20^th century business definitions are confusing and imprecise

What is your definition of an "enterprise" or the "business"? How do you or your performance management methods define "performance"? How do you define "result"?

Precise definitions are needed to organize and manage the business of the enterprise properly. Current definitions of performance mix performance activity together with output results and report and manage both as "performance". Current usage of the term "result" is as economic outputs that leave the enterprise.

The definition of the business conflicts with the definition of performance and results

Yet, the generally-accepted definition of the enterprise business as "the activity of providing goods and services" indicates that the enterprise business has two components:

• The performance component in business activity
• The result component in the goods, and services provided

20^th century management is unable to organize and manage the two components of the business because performance and results are mixed together and managed as performance.

R-pM precisely defines business, performance, and results for 21^st Century Management

Properly defining "performance" and "result" and then separating results from performance are the first steps to organizing the enterprise business for 21^st Century Management [more...]

20^th century management cannot optimize operations in the performance solutions that produce output results

The 20^th century business is not organized. Therefore, operations in the capital utilized as specific performance solutions to produce specific output results cannot be managed. If operations are not managed performance cannot be optimized to produce high-quality results and the result value-added that contributes to the profit result.

Rule No. 5 for 21^st Century Management "Operate to optimize operations, result value-added, and the profit result"

The ten rules for 21^st Century Management help each enterprise to understand how well positioned they are to compete with the coming 21^st century enterprise. Rule No 5: "Operate to optimize operations, result value-added, and the profit result" establishes an enterprise routine of managing performance solutions, managing the results produced, and managing the return on investment and contribution to profits over time.

R-pM manages cost-effective performance to produce value-quality results and profits

Performance is managed to capture the cost of development or improvement, meet expectations in performance, integrate with other solutions of the same class for the same result, and manage the cost, effectiveness, capacity, and uncertainty of each solution.

Results are managed to utilize integrated solutions to reach result goals, to create result value greater than total performance costs for result value-added, to produce a high-quality result, to produce the expected volume of results on time, and manage the risk of a poor result.

Results are managed against performance as the routine, High-value results are periodically optimized by managing the volume, value, quality, goals, and risk of results by optimizing the capacity, cost, effectiveness, expectations, and uncertainty of the performance solutions that produce the result. Optimizing ensures that performance is cost-effective to produce high value-quality results to return investments in performance solutions, and provide the result value-added that contributes to the profit result [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...]

Today's business enterprise uses a myriad of management structures and information systems creating enormous information complexity. Each structure and system defines its own set of data entities and reports separate information. Enterprise management information systems attempt to reconcile data and integrate information into meaningful reports for management. But, no system today captures actual business data and no management information system reports actual business management information.

Result-performance Management (R-pM) organizes the business for 21^st Century Management. The one integrated business structure is used for a comprehensive and consistent Result-performance Management System to capture data on the utilization of capital in performance solutions to produce economic outputs in business results. Data is captured on performance capacity, cost, and effectiveness and the volume, value, and quality of results produced. Strategic results and the solutions needed are maintained in the strategic business structure with plans for time periods and updated strategic estimates. Complete and comprehensive management information is reported on the actual business for effective 21^st Century Management and good corporate governance. [more...]

The 20^th century definition of performance used in business management defines not only the activity of performance but also the output results produced as performance.

The impact of this definition is that the actions of performance and the results produced by performance are mixed together in business performance management methods. The definition of performance prevents the 20^th century enterprise from organizing the business. Organization structures are laid over the business and require periodic reorganizations to align with the business.

The generally accepted definition of business is "the activity of providing goods and services". The definition shows that the business has two components:

1. "The activity of providing", which is performance in the utilization of human and other capital, such as equipment, supplies, processes, and tactics
2. "The goods and services provided", which are the outputs or results produced from performance that can be counted and measured

The definition of business shows that results must be separated from performance in order to organize directly the only two entities that describe the business:

1. The performance solutions that provide the capital utilized by the business to incur costs and produce the results
2. The results produced as economic outputs to create value from the business

R-pM organizes results produced and performance that produces results into one integrated business structure to gain advantages not possible with 20^th century organization structures laid over the business that prevent actual business management. [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...]

The modern enterprise creates knowledge by subjects or topics that are important for the application of knowledge. Knowledge users access knowledge when they think they have a need. The objective is to make knowledge available.

R-pM creates and manages knowledge as human capital to develop and support human capabilities to utilize other performance solutions and to produce specific results. R-pM integrates knowledge with other information capital to be delivered where needed to utilize solutions and produce value in results. [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...]

Many of the ten rules for 21st century management require that the enterprise manage performance costs and result value. The 20th century enterprise and conventional cost accounting and management methods capture "known costs" for various entities and then charge the costs to a contrived center, process, object, or activity and not against the value created. The 20th century enterprise is not organized to determine performance costs and result value.

In order to manage performance costs and result value the enterprise must organize the business for 21st century management. The enterprise cannot know and manage performance costs unless performance solutions are organized and managed. The enterprise cannot know and manage result value unless results are organized and managed. The enterprise cannot know and manage result value-added as a metric to optimize operations and the return on capital development investments, unless performance costs are managed against the result value created. [more...]

The word performance used in business management is defined to include not only the activity of performance, but also the results produced in goods and services and other economic outputs. This definition prevents the performance management structures, key performance indicators, business processes and other structures, we overlay on the business, from managing the results of performance separate from the activity of performance.

The definition conflicts with the definition of business in an enterprise as "the activity of providing goods and services", so we overlay organization and other structures on the business, rather than organizing and managing the business [more...]