20^th century capital development is ad-hoc and separate from the business

Capital is not acquired, developed, or managed as part of the business today. Capital financial investments are made by a financial unit in isolation from the business or returns needed for the business. Capital development investments are normally ad-hoc projects to produce a new fixed asset or to lay a new structure over the business. The specific solutions involved, the investment cost by solution, or the output results of benefit to be produced by the investment rarely are known.

Capital development must develop specific solutions to utilize in performance to produce measured results

Capital solutions needed by the business must be planned and developed by result to be produced by utilizing the capital. Each result absorbs a portion of the investment cost and provides a value-added to contribute to the return on the solution investment. The full set of solutions needed to produce the result must be planned and integrated to produce results successfully with a high value-added. Capital solutions must be produced as results of a development project to utilize project capital and capture full costs of the solution. The solution is implemented with the investment balance to be amortized against the results produced over the solution life.

21^st century capital development produces result value-added for solution return and worth

Implemented solutions are utilized to produce each volume of output results. The performance costs are captured against each result and reduce the unamortized investment balance and capital worth to pay back the investment. The result value-added over total performance costs should be positive to provide a further gain on the investment. The future solution worth is determined by the continuing absorption of performance costs until paid back and the future result value-added from solution utilization over the remaining life and later sale or disposal. [more...]

20^th century enterprise management lays strategic structures over the business

20^th century enterprise management contrives structures to define the corporate strategy in corporate plans, maps, investment plans, IT plans, financial plans, and other structures laid over the business. The strategic business is not planned. The overlaid structures do not relate to the actual business and may conflict with structures used to manage the corporation. Strategic value numbers are pulled out of the air. There is no good method to govern the transition from the current corporate status to the strategic objective. Corporate governance cannot govern the actual business, so it governs through compliance with arbitrary rules and regulations.

Rule No. 6 for 21^st century business management: Plan and govern the transition from today’s value to approved strategic value.

The business is “investments in capital as solutions of worth utilized for cost and effectiveness of performance to produce value and quality in results”. The business must be planned to know the economic output results that must be produced for business success and the capital investments in the business that are required to produce the results. The business must be managed to know result value, full performance costs, result value-added, complete capital worth, capital investment returns for all solutions, and other essential business measures that are unknown today. The strategic business structure provides the foundation for planning the results to be produced and capital to be utilized at a 2-5 year strategic horizon. Strategic result value is substantiated in specific period by period result goals requiring growth in value of current results and the value of new results enabled by implementation of capital of worth.

Business goals are planned from the current to strategic business for management and good governance

21^st century business management enables good management and governance of the transition to the strategic business by reporting financial and non-financial status against result goals and performance expectations, updating strategic estimates, providing result evaluations and performance assessments, and providing management information on anticipated opportunities, threats, and developments. Good corporate governance ensures responsible business management and planned progress to the approved strategic business. [more...]

20^th century management cannot manage investments, development, or returns

20^th century enterprise management develops capital as a tangible asset or project outcome. The specific capital items to be developed and the specific business improvements to be made are not defined or managed. So, it is impossible to plan and manage capital development to provide a measured return on investment.

Rule No. 7 of 21^st century business management: Manage all capital investments to gain a planned return

The investment management problem is solved by rule no 7 of 21^st century business management. All capital investments must manage the results to be produced by the investment as well as the capital needed as specific capital solutions. The increase in value in new and improved results and the development cost of specific capital solutions must be planned to justify the investment. Development project results are managed to implement solutions to create value and added result value is measured in operations know the return on investment.

Plan and develop both the results and capital solutions needed in results-driven capital development.

21^st century business management replaces capital development with results-driven capital development to actually plan and manage capital investments and development for a measured return on investment. The return on investment is provided by the value created in results produced to date attributed to each capital solution utilized. [more...]

It is impossible to manage capital development properly today with 20^th century management

20^th century management used today does not provide a framework for proper capital development. Capital development develops specific solutions that must be utilized by the business. Capital development incurs the costs of development and sets up the cost of capital utilization. But today, capital is not defined and managed as a set of capital solutions available to the business. Capital is categorized as employees, fixed assets, intangible assets, etc.

Implemented capital is utilized in business performance to produce output results of value. Result development provides the benefits of development and the value-added that provides the return on investment. But today, results are not defined and managed as a set to be produced by the business. Some results are managed as separate items, such as product, sales order, revenue, etc. 20^th century management manages capital development separate from the business to develop certain known capital.

The business must be organize to enable result-capital development

21^st century business management organizes the business in results that must be produced for business success, capital that must be invested in the business to produce results, and performance in the utilization of specific implemented capital as solutions to produce specific results. Once the business is managed, it is straight forward to identify new results required to improve and expand the business. Once the business is managed, it is also straight forward to identify the capital solutions needed to produce the results. New result development and new capital solution development is planned and managed as part of the business. [more...]

Enterprises continue to waste funds on dead-end 20^th century management investments

20^th century management investments have created the maze of organization and management structures laid over the business that cause today’s unsolvable problems with alignment, change management, unknown costs and value, unknown capital worth and investment returns, business and information complexity, business collaboration, and on and on. New 20^th century management investments in reorganizations, enterprise information systems, process and performance improvements, IT architectures, etc are dead-ends that add to unsolvable problems.

It only requires a small alternative investment to organize the business for 21^st century management

The alternative is to invest in managing the actual business to eliminate unsolvable 20^th century management problems. The investment to organize and utilize existing capital to produce results along result value-quality chains and across the business is relatively small and one time. The big change is the change in thinking to understand and manage the actual business. Existing information systems can manage the business and existing processes and systems as solutions can be utilized to produce specific results. Once the business is organized all tangible and intangible capital invested in the business is organized as capital solutions of worth to be utilized in performance to incur costs and produce value in results. All structures laid over the business are cleared away to focus on business data collection and provision of information and other capital solutions needed for actual business management.

Once the business is managed, business change investments are minimized to new capital advances to produce valuable new results.

The only way to plan and develop capital for a planned and measured return on investment is to manage the business. Capital is managed to minimize investments to those essential to the actual business. Future investments are in capital solutions needed to produce specific new or improved results. The development costs are captured and amortized against results produced and return on investment in added result value-added is captured against the capital solution. [more...]

The inability to manage capital worth is a large problem that contributes to the economic crisis

Many financial institutions and corporations cite the inability to know and manage "asset value", which is actually capital worth, as a contributor to the economic crisis. Usually, capital worth is not managed until it comes time to sell or liquidate the asset, when the actual worth turns out to be much less than worth in the books causing large and sudden write-downs. In other cases, corporations are forced to state the worth according to an arbitrary rule like "mark to market", which may not reflect the plan for utilization of the asset in the business.

The business must be managed to manage capital solution worth as part of the business

Corporations do not manage the business today, so capital worth cannot be managed as part of the business. Capital is not managed as specific solutions utilized to produce results of known value, with many solutions unknown or labeled as intangible assets. Results are not managed as a set to determine the costs absorbed and value-added in the utilization to produce the result and value-added in the disposal of the solution, which determines the worth of the solution.

Total capital worth and result value-added must be managed to manage total business worth

Since capital solutions and results are not defined and managed as data sets today, actual business data cannot be captured and actual business information cannot be reported to management. This includes the positive worth of asset and negative worth of liability solutions utilized by the business, which adds up to the total business worth. The total business worth is also assessed by the total result value-added to be produced by the business over the future business payback period at the cost of capital or other return desired. This again can only be estimated in an unmanaged business. [more...]

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...]

Unsolvable problems have persisted throughout 20^th century management leading to the current crisis and recession

Throughout the 20^th century, we have had continual problems with re-organizations, business complexity, intangible assets, alignment, change management, unknown costs and value, unknown capital worth and returns, ill-informed corporate governance, and so on. These unsolvable problems are the underlying cause of the financial crisis and recession. Thousands of new methods have been contrived and books have been written to solve 20^th century problems once and for all. So, why do we still have the problems?

The top ten problems of 20^th century management arise from failure to organize and manage the business

We have only one fundamental problem in 20^th century management. The business has never been organized and managed. We organize people into an organization structure that is laid over the business. We then lay more management structures for strategy and planning, accounts, business processes, performance management, administration, etc over the business. The 20^th century change management approach is to improve the overlaid structures or to lay more structures over the business. The government response to business, financial, and economic problems is to impose more regulations and reporting on the business. No one addresses the well-known 20^th century management problems.

The unsolvable problems must be eliminated by organizing the business with R-pM for 21^st Century Management

The only solution is to eliminate unsolvable 20^th century management problems by organizing the actual business as one business structure through Result-performance Management (R-pM) for 21^st Century Management. R-pM organizes, plans, directs, controls, reports, and governs the business through the current business structure and result goals by time period leading to the approved strategic business structure. The business structure provides the architecture for organizing all businesses in an industry and all businesses in an area or sector of the economy; so the government can manage businesses in an industry, such as the financial industry, and businesses in an economy. [more...]

A Business Management Program benefits all participants

R-pM is a breakthrough to new competitive advantages. R-pM is implemented best as part of a coordinated Business Management Program to assist enterprises within a nation or region to organize and manage their businesses. The Business Management Program also promotes support from local management consultants, business service providers, professional associations, software and solution providers, accounting and audit firms, education institutions, and government business promotion and regulatory bodies. The Business Management Program instills confidence that beneficial longer-term measures will solve problems and prevent repeats. All participants gain in improved business management and new competitive advantages of R-pM and 21^st Century Management.

R-pM opens new opportunities for professional services and business software and solutions

R-pM implementation to date is piecemeal in certain forward-looking enterprises in various countries. The financial crisis has created a surge of interest in R-pM from enterprises, consultants, and solution providers. The interest in R-pM and Business Management Programs creates opportunities for service and solution providers to use R-pM as a basis for 21^st Century Management consulting, services, and solutions. R-pM users will be seeking services and solutions and R-pM will provide a directory of licensed R-pM consultants and solution providers. More enterprises will adopt R-pM to compete with managed businesses. This provides open-ended opportunities for 21^st Century management consultants, solutions, and services.

Governments, industries, and businesses improve economic management

20^th century management prevents Governments from understanding and managing economies, industries, markets, and businesses as part of one consistent and manageable structure. R-pM provides one uniform business structure to manage all economies, industries with an economy, businesses with an industry, and result sets within a business in terms of results produced and capital solutions utilized. Economies are viewed as result and capital solution supply and demand and individual result and capital solution markets. Business management reporting supports economic and financial management. Economic result and capital solution surpluses and shortfalls can be forecasted and resolved. Future business, financial, and economic crises are prevented and business and economic cycles are managed. [more...]

The current financial crisis is caused by failure to manage capital worth as part of the business

Governments encouraged creation of mortgage securities to enable banks to loan more money and poorly-secured mortgages to enable low-income earners to own homes. Investment banks bundled mortgages to sell as capital investment security solutions, with unsubstantiated "asset value" or, in business terms, capital worth. A dangerous situation grew as housing prices spiraled up, while the actual worth of capital investment solutions decreased, but could not be managed by 20^th century management or detected by 20^th century accounting. The unaccounted for and unmanaged decline came to light as borrowers defaulted and suddenly we have a world financial crisis. The financial crisis shows the very serious unsolvable problems and significant financial losses incurred in the way all business are managed today that are explained in every article in 21^st Century Management Magazine.

Now is the time to replace 20^th century management with R-pM to ensure proper business management and prevent future crises

All financial and other business crises are caused by poor business management. The good business management needed is prevented by 20^th century management used by all government, financial, and other enterprises today. The only solution available is to enable good business management with Result-performance Management (R-pM) by clearing away 20^th century management structures laid over the business and managing actual business data and utilizing actual business management information. Specific capital solutions invested in the business and capital solution investments by the business must be managed for value-creation, costs of utilization, return on investments, and changing capital worth that is not managed today. Now is the time for governments, financial institutions, corporations, and other enterprises to wake up to fundamental management problems and institute the only solution to organize and manage the actual business. [more...]