Archive for the 'Strategy Development' topic

20^th century management used today lays various plans over the business

20^th century management cannot plan the business directly because the business is not organized. The enterprise is planned through various structures laid over the business. These overlaid planning structures include:

• Strategic plans using such structures as maps and corporate plans
• Financial plan and budget structures
• Information technology plans and enterprise architectures
• Capital development plans and investment analysis structures
• Operational plan structures

Each of these planning structures uses its own set of entities to describe the enterprise, uses different information systems, and requires its own support staff. Each plan must be maintained and updated with actual progress against the planned entities, and reported. The plans plan the enterprise in various ways depending on the particular structures implemented. It is difficult to understand and manage the actual business from these plans.

None of the overlaid plans plan the actual business

Since the business is not organized, the business cannot be planned. The results produced by the business cannot be planned as an interrelated set. Some results may be planned in isolation as separate entities such as product sold and revenue received. The plans are usually created from estimates rather than a period by period build up from the existing business. [more...].

20^th century management plans the future enterprise and does not plan the business

20^th century management used today develops strategies and plans using maps, corporate plans, budgets, etc that are laid over the business. Corporate plans plan the corporation and are unable plan the strategic value to be created by the business and the capital development needed to create strategic value. The business is not planned and strategies and plans become invalid as the business changes. New plans try to bring the enterprise plans in closer alignment with the current and future business.

The business is “the utilization of capital of worth in performance to incur costs to produce value in results”

Result-performance Management (R-pM) is based on the definition of the enterprise business as “the utilization of capital of worth in performance to incur costs to produce value in results”. This definition includes the current business that must be conducted every day to utilize capital the enterprise invests in to produce results needed for business success. The definition also includes the future business that must be the objective or the business strategy to produce strategic results utilizing capital that must be available when needed?

The management strategy plans the business at the strategic horizon

The strategic business is “the utilization of capital of worth in performance to incur costs to produce value in results at the strategic horizon”. The strategic business is described as management strategy capital. The business strategy, strategic business structure, and business plans to execute the strategy are management strategy solutions.< [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...].

20^th century management problems are caused by structures laid over the enterprise business

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

The fatal error of 20^th century management is laying a rigid and arbitrary enterprise organization structure over on 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, 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, and prevent direct business data capture and management.

20^th century management improvements can never solve unsolvable problems

We continue to teach 20^th century 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 can never solve the top ten problems of 20^th century management. [more...].

What is management capital? Management capital is not the capability of our managers. That is part of our human capital. Management capital is the capital provided by management so that the enterprise can develop and execute a successful strategy.

You hear of management strategies, management tactics, and management intelligence; but do think of it as management capital? You likely do not, because 20^th century management does not organize and manage management capital as the capital that is utilized to plan, and direct the enterprise business. 20^th century management has functions like corporate planning, internal audit, public relations, legal, marketing, etc. that may administer some management capital, but few, if any, really manage management capital. Many enterprises have problems due to inadequate management capital.

Logically all capital must be defined as performance solutions to be deployed and utilized to produce a specific result. [more...]

Corporate Directors have a responsibility for best business management

Corporate Directors and other business governors need to ensure that a viable business strategy is in place to create planned future value, that capital investments provide itemized returns by creating strategic value, that the business is managed to create strategic value, that accurate financial and non-financial records are kept on the business, and that progress in executing the approved business strategy is maintained.

20^th century management prevents corporations and their directors from doing any of this. The actual business is not organized or managed, so most business data is not captured. Strategies are contrived overlays on the business, not actual business strategies. Corporate investments are based on guesses and estimates, not actual business measures. A contrived chart of accounts keeps partial financial records and does not record the actual business. Management information solutions provide enormous quantities of information on contrived structures laid over the business, but only incidental information to manage the actual business.

Result-performance Management (R-pM) organizes the business for 21^st Century Management to provide good corporate governance, as explained in the earlier post “Corporate Governance is a Small Part of the Big Corporate Management Problem”.

R-pM provides transparent business organization and management

As a Director, you approve the business and financial results in the economic outputs to be produced by the business. You approve capital investments and financial expenditures needed to provide the capital to produce results. [more...].

Corporate Planning Managers are important capital managers

Are you a Corporate Planning manager, responsible for strategic planning, alignment of corporate and lower-level plans, and reporting against the plan. Corporate planning is defined and organized differently from enterprise to enterprise. You likely provide top management support such as planning research, intelligence analysis, option analysis, and other functions. How do you approach your work? As a routine function? As a responsibility for corporate or enterprise strategy development, and to ensure that corporate strategy is coordinated and executed properly?

If your answer is closer to the latter, you will clearly benefit from R-pM.

20^th century management does not provide a framework for Corporate Planning

20^th century management manages the enterprise by laying organization and management structures over the business. One of the structures laid over the business is the corporate plan. 20^th century management does not provide a framework or a capability to plan the actual corporate business. [more...].

In an article on 1 March 2006, we discussed “Evaluating strategies that create future value“, to investigate what value is being created. Value tended to appear at the end of the strategy, and not defined in detail from the start and added to throughout the execution of the strategy.

Value is not just a contrived or calculated number. Value must be planned and managed day by day by organizing the business and managing results. Strategic value is not an estimate or hype. Strategic value is planned by improving current results and developing future results. This is explained in the R-pM community download “Organize your Business with R-pM“.

Many corporations have a mission to create strategic value or customer value

It is difficult to develop a strategy that creates future value, if the enterprise cannot manage the value that it has on hand today. Where is the value in your enterprise today? [more...]

The 20th century Corporation is not organized to manage investments

You likely invest in corporations. As an investor, you try to identify precisely how you are to gain a return on your investment and have some idea of what that return should be. Do you realize that the corporations that you invest in have no way to do the same when they use the money you have invested?

Corporations are not organized to manage investments, so corporations do not have a fundamentally strong means to plan and manage the return on their investments, from initiation through to measuring the return. So corporations rarely really invest, they either spend or speculate. This problem is discussed in the article “Investing in corporations that cannot manage investments”.

Result-performance Management (R-pM) organizes the Corporation to manage investments

The answer is Result-performance Management (R-pM) to organize performance solutions to manage the cost and effectiveness of change and organize results to manage the value and quality of change. To learn more about R-pM visit result-performance-management.com and download the R-pM community report “Beneficial Result-performance Development” to learn how to manage development investments.

21^st Century Management eliminates 20^th century problems

Result-performance Management (R-pM) eliminates investment management problems and other costly 20^th century problems. Slash overheads and 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. The R-pM Toolkit is offered at a nominal price to encourage wide use of R-pM. Get your R-pM Toolkit, and future updates, at result-performance-management.com. .

Value management, value chains, value propositions, and strategic value creation are not produced from managed value

Value is an impressive word. People talk about value creation, value propositions, customer value, value chains, enterprise value, shareholder value, value management, etc. It sounds like they know more than the rest of us. But, what is the value of all this value?

Value has many definitions for many contrived methods purporting to manage value. Why don’t we just have one method with one definition of value, as specific management metric, so that we can understand and manage value across all of our enterprises? This problem is discussed in the article “Business value - what is the value of all this value?”.

Result-performance Management (R-pM) manages value as a management metric

The answer to real value is Result-performance Management (R-pM) to organize and manage enterprise results that contain value. To learn more about R-pM visit [more...]>