The financial crisis is caused by business performance problems

Business performance used by financial institutions, corporations, and other enterprises today is a problem. Business performance is defined to include both the performance of the business in the utilization of capital and the output results produced by the business. Capital utilized in performance and results produced are mixed together in business processes, performance management, key performance indicators (KPI), and other business performance structures laid over the business. Business performance improvement stresses performance, performance quality, and the flow of performance without managing improvement to business results produced by the performance or the investment in capital solutions utilized by the business to manage investment returns and capital worth (also called asset value).

Business performance management prevents actual business management

Structures laid over the business hide actual business capital solutions, actual business performance, and actual business results produced. The business changes with each change to a result produced or new investments in capital solutions utilized. Business change cannot be managed and conflicts with overlaid structures causing unsolvable 20^th century management and performance problems.

R-pM converts performance management to Result-performance Management

Result-performance Management (R-pM) organizes the actual business through organized and managed capital solutions utilized in performance to produce specific results in a business structure. The one integrated business structure is used to manage the business for each part of the enterprise. The organized businesses within a larger enterprise add up the enterprise business structure. R-pM manages each business in the enterprise and the complete enterprise business to eliminate performance problems through 21^st century management. [more...]

Management consultants fail to address the business problems that caused the financial crisis

Virtually all the financial institutions, corporations, and other enterprises that have problems due to economic recession, retain management consultants for advice and management improvements. No current management consultant has the outlook or capability to help their client eliminate the one problem that holds back all enterprises and caused the financial crisis, the failure to manage the business.

All consultants today promote dead-end 20^th century management

Much business change management consulting has been packaged into business services provided by hired staff, rather than professional problem solving for measured improvement. Recent books and media publicity show cases where the enterprise did not receive the professional services expected from management consultants. All consulting services today promote obsolete 20^st century management.

A new management consulting model is needed to restore professionalism and prevent business problems

A management consulting model is needed to eliminate problems by providing:

• Services based on organizing the business for 21^st century management
• A method for the enterprise to lead and participate properly in business change
• A clear framework to manage the scope and participation for both parties
• Methods and tools that both the enterprise and consultant understand and use
• Planned and measured value of the consultant and success of the enterprise

The model must build enterprise capabilities to manage the business and business change, and focus consultants on high-value professional results the client enterprise cannot achieve on its own.

The R-pM Management Consulting Model organizes services within an enterprise, market, industry, or economy business structure

The R-pM Management Consulting Model scopes all services within a business structure, and extends the structure to cover the complete enterprise, market, industries, and economies. All services provide a measurable result value-added return to the client enterprise. [more...]

Governments responses to economic crisis do not solve the problem

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. This weekend the Chief Executives of the top 20 developed and developing countries met to discuss the economic recession. They discussed actions to revamp international financial regulatory institutions, improve financial institution regulation, and to stimulate world economies. These actions do not address the fundamental problem or prevent recurrence of the same problems in the future.

There is only one problem to solve, the failure to manage the business

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

There is only one solution, manage the actual business with R-pM

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 governments 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. R-pM captures actual business data, not captured today, and provides the architecture to manage industries, such as the financial industry, markets, and economies as summaries of the businesses involved.

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

Any government response to the financial crisis or to provide economic stimulus should include a Business Management Program to solve the underlying problem. A group of governments or a forward-looking government must take the lead to institute a “Business Management Program” as discussed. 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...]

The financial 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 arbitrarily, rather than managing the business. This causes the fundamental problem in all business 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 with Result-performance Management (R-pM).

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 available is Result-performance Management (R-pM)

Result-performance Management, the only solution available to organize and manage the actual business. 20^th century management used today 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 with R-pM for 21^st Century Management.

R-pM manages the current and strategic business structure for complete, consistent, and accurate 21^st Century Management information. R-pM provides the architecture to summarize managed businesses into manageable markets, industries, and economies for global financial, economic, and business management and future stability. The government action needed is outlined in a free download, "A Business Management Program to Answer the Financial Crisis". [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...]

R-pM eliminates the causes of the financial crisis and economic recession

Result-performance Management (R-pM), is the new breakthrough in organizing the enterprise business for 21^st century management. R-pM eliminates the unsolvable problems that caused the financial crisis such as intangible assets, unknown costs and value creation, unknown capital worth and investment returns, financial management through structures and models instead as part of capital management, lack of business management information, and lack of a consistent structure for economic management.

R-pM is real business transformation, not a structure laid over the business

R-pM is not another business change or transformation methodology, like business process management, business performance management or quality management structures. R-pM is the only way to organize and manage the business of a corporation or other enterprise to be competitive in the 21^st century. R-pM is the final business transformation. Once R-pM organizes the business, the business organization changes with each business change and the actual business is planned, directed, reported, and governed.

R-pM is available today to learn, organize and manage the actual business

The recession provides the ideal time for the transition to R-pM, when business is slow and management time and resources are available. R-pM is available for use by forward-looking enterprises that want to organize the actual business for significant competitive advantage to flourish when the economy recovers. Many immediate benefits are gained by learning the business and experimenting with R-pM to be ready to organize the actual business. R-pM is applied immediately to any business change or capital development project to prevent undesirable change or mismanaged investments. [more...]

Poor corporate governance allows financial crises and large business losses

How much will corporations spend conforming to corporate governance regulations, before we realize that the whole approach to corporate governance is wrong? Corporations measure and report contrived overlaid structures, rather than the actual business. Corporations govern by enforcing policies and rules, instead of governing approved business strategies and plans. Corporations and authorities address the symptoms of the corporate governance problem from the governance side with more rules and regulations, instead of solving the problem from the corporate side, by organizing and managing the business. We are now repeating the same mistakes in response to the current financial crisis.

Good Corporate Governance manages the transition of the current business to the approved strategic business

Rule No. 6 of 21^st century management with R-pM: Plan and govern the transition from today’s value to approved strategic value. Result-performance Management (R-pM) eliminates contrived 20^th century structures that cause our corporate governance problems and organizes the business itself as one integrated structure for 21^st century management and governance. The future business is planned and approved in the strategic business structure to plan the value of strategic results and the result research, capital solution development, and strategic value creation needed. Result goals are set and managed time period by period to the strategic business. [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 financial crisis shows the confusion in business, finance, and economic management

The financial crisis causes serious concerns about the methods for business, financial, and economic management. All of a sudden, banks, financial institutions, and other enterprises realize that they do not manage their actual business and finances. We see the impact in the worldwide economic downturn. The financial crisis has shown one thing conclusively. We do not understand fundamental business, financial, and economic management problems. Efforts to date are guesswork at ways to ease the situation.

We need new solutions to business, financial, and economic management

Continual business, financial, and corporate governance problems are caused by deficient 20^th century management used today to manage the enterprise rather than the business. Economic crises occur because businesses are not managed in concert with markets, demand, supply, and coherent government policy. But, no one knows real business management. Corrective actions address conventional enterprise management, and impose more government regulation and compliance reporting on enterprises.

Now is the time to wake up to the unsolvable problems inherent in 20^th century management that lays easily-distorted contrived structures over the business, preventing actual business management.

Result-performance Management (R-pM) is the fundamental solution to business, financial, and economic management problems

Result-performance Management (R-pM) is the only way to manage the actual business as the foundation for 21^st century financial and economic management. R-pM replaces overlaid 20^th century structures with one business structure. R-pM focuses information technology on detailed business data on capital invested, economic output results produced, performance utilizing capital solutions to produce results, business descriptors, enterprises, and time periods for strategic planning for one accurate set of management information. R-pM manages finances as part of capital invested in the business. R-pM manages the actual business as part of the economy, in concert with markets, demand, supply, and government policy.

R-pM often is rejected out of hand, as not the way things are done. But, we cannot continue to manage the enterprises as has always been done. We must open our minds to understand the unsolvable problems of 20^th century management and the actual business hidden under overlaid structures. The coming recession is the ideal time to address the problem, while business is slow and the problems are fresh. [more...]

The fundamental cause of the financial crisis is the failure to organize the business in banks and other enterprises

20^th century management used by banks and other enterprises today lays a contrived enterprise organization structure over the business, instead of organizing the business. This is the fatal error of 20^th century management. If the business is not organized, the business cannot be managed. The enterprise must be managed by laying additional structures over the business. The overlaid structures prevent capture of actual business data and reporting actual business management information.

A rigid organization structure is contrived and goes out of alignment with every business change leading to the reorganization problem

The contrived organization structure follows one of many 20^th century organization theories to organize the enterprise. If the business is organized the business organization changes with each business change, and the unsolvable reorganization problem is eliminated. But, the rigid organization structure goes out of “alignment” with every new or closed result or change to a capital solution utilized. Eventually there is need for reorganization to contrive a new organization structure that is closer aligned to the actual business, and the cycle is repeated. Reorganization does not organize the business, but produces a new rigid enterprise organization structure that is laid over the actual business.

R-pM organizes the business so that the business can be planned and managed

Result-performance Management (R-pM) organizes the actual business in “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. The actual business does not consist of departments, positions, functions, reporting relationship and other contrived organization entities. The actual business consists of capital investments in the business to provide the solutions needed to produce economic output results from the business. The business structure is organized by implementing specific capital solutions to produce specific results. Business organization solutions are implemented to be responsible for sets of results. Human personnel solutions are implemented to manage each result produced. All structures laid over the business today are replaced by the organized business structure. The business structure is used for all business planning, direction, control, reporting, and governance. [more...]