Archive for the 'How to Implement Change' topic

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...]>

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...]

The enterprise today has many unsolvable management problems

Today’s 20^th century enterprises have always had management problems, because they never managed the business “the activity of providing goods and services”. Instead, they laid organization, system, accounting, reporting, and other structures over the business. The business changes, while the overlaid structures remain rigid, creating problems with interfacing, communications, and generally managing the enterprise. The organization structure created silos, which interrupted the flow of goods and services across the enterprise. The solution to the problem was to re-engineer business processes to facilitate the flow of goods and services across the organization units involved.

Business process re-engineering solved some problems, but created others

Business Process Re-engineering (BPR) put in business processes leading to one output at the end of the process. BPR generally sped up the production of the final output, but introduced another set of problems. Results, capital utilized, and performance are not defined and are mixed together within the process. Quality management focused on performance quality. The process crosses organization units, which are expected to manage performance and performance quality to produce a final output result to go to the customer. [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 capital 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 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 capital solutions utilized and the results produced by business performance 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 capital 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 enterprise management does not organize or manage results or capital as sets

20^th century management used today does not manage the enterprise business, defined as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. [more...].

We have been indoctrinated to accept contrived 20^th century enterprise management as the way that things are done

All existing business methods, all business school teachings, all new business and management solutions, and all management books produced today propagate contrived 20^th century enterprise management, which manages the enterprise by laying organization, account, process, activity, and other management structures over the business. Here at the Business Change Forum we have hundreds of articles that explain the fatal flaws and fundamental unsolvable problems with obsolete and outdated 20^th century enterprise management. We explain the alternative for natural 21^st century business management to manage the business directly as one business structure.

Even with all their flaws, 20^th century business organization and management structures are generally-accepted. People do not want to think and analyze to solve problems; they want a ready-made proscribed solution based on familiar methods. But since 20^th century management is a very costly and flawed way to manage, all we do is propagate bad management, high costs, and unsolvable problems.

Problems are unsolvable, when our mind is closed to solutions

The biggest obstacle to solving business management problems is not finding the solution, but opening our minds so that we can see the solution. Even if the solution is right in front of us and should be obvious, we are blinded by a mind that is closed to the solution. Many experts and analysts are looking for a solution to prevent future economic crisis. The obvious solution, manage the business, cannot be seen. [more...].

20^th century management consulting propagates the problems that caused the economic crisis

Many capital development, business change, and management improvement programs involve management consultants. 20^th century management consulting services normally add to or change organization, account, or management structures laid over the business. Each consulting firm has their own approaches and methodologies that are not familiar to the enterprise client. Services tend to be led by the consultant, with limited client participation, and the client must await a deliverable. Misunderstandings often arise over the scope of the project and the responsibilities of the consultant and the enterprise. 20^th century management consulting does not enable clients to manage their actual business and propagates the problems that cause the current economic crisis.

21^st Century Business Management Consultants help enterprises prevent problems that cause economic crisis

21^st Century Business Management Consulting is based on helping enterprise clients organize and manage their business in “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. The current economic crisis is caused by one fundamental problem; the failure of financial institutions, corporations, and other enterprises to manage the business. 21^st Century Business Management Consulting is required to help client enterprises to organize and manage the business, and then to optimize the worth of solutions developed, the cost and effectiveness of solutions utilized in performance, the value and quality of results produced by the business, and the return on all capital solution investments.

21^st Century Business Management Consultants have a model to work in partnership with the enterprise

21^st Century Business Management Consultants work in partnership with enterprise clients in enterprise-led result-performance development projects to provide the needed capabilities and resources the enterprise lacks.  The enterprise and consultant define the development and improvements that provide planned and measured benefits to the enterprise, through a 21^st century business management consulting model that:

• Is based on organizing and managing the actual enterprise business
• Provides services to help the enterprise organize, manage, improve and develop the actual business for measured value-added benefit
• Provides a method for enterprise clients to lead and participate properly in business management improvement
• Provides a clear framework to understand scope and means of participation for both parties
• Provides the organization and approach that eliminates the fundamental problems in 20^th century business change and management consulting methods
• Provides methods and tools that both the enterprise and consultant understand and use
• Provides a means to plan and measure the value the consultant provides and the value-added success the enterprise achieves.
  

These standards cannot be met with 20^th century management structures and consulting approaches, since the structures hide the business, and there is no framework to scope change and measure the value produced from the specific scope of change.

Business management consulting organizes the actual business for 21^st Century Management

21^st Century Management Consulting is based on organizing and managing the actual enterprise business as one integrated and transparent business structure. [more...].

Many of us have participated in business change projects. Likely, we share many experiences with the difficulties in gaining successful business change. We have read about many cases of problems and disasters.

Something must be wrong. Why after all this experience and the many stories of unsuccessful business change, do we continue to have problems? Have management consultants with their business change and system implementation methodologies provided the answer? Are the conventional methods we use adequate for business change management?

The real problems are fundamental in the way we organize the business. Conventional methods introduce unsolvable problems, so that no business change method or consultant methodology can work properly.

“Business change” is not change to the business, but change to structures laid over the business

The problems start with the fatal error of 20^th century management; the organization structure. [more...]

All the economic crisis problems revealed are symptoms, and the remedies proposed address symptoms

Many experts are discussing and writing about the problems causing the financial and economic crisis and recession. They discuss problems in managing “asset value”, in managing complex financial securities, in preventing large sudden financial losses, in confusing interrelationships between institutions, in understanding the real financial situation or credit worthiness of a bank or other enterprise, in the need for some sort of regulation, and on and on. None of the problems discussed are the real problem. They are symptoms of one real problem. Remedies discussed are not directed at solving any real problem. Remedies address the symptoms to prevent failures and to keep the business and financial system functioning, in spite of the fundamental unsolved problem.

The symptoms are complex and confusing and do not indicate any solution

The symptoms of the problem are difficult to understand. Since they are symptoms, it is difficult to find real solutions. Symptoms cannot be solved; symptoms can only be alleviated. Money spent to bail-out companies, to provide capital or loans for continued operations, or to provide insurance or guarantees only enable continuance of unsolved problems. [more...].

Governments are looking for a unifying architecture for best business management and market, financial, and economic management

Governments will be meeting to construct an international response to the financial crisis. They will discuss new best business management practices to solve problems that caused the crisis, and new architectures for the financial system and economic management to prevent future crises. Again, as always in the past, they likely will fail to comprehend and address the unsolvable 20^th century management problems that cause the crisis and will add new practices and architectures on top of existing dead-end 20^th century management structures, and claim to have solved the problem. In order to make real progress, those involved must set current structures aside and take a completely new look at what comprises a business and how businesses relate to industries, markets, financial systems, and economies.

R-pM is the only solution available to eliminate unsolvable problems that caused the crisis

Result-performance Management (R-pM) organizes the actual business as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. 20^th century management structures are replaced by one business structure to eliminate unsolvable problems in unknown capital solution investments in the business, unknown economic output results produced in chains across the business, unknown value of results from the business, unknown costs to produce results, unknown value-added to manage value and quality, unknown returns on capital investments from the added value to results, unknown capital worth in future output and disposal result value-added, and on and on. R-pM captures actual business data to manage all corporations, financial institutions, and other enterprises properly and report on the actual business to regulators.

R-pM is the only unifying architecture to integrate businesses, markets, industries, and financial and economic management to prevent future crises

R-pM builds up from the business structure to provide actual business architectures by industry or economic area or sector to consolidate actual business data. Data can be consolidated by market for business input and output results and capital solution utilization. Industries, such as the financial industry, can be managed for the value and quality of results and the utilization of financial and other capital solutions. [more...].

The Business Management Program is explained in a free download for R-pM Community Members

The Business Change Forum and 21^st Century Management Magazine at R-pM.net have run articles the past month on the financial crisis and the only real long-term solution to manage the actual enterprise businesses. The articles point out a comprehensive long-term solution in a Business Management Program that a government can undertake to restore confidence in business, financial, and economic management and prevent recurrence of past problems. The Program is outlined in a free 36-page download “A Business Management Program to Answer the Financial Crisis”, which is available to R-pM Community Members at Result-performance-Management.com.

A Business Management Program benefits all participants

R-pM is a breakthrough to new competitive advantages. R-pM is implemented best as part of a coordinated Business Management Program to assist enterprises within a nation or region to organize and manage their businesses. The Business Management Program also promotes support from local management consultants, business service providers, professional associations, software and solution providers, accounting and audit firms, education institutions, and government business promotion and regulatory bodies. The Business Management Program instills confidence that beneficial longer-term measures will solve problems and prevent repeats. All participants gain in improved business management and new competitive advantages of R-pM and 21^st Century Management.

R-pM opens new opportunities for professional services and business software and solutions

R-pM implementation to date is piecemeal in certain forward-looking enterprises in various countries. The financial crisis has created a surge of interest in R-pM from enterprises, consultants, and solution providers. [more...].