You cannot manage your business, because your business is not organized

20^th century management does not organize the actual business enterprise. Instead, an enterprise organization structure is laid over the business. The organization structure is the fatal error of 20^th century management. Once an organization structure is laid over the business, the business can never be managed.

Since your actual business has never been defined or organized, you cannot manage your business. You must manage artificial entities described in separate management structures laid over your business. You plan in corporate planning and budget structures, direct operations in business process and information system structures, administer through administration structures, control through an account structure, and report through performance management and reporting structures.

You can manage your business directly with Result-performance Management (R-pM)

Result-performance Management (R-pM) replaces 20^th century management structures with one 21^st century business structure to integrate business organization and management. All business organization, planning, directing, control, and reporting is against one business structure. Your business management and decisions involve the specific performance solutions used to produce specific business results. You manage result value, performance costs, result value-added, capital worth, and other attributes of the actual business that you have never managed in 20^th century management [more...]

Business processes and information systems laid over the business prevent management of costs, value, and quality

20^th century management lays monolithic business processes and information systems over the business to manage business performance. Results produced by the business are defined as performance and are not specifically identified and managed as a set or chain leading to final results that go to the customer. This prevents to business from managing the cost of producing a result, the result value, the result quality, and the result value added. Much time and money is wasted trying to reconcile ill-defined processes and systems for business collaboration.

Rule No. 2 of the 10 rules of 21^st Century Management: Generate profits from a chain of managed value and quality

Result-performance Management (R-pM) organizes the performance producing each result and organizes results as value-quality chains to manage cost-effective performance producing value-quality results to provide high value and high quality customer results.

R-pM produces customer business results from result value-quality chains

R-pM redefines business processes and information systems by the results produced and manages each result in the result value-quality chain starting from input results from the supplier, result value added along the enterprise result chain, and the final result to the customer. R-pM manages result value-added to contribute directly to the profit result. R-pM enables the business to integrate and manage the chain to help suppliers meet enterprise needs and to add more value by meeting customer needs [more...]

Existing business processes and systems can by improved significantly

Over the past 15 years corporations and other enterprises have implemented business processes and packaged information systems, like ERP, SCM, MRP, and CRM. These processes and systems provided general improvement, but usually still include extra costs and inefficiencies. Business processes and systems are laid over the actual business, rather than being utilized as a part of the business. Many corporations want to improve their process and system utilization, but lack a fundamentally-sound method.

Use R-pM to define processes and systems as a result value-quality chain

Result-performance Management (R-pM) provides the method by identifying and managing the actual business that lies hidden under the processes and systems. The business is defined by the economic output results produced and the capital, such as business processes and systems, utilized as specific performance solutions to produce specific results. R-pM redefines processes and systems as performance solutions that are utilized in result value-quality chains. R-pM minimizes the performance solutions utilized and maximizes the result produced at each link in the chain, so the corporation can manage value and quality across existing processes and systems.

Process and system performance is improved result by result across the result chain

R-pM makes business processes and systems a part of the actual business, instead of structures laid over the business. Business process and information system processing utilized to produce each result in the result chain is analyzed to integrate the process, eliminate waste, and produce a high value-quality result. Doing this, result by result, defines the actual business and maximizes the benefits from existing processes and systems [more...]

Today's definition of the enterprise business is "the activity of providing goods and services". But, we cannot organize or manage the business because today's definition of performance defines both the activity of providing and the goods and serviced provided as performance.

As shown in the article of December 13, 2007, the R-pM definition of the business is "the utilization of capital as performance solutions to produce value in specific results". Therefore, results must be separated from performance. Two components of the business must be organized the performance solutions utilized in "the activity of providing" and the results produced in "the goods and services provided". Only then can we capture actual business data of the cost and effectiveness of performance and the value and quality of results to report to management on cost-effective performance producing value-quality results. [more...]

We all have our personal business in the things we accomplish in life, and may work for a business enterprise. But, what is the definition of the business, be it our personal business or the enterprise business?

In our personal business we naturally utilize our time, capability, knowledge, cash, tools, outsourced services, a process, etc to produce a result, such as prepared dinner, arrived at destination, cleaned suit, repaired house, completed report, purchased product, enjoyed night out, etc. The value of the result we produce must exceed the cost of producing the result, in order for us to be happy with the result.

The enterprise business is the same. The enterprise business utilizes capital in performance solutions, such as human time and capabilities, cash and supplies, equipment, a process or system, etc to produce economic output results, such as a product produced, a service delivered, payment received, a completed report, etc. This is reflected in the common definition of the enterprise business as “the activity of providing goods and services”. This enterprise business definition can be reworded as “the utilization of capital in performance to produce value in results”. Therefore, in order to organize and manage the business, we must organize and manage the utilization of capital in performance to produce value in results. [more...]

All of us have heard of various alignment problems to align the organization, processes, information systems, human resource administration, financial and IT strategies, knowledge and capability development, accounts, capital development, outsourcing, supplier specifications, customer needs, tangible and intangible assets, etc with the business. All of these alignment problems are caused by rigid 20^th century organization and management structures that are laid over the business. The rigid structures conflict with the actual business, causing business change problems, and go further out of alignment as the business changes. Periodically new organization, accounting, process, administration, and other structures must be redesigned to align them closer to the business, and then the cycle is repeated.

Hundreds of books and solutions exist to solve the "alignment" problems, but alignment problems remain unsolved. Alignment problems can never be solved by laying new structures over the business, or by contriving methods to align overlaid structures with each other. The overlaid structures cannot be aligned with the business, because the actual business has never been defined or organized.

The solution to the alignment problem is obvious. The generally-accepted definition of the enterprise business is "the activity of providing goods and services". The business has two components: "the activity of providing" and "the goods and services provided". We must organize the business to align the business activity in performance with the goods and services provided as results.

Result-performance Management (R-pM) eliminates alignment problems by organizing the business for 21^st Century Management. Overlaid structures are replaced with one integrated business structure to align the organization, process, systems, accounts, and other structures as performance solutions deployed to produce specific economic output results. All performance solutions are aligned as one component of the business with the results produced as the other component of the business. [more...]

20^th century management lays a monolithic business process over the business. Results are mixed with performance and defined as "performance" preventing actual business management. The objective is to manage "performance quality", but costs, value, effectiveness, and quality are hidden in the process.

Rule No. 2 of 21^st Century Management is to "Generate profits from a chain of managed value and quality". Result-performance Management (R-pM) replaces business processes with result value-quality chains to organize and manage the actual business to manage performance capacity to produce a result volume, performance effectiveness producing result quality, and performance costs creating result value. Result value-added is the result value less the total result cost. The actual business is managed to generate profits from a chain of managed result value-added. Contrived overlaid business processes are abolished. [more...]

20^th century management does not capture actual business data and does not provide the information to manage the actual business. 20^th century management gathers mountains of information, which are mostly irrelevant to the business, related to structures laid over the business. This creates the enormous IT overheads and information complexity problems. 20^th century management provides management information to manage structures laid over the business, rather than managing the actual business.

21^st Century Management manages the actual business through two integrating entities, capital utilized as performance solutions and economic output results produced. This enables data to be gathered on all actual business activity. Actual business management information solutions can be delivered to utilize any specific performance solution to produce any specific result, anywhere in the business. Information capital is managed professionally by those with the capability to provide information performance solutions needed to create value in results. [more...]

20^th century management provides many methods of cost accounting. None of the methods has been able to capture all costs and charge all costs to the proper entity to absorb costs. Known costs are captured from separate entities, such as employee, fixed asset, cash, and supplies. Costs are charged to entities like center, activity, station, etc, that show where the cost was incurred, but were not produced by the cost.

Management needs one entity that contains all the costs incurred by the business and one entity that was produced by the cost to absorb the cost properly. Result-performance Management (R-pM) provides the one entity "performance solution" that produces all costs. R-pM provides the one entity "result" that was produced by the cost to create value, and can properly absorb costs to know result value-added. Result-performance costing is the only method to know all performance costs, and to charge costs properly to the value of the specific result produced. [more...]

Many enterprises have invested in quality management with TQM, ISO 9000, BPR, etc. But, how many are satisfied that they have the solution needed to manage quality across the enterprise? Many enterprises put a large effort into managing performance quality in their business processes.

Result-performance Management provides the means to know and manage the quality produced by everyone in the enterprise. The only way to manage enterprise quality is to manage the quality of results produced across the enterprise. Quality is an attribute of the result, not performance. Each performance solution utilized must be effective to produce a quality result. The quality in a business process cannot be managed by managing "performance quality". The business process must be replaced by a result quality chain to manage the effectiveness of performance producing each result and the quality of each result along the chain [more...]