20th century management has no structure for performance alignment. This produces many well-known alignment problems. We try to align utilization of capital in performance with utilization of capital in performance. We need to align our performance against something.
20th century management has no frame of reference to align utilization of capital in performance
We keep reading books and seeing methods that offer contrived solutions to specific alignment problems. Even with all the contrived alignment methods, we continue to have problems aligning and relating strategy and plans with operations, enterprise application architecture and information systems with business processes, the organization with business operations, customer needs with product and service development, outsourced services with internal operations, human resources with business needs, tangible assets with intangible assets, management policies and decisions with business change, information reported with the actual business, and other performance with performance.
We do not organize the business; we try to align performance with performance
20th century management methods try to align performance with performance. This is futile! In order to align performance with performance, we first must break down performance into the different entities included in the definition of performance. Performance is generally defined to include not only the actions executed in the utilization of capital but also the results accomplished. In effect, 20th century management defines capital solutions, performance in the utilization of capital solutions, and output results produced as performance.
R-pM sub-defines performance to organize the business and align capital utilized with results produced
We must separate performance into the three components to organize the business, “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. Result-performance Management (R-pM) organizes the actual business in a business structure with results to be produced by the business in columns across the top, capital invested in the business as solutions down the rows, and business performance in each cell where a capital solution is deployed to be utilized to produce a result. R-pM organizes the business to align capital solutions utilized in performance with the results produced. Capital solutions utilized are aligned to produce the same result. This report explains the alignment problem and the R-pM solution.
We need something fixed in place to align capital solutions utilized in performance against
We said that we need something fixed in place to align our organization, strategy, business, information systems, customer relationship methods, outsourced services, tangible and intangible assets, human capital, and internal operating methods against. Once all of these things are aligned against something fixed in place then they are aligned with each other. Every enterprise has what is needed for alignment, but it has never been defined or managed.
All of the entities we want to align are part of enterprise performance, whether performed in-house or outsourced. But, we face a serious problem in our definition of performance, where we label not only the utilization of capital, but also the output results produced, as performance. The results we need in order to align solutions utilized in performance are still confused as performance and are not defined as a set.
We need to separate results from performance in order to have a frame of reference
Performance in the utilization of capital has one common denominator with other performance in the utilization of capital, the result produced by the performance. We can only align performance against the output results produced. Then the capital solutions utilized in performances to produce the same result are aligned with each other. Therefore, the only way to solve the alignment problem is to define the specific results that must be produced by performance across the business and structuring results to have a frame of reference fixed in place for alignment. We must define the output results of a value in customer willingness to pay for results and result chains that must be produced across the business to generate external customer value and produce business success. We must organize results as a set with common attributes like customer, value, total cost, value-added, risk, volume, quality, relationships, and other descriptors.
We must also define the specific performance to be aligned
However, there is still one more problem. What is the performance we are going to align? How can we align the organization, strategy, etc., when we have never defined our organization, strategy, etc, as something tangible and manageable with a specific identifier? We are trying to align amorphous and poorly-defined capital utilized in performance with other amorphous and poorly-defined capital utilized in performance. To do this, we try to contrive a method to define and align the capital utilized in performance for each situation. This allows us to work around the problem, but does not solve the problem.
Performance must be defined as utilization of specific capital solutions to produce specific results
What are the commonalities of all this performance we are trying to align? Well, no matter what they are called, they are all capital that we utilize as solutions in performance to produce value in results. Our organization, business processes, information system processes, customer relationship methods, outsourced services, tangible assets, intangible assets, and internal operating methods are all capital solutions that we utilize to produce results. In order to align capital utilized in performance with results we must isolate and precisely define each element of capital we want to align. All tangible and intangible capital must be precisely defined as specific solutions in order to be utilized in performance to produce specific results. We must organize capital solutions as a set with common attributes in category, class, development cost, performance cost, worth, effectiveness, uncertainty, support responsibility, and other descriptors.
Alignment problems can never be eliminated until we organize, and manage results, capital solutions, and performance
The unsolvable alignment problem can never be eliminated until we define performance properly to separate capital solutions utilized, performance in the utilization of capital, and output results produced. We must then define the specific results that must be produced across the business and along result chains to produce final results of value that go to the customer. Results must be defined to meet customer needs. We must also define capital as specific solutions of developed or improved worth that can be utilized in performance to produce a specific result. Capital solutions must be defined and developed to provide cost-effective solutions to produce value-quality results. We can then organize the business by deploying specific solutions to be utilized in performance to incur costs to create value in specific results. All solutions are aligned in performance, integrated as needed and utilized to incur a total costs to produce a volume of results of value, and to deduct total costs from result value to know result value-added created.
Eliminate the unsolvable alignment problem with Result-performance Management (R-pM)
The answer is Result-performance Management (R-pM), to organize the business for 21st Century Management. R-pM eliminates the unsolvable alignment problem by defining all of our capital as specific capital solutions, and aligning each solution for utilization in performance with the results the solution produces. This is the business structure, which organizes the business in a matrix, like a spreadsheet, with results in the columns across the top and the solutions utilized in the rows down the side. Solutions are deployed to be utilized in performance to produce specific results in the cells. The solutions that are deployed to the same column to produce the same output result are aligned. Result managers are responsible for effective utilization of solutions to produce results. Each solution has a performance manager responsible for providing an effective solution.
R-pM aligns results and capital utilized in performance simply by organizing the business in the business organization solution. The business organization solution is maintained as business capital to ensure that all in-house and outsourced solutions are aligned to produce specific results. Many businesses today are using R-pM to align the cost-effective capital utilized in performance to produce value-quality results, for breakthrough competitive advantage. To learn how easy it is to align capital solutions with results produced and then maintain alignment with R-pM, visit result-performance-management.com. Download The R-pM Toolkit for complete details.
