Governments around the world are promising programs to prevent future business management problems

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.

There is only one problem to solve, the problem of obsolete 20^th century enterprise management

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

There is only one solution, organize the actual business with R-pM and apply 21^st Century Management Conventions and Standards

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 government programs 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.

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

Most governments likely will continue the past cosmetic approach to pass new regulations and announce that they have solved the problem. A courageous government must step forward and take the lead to institute a “Business Management Program” as discussed in this article. 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...]

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...]

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...]

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...]

20^th century management contrives a chart of accounts and follows fixed principles to record the enterprise

20^th century management does not organize, manage, record, or govern the business. Organization and management structures, such as budgets and the chart of accounts, are laid over the business to manage the enterprise. Accounting posts arbitrary enterprise accounts set up in the account structure. The business continually changes, while accounts may be periodically updated when there is no account to charge. The focus of accounting is on following accounting principles, rather than recording the actual business to provide complete, consistent, and accurate business management records and reports.

21^st Century Management records the actual business for one set of complete, consistent, and accurate management information

Result-performance Management (R-pM) organizes the actual business for 21^st Century Management. R-pM records the entities that comprise the business in the capital investments made in the business to provide one set of performance solutions of known worth, the one set of economic output results of known value that must be produced for business success, and the performance of the solutions to incur costs to produce total result costs and known result value-added. The one current and one strategic business structure is used to plan and record the complete business. Results record income, performance records expenditures, and capital records solutions of positive capital worth as assets and solutions of negative capital worth as liabilities. R-pm uses the business itself to plan and control all financial and non-financial business transactions and status against business plans [more...]

Information systems gather corporate data that is irrelevant to the business

20^th century information systems do not capture business data or provide the information needed to manage the actual business. 20^th century information systems manage organization and management structures laid over the business. Management structures are arbitrary and define inconsistent data entities. Data on hundreds entities must be recorded throughout the corporation, and then processed and managed creating information complexity and providing mountains of confusing information.

R-pM organizes the business to capture actual business data

The objective of 21^st century management is to organize and manage the business of the corporation. Result-performance Management (R-pM) directly organizes and manages the business to record actual business data and report business management information that is not available today. Timely integrated information solutions are delivered to produce specific business and management results. The business is defined by three information entities and managed through six information sets.

Business management information is used to manage the business directly

R-pM provides actual business management information on the worth and return of capital investments, utilization of capital in performance to incur costs and produce results, and results of value produced by the business. Once actual business information is provided, corporate information provided by overlaid 20^th century structures becomes irrelevant and can be abolished. 21^st century management can then concentrate on managing the business [more...]

Enterprises today do not know costs or worth of all capital utilized

Enterprises may capture some known costs for some known capital items like fixed assets or employees. But many capital items and costs remain unknown. Development costs may be captured for some other big-ticket capital items. In this case, costs usually include costs for other undefined solutions developed in the same project. Capital worth may be assessed for some tangible items, but cannot be done for all capital to know actual enterprise net worth.

Capital costs and worth are an integral part of the business and actual business management

The enterprise business consists of output results produced, capital deployed to be utilized for the result, and performance in the utilization of capital to incur costs and produce value in results. When the business is managed, results value and quality are managed, capital worth and investment returns are managed, and performance costs and effectiveness contributing to result value-added are managed. Results and capital are managed in result-capital development to plan and manage the result value-added to cover capital development costs and provide the return on investment.

R-pM is the only way to capture capital and performance costs and assess capital worth

Result-performance Management (R-pM) is the only way to organize and manage the actual business. All capital is managed to eliminate intangible assets, unknown costs, unknown capital and enterprise business worth, and unknown return on investments. Human and other capital is managed to control costs, invest only in capital needed, develop capital to create value, and maintain and increase capital worth [more...]

Information is not managed as capital for support and utilization

Today’s enterprise captures information on a multitude of entities that describe structures laid over the business, but captures little information on the few entities that describe the actual business. The many enterprise information systems produce enormous amounts of information. However, little is managed as information capital to be used to operate, improve, and manage the business. Much information is managed by the wrong capabilities, such as management accounting and data management by IT. Most information just adds to the information complexity and overload problems.

The explosion in enterprise information demands new information simplification and management solutions

With emails, internet searches, file transfers, etc information is entering and leaving the enterprise at a high rate and enterprises have no way consolidate information or consistently reference information to the business. Additional structures are laid over the business to reconcile and classify information. Special information systems are needed to locate, extract, reconcile, and report information of use to management. Additional investments are being made in various document, record, report, content, etc management systems to manage information scattered around the enterprise.

This cannot solve the problem. The only way to solve the problem is the simplify and organize the business as a few specific data entities, and professionally manage all data, knowledge, records, and intelligence through reference to these few data entities.

R-pM organizes information capital for delivery and utilization by the business

Result-performance Management organizes the business to capture data and produce other information related directly to the business and to eliminate data collection and information reporting not related to the business. All information in, entering, or leaving the business is referenced to a result, performance solution, or other business entity. Management information is captured and reported on the business for decisions to add, change, or close output results or capital utilized as performance solutions

R-pM organizes information capital for professional support and development

Information capital requires specific capabilities to develop and maintain professionally. All information capital is categorized as business data, human knowledge, facility records, and management intelligence for professional maintenance of information and development of information solutions to produce business and management results [more...]

Effective business collaboration is prevented by 20^th century management

Each enterprise today lays a different collection of structures over the business, and each structure defines the enterprise differently and captures inconsistently-defined data against the various structures. The 20^th century method of business collaboration is for businesses to lay the same process, information system, or data reconciliation and information reporting structure over the business. This is very expensive and still does not provide a satisfactory solution, since none of the collaborators actually organizes or manages the business.

Rule No. 9 of 21^st Century Management: Collaborate to maximize shared value and minimize shared costs

Effective business collaboration and outsourcing requires that the business of each collaborator be managed. If the business is managed, there are common definitions, value creation, performance costs, and quality levels that can be managed for each business and across businesses. 21^st century management requires that businesses be managed to enable collaboration by maximizing shared value and minimizing shared costs.

R-pM is one simple business structure used by all businesses to enable collaboration and integration

Result-performance Management organizes the business for 21^st Century Management to define the results, result quality, result value, result costs, and result value-added across the business. The capital utilized to produce each result is defined as performance solutions to know performance costs against the result. The business structure can be managed within a business or across businesses to create result value-quality chains where each result is produced for the highest value and quality for the lowest cost [more...]