The Business Performance Problem
Businesses develop conventional ways of operations and administration over the years. Practices and structures are installed to meet the preferences of a certain manager at a certain time. They then become the conventional way to operate. Successive processes and systems are implemented and adapted so that people do not change the way they do things. Enterprises address improvements to the business by trying to improve performance by implementing performance structures like business processes, information systems, performance management, and so on.
Business performance structures are laid over the business
The fundamental problem is that business performance structures are laid over the business, rather than directly managing business performance in the capital solutions utilized to produce business results.
Business processes are re-engineered to improve business performance and performance quality. Business process management lays a process structure over the business to produce an output result from the process, but does not organize the business to utilize capital solutions in performance to produce output results, within the process. Business process management manages quality checkpoints or other contrived methods to manage performance quality, but does not manage the cost-effectiveness of specific capital utilized in performance to manage result value and quality along the chain of results.
Enterprise systems are overlaid to convert business processing to the system processing
Enterprise information systems are implemented through conversions as additional overlays on the business, without positive business change. Some transactions are still performed manually or on PCs and the database is not authoritative for the enterprise business. The business environment changes but the business traditions remain sacred.
Enterprises organize by function to perform similar tasks rather than organizing to achieve important results. Performance reporting measures level of activity rather than real results. The function is the driver of business practices and methods. Few business functions are directed towards their internal or external customer. Functions are performed whether they are important to the core business or not.
Enterprises rarely evaluate to cost of overlaid business performance structures
Enterprises rarely evaluate the cost and benefit of the existing way of doing business. In many enterprises, business processes are re-engineered without changing the functional empire or considering enterprise system needs. Business performance structures are overlaid without understanding the value or benefit that should be provided. Business change is the responsibility of the consultants or change team, rather than the line management. Much business change ends up being cosmetic, rather than addressing the fundamental hard-to-solve problems. Over the years, the cost of business change multiplied while the benefits remained marginal.
The Business Performance Solution
What is “business performance”? The enterprise business is generally defined as “the activity of providing goods and services”. The definition shows that the business has two components. The activity, which is the utilization of capital in business performance, and the goods and services which are business output results. But the definition of business performance does not distinguish the capital solutions utilized in the actions executed by the business, from the output results accomplished from the performance. Results, capital utilization, and performance are mixed together and not managed in business processes, performance management methods, resource planning systems, and key performance indicators (KPI).
Business performance improvement is improvement in the capital solutions utilized to produce results
Real business performance improvement must improve specific capital solutions utilized in business activity, in order to improve enterprise goods and services and other output business results produced.
But, businesses cannot improve performance without change. The change must be positively directed toward achieving results, providing customer service and satisfaction, and generating profits. Business performance improvement cannot occur in isolation. It requires integration with systems, people, customers, partners, and management. All the capital solutions utilized to produce a result must be improved and integrated. The line manager must be responsible for utilizing solutions to produce a value-quality result. Managers responsible for capital and performance support must provide qualified capital solutions needed by line management to utilize in performance to produce results.
Business results must be managed separate from business performance
In order to manage the actual business results must be separated from performance and managed as one set of business outputs required for business success. Capital investments must be managed as capital solutions in one set of capital available for utilization by the business. Performance must be managed in the utilization of specific solutions to produce specific results in one set performance records and transactions.
Result-performance Management (R-pM) organizes the business as capital solutions to be utilized and results to be produced
The answer is Result-performance Management (R-pM). R-pM organizes the business results to be produced, the capital solutions to be utilized, and performance in the utilization of a specific solution to produce a specific result. Human capital is defined as specific capital solutions deployed to manage and produce specific results. No organization or other structures are laid over the business.
With R-pM, performance is directed toward accomplishing a result rather than performing tasks. The result should be important to the success of the enterprise. If not, perhaps someone else could produce the result better and for lower cost. Accomplishing critical key results is the purpose of the enterprise’s core business. Best practices are not what others are doing, but the best utilization of qualified capital solutions to produce a high value-quality result. Business processes are replaced by result value-quality chains, that manage the minimum performance needed to produce each result in the chain. Partnerships and extensions to the enterprise are designed as part of the business, result value-quality chains.
Business performance is the performance of capital solutions utilized to produce results
With R-pM, business performance is the performance of specific capital solutions in performance to produce specific results. Business capital consists of organization, process, and data solutions that are designed to produce that specific result, and cannot be utilized for results in general. Business performance is managed to produce a chain of specific results. The chain is defined by the relationship between results, rather than a contrived process flow. Quality and value is managed for each result in the chain, rather than the futile attempts to determine performance quality or value. Specific business performance solutions are managed for cost and effectiveness in producing specific business result value and quality.
With R-pM, results managers are given result goals that require business performance improvement to achieve. In this way, business result management and staff are instrumental in devising new capital solutions and putting them to work. With R-pM, result managers are supported by performance managers responsible for providing cost-effective capital solutions and assisting the utilization of the solutions.
The enterprise is managed through managed businesses
Many financial institutions and corporations today have severe management problems in managing the performance of different divisions, subsidiaries, projects, and other parts of the enterprise. R-pM manages each part of the enterprise as a separate business with specific result management, capital management, and performance management responsibilities. Each business is part of the larger enterprise business and each business structure is automatically updated to the overall enterprise business structure. Problems shown at the enterprise level can be traced to the business level and corrected. Everybody in the enterprise understands their role to utilize specific solutions in performance to produce specific results.
Solve business performance management problems by managing the business with R-pM
Manage business performance effectively through R-pM to eliminate the problems that caused the financial crisis. Learn and use R-pM to separate results from performance and properly organize, report, and manage performance against the result produced to optimize the business through 21st Century Management.
Visit Result-performance-Management.com to learn more about organizing your business with R-pM for 21st Century Management, and to obtain the R-pM Toolkit, your 21st Century Management Manual.
The R-pM Solution to the Economic Crisis is explained in free downloads
Three free white papers explain the dead-end 20th century management problems that caused the economic crisis, the way R-pM eliminates the problems, and a government program to address the crisis by stimulating the economy, solving the problems, building an architecture for financial and economic management, and organizing local businesses to flourish in the eventual recovery.
- How to Eliminate Problems that caused the Economic Crisis explains the major unsolvable 20th century management problems and the R-pM solution
- The Only Solution to the Economic Crisis explains how R-pM manages the business to capture actual business data and provide management the information needed for actual business management
- A Government Business Management Program to Answer the Economic Crisis outlines a government program to encourage business management and manage economic cycles to prevent future crisis
These three white paper downloads are available to R-pM Community Members at Result-performance Management.com. There is no cost or obligation to join the R-pM Community. Join by entering your email and password. Your email address is protected and used only for download problems and occasional R-pM Member news and white papers.
