The financial crisis is caused by business performance problems

Business performance used by financial institutions, corporations, and other enterprises today is a problem. Business performance is defined to include both the performance of the business in the utilization of capital and the output results produced by the business. Capital utilized in performance and results produced are mixed together in business processes, performance management, key performance indicators (KPI), and other business performance structures laid over the business. Business performance improvement stresses performance, performance quality, and the flow of performance without managing improvement to business results produced by the performance or the investment in capital solutions utilized by the business to manage investment returns and capital worth (also called asset value).

Business performance management prevents actual business management

Structures laid over the business hide actual business capital solutions, actual business performance, and actual business results produced. The business changes with each change to a result produced or new investments in capital solutions utilized. Business change cannot be managed and conflicts with overlaid structures causing unsolvable 20^th century management and performance problems.

R-pM converts performance management to Result-performance Management

Result-performance Management (R-pM) organizes the actual business through organized and managed capital solutions utilized in performance to produce specific results in a business structure. The one integrated business structure is used to manage the business for each part of the enterprise. The organized businesses within a larger enterprise add up the enterprise business structure. R-pM manages each business in the enterprise and the complete enterprise business to eliminate performance problems through 21^st century management. [more...]

Governments responses to economic crisis do not solve the problem

After every economic, financial, or corporate governance crisis, governments promise action to prevent problems from happening again. The actions invariably impose more regulations on enterprises, which increase management costs and complexity, and do not address or solve the actual problems. This weekend the Chief Executives of the top 20 developed and developing countries met to discuss the economic recession. They discussed actions to revamp international financial regulatory institutions, improve financial institution regulation, and to stimulate world economies. These actions do not address the fundamental problem or prevent recurrence of the same problems in the future.

There is only one problem to solve, the failure to manage the business

The fundamental problem underlying every economic, financial, and corporate governance crisis is the failure to understand and manage the business on the part of managers, accountants and auditors, and government regulators. The problems are inherent in 20^th century management structures laid over financial institutions, corporations, and other businesses that prevent actual business management.

There is only one solution, manage the actual business with R-pM

The solution to the problem is available today with Result-performance Management (R-pM) to assist businesses, professional bodies, educational institutions, business service and solution providers, and governments to institute and support proper business management. R-pM replaces 20^th century management structures laid over the business, with one business structure for 21^st Century Management. R-pM captures actual business data, not captured today, and provides the architecture to manage industries, such as the financial industry, markets, and economies as summaries of the businesses involved.

A government “Business Management Program” will prevent future problems and provide significant economic benefits

Any government response to the financial crisis or to provide economic stimulus should include a Business Management Program to solve the underlying problem. A group of governments or a forward-looking government must take the lead to institute a “Business Management Program” as discussed. Once one government establishes its country as the leader and begins the program, other countries will be forced to follow. But, the lead country will always have the advantages developed by the leader. [more...]

Unsolvable problems have persisted throughout 20^th century management leading to the current crisis and recession

Throughout the 20^th century, we have had continual problems with re-organizations, business complexity, intangible assets, alignment, change management, unknown costs and value, unknown capital worth and returns, ill-informed corporate governance, and so on. These unsolvable problems are the underlying cause of the financial crisis and recession. Thousands of new methods have been contrived and books have been written to solve 20^th century problems once and for all. So, why do we still have the problems?

The top ten problems of 20^th century management arise from failure to organize and manage the business

We have only one fundamental problem in 20^th century management. The business has never been organized and managed. We organize people into an organization structure that is laid over the business. We then lay more management structures for strategy and planning, accounts, business processes, performance management, administration, etc over the business. The 20^th century change management approach is to improve the overlaid structures or to lay more structures over the business. The government response to business, financial, and economic problems is to impose more regulations and reporting on the business. No one addresses the well-known 20^th century management problems.

The unsolvable problems must be eliminated by organizing the business with R-pM for 21^st Century Management

The only solution is to eliminate unsolvable 20^th century management problems by organizing the actual business as one business structure through Result-performance Management (R-pM) for 21^st Century Management. R-pM organizes, plans, directs, controls, reports, and governs the business through the current business structure and result goals by time period leading to the approved strategic business structure. The business structure provides the architecture for organizing all businesses in an industry and all businesses in an area or sector of the economy; so the government can manage businesses in an industry, such as the financial industry, and businesses in an economy. [more...]