Archive for the 'How to Implement Change' topic

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...].

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. .

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 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...]

Many capital development, business change, and management improvement projects involve management consultants. Each management consulting firm has their own approaches and methodologies that are not familiar to the enterprise client. 20^th century management consulting services tend to be led by the consultant, with limited client participation, and the client enterprise must await a deliverable. Misunderstandings often arise over the scope of the project and the responsibilities of the consultant and the enterprise.

Clients and management consultants need a framework to work together in partnership

An article on 24 May 2006, How Management Consultants and their clients can work in partnership, discussed the need for a framework for the consultant and the enterprise to work together. The article said that the enterprise and consultant need a way to define the development and improvements that will provide clear and measurable benefits to the enterprise, through a 21^st Century 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 clients to lead and participate properly in business 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 client and consultant understand and use
• Provides a means to plan and measure the value the consultant provides and the value-added success the client achieves.
  

We cannot meet these needs with 20^th century structures and management consulting approaches, since the structures hide the business, and we have no framework to scope change and measure the value produced from the specific scope of change.

Result-performance Management (R-pM) organizes the actual business for 21^st Century Management

The answer is provided by Result-performance Management (R-pM), to organize and manage the actual enterprise business for new 21^st century business management and management consulting. All business organization and management projects are based on organizing and managing the actual business as one integrated and transparent business structure. The objective of every enterprise development project is planned and measured result value added.< [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...].

We have been indoctrinated to accept artificial 20^th century 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 artificial 20^th century management. 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 management. We explain the use of Result-performance Management (R-pM) for natural 21^st Century management.

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 and unsolvable problems.

Unsolvable 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. The biggest arguments against an innovative new solution are that things are not done that way, it is not what others do, and it requires change. If it was what is always done, what others do, or required no change, it could not be a new solution.< [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...].

R-pM Community members and R-pM Toolkit users ask questions about identifying and defining business results, such as new product or service developed, products produced, product or service sold, services delivered, capital supported, capital developed, projects completed, etc. Specific questions are answered by email, but we summarize common questions in the series of articles on How to Use R-pM.

Defining business results is new, since results produced by the business have never been identified and managed as a set. First, it is important to designate a capable business analyst to lead business organization capital, so that expertise is developed, and a specialist can guide others. Also, use The R-pM Toolkit, which has layouts, guidelines, and the answers to most questions.

Some businesses simply ask managers to define results they produce. This can provide a first cut, but managers need explanations and guidance. Result teams for the whole business or parts of the business should analyze, brainstorm, and define the results to be produced by the future business, to be explained to and reviewed with management.

Identifying and defining results is difficult at first, but gets easier as understanding and experience is gained. Eventually it becomes the business routine. [more...]

R-pM community users ask questions about identifying enterprise capital, particularly for intangible assets, and defining specific performance solutions. Each question is answered by email, but we summarize common questions in the series of articles on How to Use R-pM.

Defining performance solutions is new, since performance solutions utilized by the business have never been identified and managed as a set. First, it is important to designate a capable business analyst to lead business organization capital, so that expertise is developed, and a specialist can guide others. Designate someone familiar with each capital category to take the lead with business capital, human capital, facility capital, and management capital. Also, use the R-pM Toolkit, which has layouts, guidelines, and the answers to most questions.

Some businesses simply ask managers to define results they produce and solutions they utilize. This can provide a first cut, but managers need explanations and guidance. Performance solution teams for the whole business or each capital category should analyze, brainstorm, and define the performance solutions to be utilized by the future business, to be explained to and reviewed with management.

Performance solutions definition gets easier as experience is gained. [more...]