepted definition of the enterprise business is “the activity of providing goods and services“. Therefore, the activity of providing goods and services must be organized in order to organize the business. However, 20^th century organization theories organize “the enterprise” into organization units, positions, functions, reporting relationships, etc. to produce a contrived “enterprise organization structure” that is laid over the business. The organization structure is the fatal error of 20^th century management. Once an organization structure is laid over the business, the business can never be managed.

The business must change continually, while the “enterprise organization structure” remains rigid. The rigid organization structure hampers business change, creates change management problems, and eventually creates pressure for reorganization to contrive a new “enterprise organization structure” that is aligned closer to the actual business. If the business was organized, the organization would change with business change.

The solution is to organize the business for 21^st century management

The only way to manage the business properly is to organize the activity of providing goods and services into a business structure. [more...].

Over the past three months, the Business Change Forum published a series of articles on the “Ten Rules to Organize the Business for 21st Century Management” to guide business organization for competitive 21^st century business management.

The ten rules of 21^st century business management are:

1. Organize and manage the business
2. Generate revenues from a chain of known value and quality
3. Organize and manage capital for high utilization and return
4. Keep accurate financial and non-financial records on the full business cycle in operations and development
5. Operate to optimize operations, result value-added, and the profit result
6. Plan and govern the transition from today’s value to approved strategic value
7. Manage all capital investments to gain a planned return through results
8. Manage human personnel, capability, and knowledge capital to increase human worth
9. Collaborate to maximize shared value and minimize shared costs
10. Employ 21^st century business management conventions and standards

The ten rules are described in the linked article and under the forum “Ten Rules for Business Management”. [more...]

20^th century enterprise management has no consistent conventions, definitions, and standards

20^th century enterprise management, used by all enterprises today, lays a wide variety of organization and management structures over the business, and, therefore, cannot manage the business. A different set of conventions, definitions, and standards is used for each of the structures laid over the business. The many 20^th century enterprise management books contain different conventions, definitions, and standards. The many different business processes, information systems, IT architectures, costing and accounting, performance reporting, and administration structures each have their own set. The enterprise employs a wide variety of conventions, definitions, and standards to manage the enterprise, rather than one limited and consistent set to manage the business.

20^th century management does not support common solutions, collaboration, or measurement across enterprises

The lack of consistent conventions, definitions, and standards prevents business collaboration and integration, common solutions that any enterprise can use, business measurement for comparison across enterprises, common learning that can be applied to any business, educated and trained personnel that can fit into any business, and other long-unfulfilled business needs.

Rule No 10: Employ 21^st century business management conventions and standards

Rule No. 10 of 21^st century business management eliminates the problems of conflicting and confusing business conventions, definitions, and standards by providing one set related to directly organizing and managing the actual business. Terminology that is not related to the actual business and conventions and standards established to maintain structures laid over the business are not continued.

21^st century business management provides one set of consistent conventions, definitions, and standards for the actual business

21^st century business management is documented in the knowledge and procedures provided by Result-performance Management (R-pM). [more...].