Past and current financial crises have been caused by failure to manage the actual business

All financial crises, corporate governance problems, and other problems due to inadequate corporate or financial institution management have roots in one fundamental problem, the failure to organize and manage the actual business. 20^th century management lays many structures for organization, strategies, account charts, processes, scorecards, etc over the business to manage the enterprise. The actual business in the cash expenditures for specific capital investments, performance costs from capital utilization, value created in results, and value added providing profits, capital returns, and capital worth is hidden under overlaid structures and never reported to management.

Enormous sums of money are used to cover up actual problems and restore confidence

No attention is being paid to eliminating the pervasive financial institution and corporate management problems that led to the crisis. The funds are used to pay a higher worth for the currently worthless and unsellable assets of those who mismanaged corporate and personal funds, and transfer the potential further losses and gains to taxpayers. In effect, we keep covering up the unsolvable problems of 20^th century management that have never been solved and can never be solved by more 20^th century management.

Governments should help enterprises manage their actual businesses to eliminate 20^th century management problems

The big change is the change in thinking required to put aside the lifetimes of misleading teachings and experience and visualize and understand the business as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. Managing the business is common sense used by all to manage their personal businesses. The investment in managing the actual business is very small and recovered quickly in the added value-added of a managed business.

The cost of a government investment program to assist local enterprises to organize their businesses for 21^st Century Management is insignificant compared with the cost of bailing out companies and covering up the failures of 20^th century management. The program will provide transparent reporting of the business for management, shareholders, and regulatory authorities. The program will provide real economic boost in the new value created by organized and managed businesses. [more...]

The ongoing credit crunch and growing financial crisis show the failures of 20^th century management used today

20^th century management lays organization and management structures over the business to manage the enterprise arbitrarily, rather than managing the business. 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.

The problems being experienced today invariably point to the lack of information and management of 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 methods.

The only solution to the current problems and to prevent any enterprise from experiencing the same problems is Result-performance Management (R-pM)

Now is the time to wake up to the problems of obsolete 20^th century management. 20^th century management used today is a time bomb for all business enterprises in the world. The enterprise either will experience similar problems and losses due to the inadequacy of 20^th century management methods or will lose out to competitors who are now abandoning 20^th century management and organizing their business with R-pM for 21^st Century Management. R-pM is the only way to clear away structures laid over your business, and organize your actual business as one business structure for complete, consistent, and accurate 21^st Century Management. [more...]

Capital investments must be organized as solutions to be implemented and utilized as part of the business

Recently we discussed how business results and capital solutions must be organized together in a business structure, to organize the business as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. Capital solutions are organized into a capital structure by category in the human capability needed to develop and support specific solutions and by class in the business utilization of solutions to be ready to produce results, to produce actual results, and to have the information to produce and document results.

Capital management manages capital solution acquisition, development, and support

Capital management is fundamental to acquire, develop, and support capital utilized to produce results, and performance management is fundamental to implementing and maintaining cost-effective solutions to produce value-quality results. Organized and managed capital is required to eliminate intangible assets, unknown costs, underutilized capital, business complexity, unknown capital worth, and other unsolvable problems. Organized and managed capital is required to establish value chains, develop capital for precise business needs, respond quickly to add or delete business results, optimize operations, have skills and responsibilities for capital development, measure the precise return on capital investments, and gain other benefits prevented by the unorganized and unmanaged capital used today. [more...]

Government executives must manage a business the same as corporate executives

R-pM defines the business as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. This includes governments at all levels and all agencies, departments, commissions, enterprises, and other forms of business. The president or vice president are executives not legislators. Most recent presidents have had governor experience before becoming president. When evaluating a candidates experience the criterion should not be years of government experience, but particular executive experience or credentials that indicate actual capability to carry out presidential responsibilities and accomplish campaign promises.

Both political parties promise change and state that they have the experience to carry out change

Experience in initiating and managing beneficial change in a business is rare. For the vast majority, experience is an obstacle to change, since they base future methods and decisions on past experience. A manager advocating change should have experience in initiating and managing change.

Governor Sarah Palin is the first candidate in memory to run on the capability to initiate and manage change

It is easy to talk change, but very difficult to effect change. Governor Palin’s nomination is being criticized for a lack of experience. But, among the candidates, she has the most experience in actually managing business change. Governor Palin is not running on years of “experience”, but on specific accomplishments as an executive in effecting change. [more...]

Value has no value in 20^th century management used today

Value is an impressive word. People talk of value propositions, strategic value, value chains, value creation, and value management as if they were actually measuring and utilizing value as a day-to-day business metric. But looking further, we find that value is calculated from a contrived business overlay or formula.

20^th century enterprise organization and management prevents the utilization of value as a day-to-day business metric.

R-pM organizes the business to make value a manageable and valuable result metric

We must organize the business through Result-performance Management (R-pM) for day-to-day 21^st Century Management. Value is an attribute of output results produced by the utilization of capital in performance across the business. The value of input results from suppliers, plus each result in the business result chain, equals the value imparted to customer results in customer willingness to pay. [more...]

Capital development and support and capital utilization in performance is not managed today

Capital, utilized to produce results, cannot be managed if it resides in a responsibility center, is administered by a function, or is labeled as an "intangible asset". Some capital may be defined as an asset for depreciation, but capital is not managed as the solutions needed by the business. Enterprises make large investments in capital and then fail to manage the utilization of the capital to create known value in results and provide the known return on the capital investment.

21^st Century Management requires Capital Management and Performance Management

One key element of 21^st century management is proper capital management to define all capital as specific solutions. Capital Management manages solutions for planning, development, support, and operation.

Within Capital Management is Performance Management, so that a performance manager manages the utilization of each solution in performance to deploy and maintain a qualified solution that meets expectations, to be utilized by a result manager to produce results.

R-pM manages capital and performance as components of the business to produce results

Result-performance Management (R-pM) organizes and manages the actual business as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. Capital is managed to be of high-worth, by being developed to add specific result value and then being utilized in performance for a managed performance cost and effectiveness to create greater value and quality in the results produced. The return on the capital investment and the capital solution worth can be known only by measuring the value-added to results attributable to the solution over its useful life. [more...]

Many managers are interested in R-pM, but are concerned about the authenticity of R-pM

People ask how R-pM originated. Some people are concerned about the authenticity and viability of R-pM.

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

R-pM was originally developed as aids to capital solution development and management improvement projects

R-pM 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 Result-performance Management began in 2002

After retiring from active consulting, work began in 2002, to develop and document Result-performance Management (R-pM) as the one structure to organize and manage the business. The R-pM Toolkit is now available, and continues to be developed as R-pM evolves. R-pM is now launched for use in business change applications and for use in forward-looking enterprises that want to learn their actual business, and then organize and manage the business for breakthrough cost reductions and competitive advantages. [more...]

Today we have many generally-accepted accounting problems

Accounting is a major problem in the 20^th century enterprise. Management is faced with generally-accepted accounting problems. Financial records are missing for much of the business cycle. Management financial information is inconsistent, inaccurate, and incomplete. Many well-known problems like intangible assets, unknown costs, unknown capital worth, unknown investment returns, unknown value creation continue unsolved. Accounting is often equated to records management. Most enterprise non-financial records are scattered, missing, and mismanaged.

R-pM builds professional records management to manage all financial and non-financial facility records capital

Result-performance Management (R-pM) builds professional records management to provide complete financial and non-financial facility record capital solutions for 21^st Century Management. R-pM manages the full business cycle to keep accurate records on all performance costs, performance effectiveness, result volumes, result quality, result values, result value-added, tangible and intangible assets of positive capital worth, liabilities as specific solutions of negative capital worth, and accurate enterprise business net worth. R-pM provides one set of accurate management information on the strategic, planned, actual, and historic business. [more...]

Today's enterprise cannot manage the business in capital, performance, or results

Today’s enterprise cannot manage the business, since organization, process, account, activity, human resource, and other rigid management structures are laid over the actual business. The business consists of capital invested as solutions in the business, business performance in the utilization of capital solutions, and output results produced by business performance. Structures laid over the business conflict with the real changing business causing unsolvable 20^th century management problems.

Capital, performance, and results must be organized to organize the business

Result-performance Management (R-pM) organizes the business for 21^st century management. R-pM organizes capital as business, human, facility, and management solutions. R-pM organizes results to produce revenues, manage and support capital, and manage and develop the current to strategic business. R-pM organizes performance to utilize specific solutions to incur costs to produce value in a result.

R-pM manages the business in three dimensions: result, performance, and management

R-pM manages results produced across the business to provide value and quality to customers and reach revenue result goals. R-pM optimizes performance for each capital solution utilized to produce results to provide high-worth solutions that produce result value and quality at a controlled cost to reach profit margin result goals. R-pM provides management over time to manage and collaborate in value-quality chains, to plan and manage capital development and result value-added benefits, and to govern the business to reach strategic value result goal [more...]

Financial management used today has never solved financial management problems

Why do we have unsolvable financial management problems like intangible assets, unknown costs and value, distorted capital worth, un-managed investments and returns, and ill-informed corporate governance? The problems exist because we do not organize and manage the business and we do not organize and manage the capital utilized in the business. Financial management of cash and accruals does not provide accurate business financial management, and is separated from other tangible capital creating capital management problems.

R-pM manages financial and other capital as part of the business

The solution is Result-performance Management (R-pM) to organize the business and the capital utilized for 21^st Century Management. Financial facilities are part of facility capital that manages traditional tangible assets. Financial management is part of facility capital management to integrate and manage all facility financial and equipment assets, facility supply, and financial and non-financial facility records. R-pM eliminates unsolvable financial management problems and manages and reports all financial and other capital as part of actual business operation and development.

R-pM develops specific capital solutions, utilizes all solutions to produce value in results, and manages all investment returns

R-pM provides comprehensive facility capital management to manage all financial and non-financial reusable facility equipment, consumable facility supply, and facility record capital to produce value in results. R-pM manages all capital as part of the business to be developed and supported, and to be utilized in performance to produce output results of value. R-pm uses information technology to manage all capital solutions to know capital worth, development costs, un-amortized balance, performance costs, attributable result value-added, and return of the solution investment. [more...]