The economic crisis and growing recession is caused by one problem: the failure to manage the business

20^th century management of all enterprises today lays organization and management structures over the business to manage the enterprise, rather than managing the business. This causes the fundamental problem in all enterprise management that has caused all previous crises and is the underlying cause of the current financial and economic crisis. The problem is the failure to manage the business.

The symptoms of current problems are numerous and complex. But, the problem is basic and simple. Today, all governments, enterprises, and experts are trying to understand the symptoms and to alleviate the symptoms. No one is trying to get beneath the layers of symptoms to solve the basic problem. The only real solution is to organize and manage the business to eliminate overlaid structures, capture actual business data, and produce one accurate set of transparent information needed to account for and manage the business.

20^th century management used today does not provide the information needed for business, financial, and economic management

20^th century management does not manage important result metrics like result value, result volume, result quality, result value-added, and result risk; important performance indicators like performance costs, capital utilization, performance effectiveness, and performance uncertainty; or important capital measures like investment costs, capacity, qualifications, reliability, investment return, and solution worth.

Financial institution and corporate problems invariably point to the lack of information on return on capital investments, planned and current capital solution worth, capital amortization in performance costs as solution worth declines, new product result value, planned future value-added from product results, and other information needs that are blocked by 20^th century management used by all enterprises today.

The only solution is to learn, organize, and manage the business for breakthrough advantage

To solve today's problems and prevent future losses, each enterprise must take advantage of advanced information technology (IT) to learn, organize, and manage actual business. 20^th century management used today evolved before IT and is a time bomb for all enterprises in the world. All enterprises either will experience continued losses due to the problems of 20^th century management or will lose out to competitors who are now organizing their business for 21^st Century Management.

The current and strategic business structures are managed for complete, consistent, and accurate 21^st Century Management information. The business provides a consistent and standardized architecture to summarize managed businesses into manageable corporations, industries, and economies for global financial, economic, and business management and future stability. [more...]

Many managers are interested in business management, but are concerned about the authenticity

Now with the economic crisis, 21^st century business management is gaining more recognition as the only solution to eliminate the 20^th century management problems that enabled the crisis. But, people ask how business management originated. Some people are concerned about the authenticity and viability of business management.

20^th century management problems were encountered and the need for business management was conceived piece by piece in work as a management consultant for over 30 years. I specialized in business organization, management improvement, and information system development projects with such firms as Booz Allen and Hamilton, Multinational Management, Price Waterhouse, A.T. Kearney, and Arthur D. Little.

Business management was originally developed as aids to capital solution development and management improvement projects

Business management concepts first evolved as an aid to business and information systems design and later to manage business change projects, both the project and the changes to the business as the results of the project. It became clear that the only solution to business organization and management problems was to organize and manage the business. Contrived organization and management structures laid over the business had to be eliminated.

Formal development of business management began in 2002

After retiring from active consulting, work began in 2002, to develop and document business management knowledge as Result-performance Management (R-pM) to provide the one structure to organize and manage the business. The Business Management Toolkit is now available, and continues to be developed as business management evolves. Business management is now launched for use by forward-looking enterprises that want to learn their actual business, and then organize and manage the business for breakthrough cost reductions and competitive advantages. Business management is available for use by governments as the basis for a Business Management Program, to solve the problems that caused the economic crisis and build a new architecture for corporate, industry, and economic management. [more...]

Performance management today mixes capital utilized, performance, and results accomplished together

Performance management is a popular form of 20^th century enterprise management. But performance management mixes the capital utilized, the performance in the utilization of capital, and the results produced together. This prevents real business management to manage the utilization of specific measured capital solutions, in measured specific actions of performance, to produce specific measured results. Performance indicators do not distinguish capital solutions, solution performance, and results produced.

R-pM separates capital solutions, performance, and results to manage the business

The business is defined as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. In order to manage the business, capital solutions, solution performance, and results produced must be managed as separate components of the business. Capital solutions are qualified to produce specific results before being acquired and implemented. Capital solutions are planned with the potential to produce results and measured through capital measures. Performance is the utilization of a specific solution to produce a result. Performance is planned through a level of expectation and measured through performance indicators. Results are planned to produce a volume or count of results of value through result goals and measured through result metrics. This enables all components of the business to be measured and managed as separate entities in business performance in order to manage the actual business. [more...]

Corporations today are not able to manage the business causing the economic crisis

All business managers are familiar with such 20^th century management problems as unknown costs, unknown value and quality chains, unknown investment amounts and return in specific capital items, unknown capital worth (asset value), intangible assets, inaccurate and missing management information, and on an on. These unsolvable problems are symptoms of the one corporate management problem that caused the economic crisis; the failure to manage the corporate business. Corporations today do not have the management information or tools to solve the problems and prevent future problems. The various corporate businesses cannot be consolidated into one corporation business.

Government responses to the economic crisis do not address the one fundamental problem

Governments and "experts" propose solutions to the economic crisis that are the usual economic recovery, corporate rescue, and added regulation. No one is trying to identify and solve the fundamental problem in order to prevent recurrence. Measures proposed encourage corporations to proceed as usual, and not take the needed steps to manage the corporate businesses to gain significant competitive advantage and to prevent the problems that will lead to future economic crisis.

R-pM is the only solution for effective corporate business management

Result-performance Management (R-pM) is the only method available to consolidate and manage the corporation business. R-pM organizes and manages each part of the corporation as a business. Businesses at a lower-level add into the businesses at a higher-level until the corporation is managed as one business with one complete, accurate, and transparent business structure. All 20^th century management structures laid over corporate businesses at all levels and the related unsolvable problems are left behind. [more...]

Capital investments today are not managed as specific solutions to produce business results

20^th century management employed by all enterprises today does not identify specific capital solutions as an entity to be defined, measured, or managed. Some obvious capital assets like employees, fixed assets, and money are identified and managed as separate assets. Many high worth assets are never defined or are labeled as "intangible assets". The full amount invested in capital solutions, the decline in solution worth producing performance costs to amortize the investment, the return on investment in the solution, and the current capital worth or "asset value" of the solutions are unknown. Unknown and unmanaged capital is a major contributor to financial losses that led to the current economic recession.

Result-performance Management manages all capital investments in the business

Result-performance Management (R-pM) identifies all capital investments as specific solutions intended to produce specific results. The full scope of solutions needed to produce a result are defined, with the qualifications needed for each solution. The expected result value increase with the investment is planned and must exceed the development and implementation costs to justify the investment. Result value is attributed to solutions utilized by the contribution of the solutions to producing a good result. The attributed result value for each solution over its expected life and disposal is the planned solution worth that must cover the solution investment.

Capital solution performance to produce results and result value-added is measured and managed

Each capital solution is implemented to produce one or more results in performance. The solution worth declines as the solution deteriorates or becomes outdated. The decline generates performance costs that are spread across the results that utilize the solution. Utilization of the solution also creates result value that leads to customer revenues. The portion attributed to the solution covers the solution costs and provides the gain or loss for the return on investment in the solution. The expected future attributed result-value to cover the costs and gain in the solution over the remaining life, plus solution sale or disposal result value is the current solution worth, which must exceed the unamortized investment balance. These capital measures largely are unknown today, but are important for the proper management of the business and prevention of financial, capital, and economic problems. [more...]

The experts show their ignorance of real problems and solutions to the economic crisis

The World Economic Forum just concluded in Davos, Switzerland. The many speeches, interviews, and panel discussions did not show anyone who knew the real problems in financial institution, corporate, financial, and economic management that caused the current economic recession. There were discussions of the obvious symptoms in the poorly-defined and managed financial products, the credit freeze, greed, ineffective management structures and systems, ineffective regulation, ill-informed management, lack of transparency, lack of leadership and coordinated government responses, etc. Many pointed out the need for new management structures, new multilateral regulation and management mechanisms, and improved governance. But there was no awareness of the fundamental problem and the real solution needed.

All the symptoms discussed at the World Economic Forum arise from one problem; the failure to manage the business

Every symptom, root cause, and problem are really outgrowths of one problem: the failure of financial institutions, corporations, and governments to manage the business. The problem is built into the existing 20^th century management structures used to manage enterprises today that prevent actual business management. The new structure or system needed is simple business management. The business must be organized, planned, directed, accounted for and controlled, reported, and governed. The actual business is transparent, and when reported management and the board have the information to prevent problems, carry out their responsibilities, and exercise good governance.

21^st century business management is the answer to prevent future economic crisis

The only way to manage the real business is provided in Result-performance Management (R-pM) knowledge, as explained in many articles in 21^st Century Management Magazine. 21^st century business management replaces 20^th century enterprise management structures laid over the business with one business structure to manage business results, business performance, and the capital utilized as solutions by the business. The current business structure and progress is managed by time period against result goals and performance expectations to the strategic business. Business management eliminates all the unsolvable problems of 20^th century enterprise management that were discussed at the World Economic Forum. Business management provides a new structure for corporation, industry, market, finance, and economic management based on managed businesses. [more...]