Governments are lost in devising measures to address the economic crisis

Governments are trying many measures to address the economic crisis. But, we can see that governments are unsure of measures to take, and that measures taken have no positive effect. One measure that no government has tried is to eliminate the actual problem that caused the crisis. That problem is the failure of all financial institutions, corporations, government agencies, and other enterprises to manage the actual business.

It is time to wake up to the failures of corporate management methods used today

The economic crisis shows the problems inherent in dead-end 20^th century management still propagated today by all business schools, business management books, and on-the-job experience. 20^th century management does not manage the business, but lays organization and management structures over the business. Actual business data in value and quality created, costs and effectiveness of performance, value-added across the business, capital worth (asset value), return on investments, and many other measures are unknown. Problems fester in the business hidden by structures laid over the business until they finally burst as sudden losses and failures.

Business management is the one solution to the economic crisis

The new structure needed for financial, corporate, and economic management has always existed. That structure is the business. Business management to organize and manage the actual business is the only solution available in the world to prevent problems within businesses, understand and manage financial solutions, report accurate accounting and business management information, consolidate businesses of a corporation, ensure good corporate governance, report actual business information to regulatory agencies, and provide government information for proper economic management. [more...]

The economic crisis shows the confusion in business, finance, and economic management

The economic 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 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 a new solution to business, corporation, 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.

Business management is the fundamental solution to business, financial, and economic management problems

Business management is the only way to manage the actual business as the foundation for 21^st century corporate, financial, and economic management. Business management replaces overlaid 20^th century structures with one business structure. Information technology focuses 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. Corporations are managed as consolidations of corporate businesses. Finances are managed as part of capital invested in the business. The actual business is manage and consolidated as part of the economy, in concert with markets, demand, supply, and government policy.

We must open our minds to the new business management solution needed

Business management often is rejected, as not the way things are done. But, we cannot continue to manage the enterprise as has always been done. We must open our minds to unsolvable 20^th century management problems and expose the actual business hidden under overlaid structures. The current recession is the ideal time to address the problem, while business is slow, capital solutions are under-utilized, the problems are fresh, and new solutions are being sought. [more...]

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

20^th century management used by banks,corporations, 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 and change management 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.

The solution is to organize the actual business so that the business can be planned and managed

Real business management 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 one organized business structure. [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...]

Performance management today mixes capital utilized, performance, and results accomplished together

Performance management is a popular form of 20^th century enterprise management. But performance management mixes the capital utilized, the performance in the utilization of capital, and the results produced together. This prevents real business management to manage the utilization of specific measured capital solutions, in measured specific actions of performance, to produce specific measured results. Performance indicators do not distinguish capital solutions, solution performance, and results produced.

R-pM separates capital solutions, performance, and results to manage the business

The business is defined as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. In order to manage the business, capital solutions, solution performance, and results produced must be managed as separate components of the business. Capital solutions are qualified to produce specific results before being acquired and implemented. Capital solutions are planned with the potential to produce results and measured through capital measures. Performance is the utilization of a specific solution to produce a result. Performance is planned through a level of expectation and measured through performance indicators. Results are planned to produce a volume or count of results of value through result goals and measured through result metrics. This enables all components of the business to be measured and managed as separate entities in business performance in order to manage the actual business. [more...]

Corporations today are not able to manage the business causing the economic crisis

All business managers are familiar with such 20^th century management problems as unknown costs, unknown value and quality chains, unknown investment amounts and return in specific capital items, unknown capital worth (asset value), intangible assets, inaccurate and missing management information, and on an on. These unsolvable problems are symptoms of the one corporate management problem that caused the economic crisis; the failure to manage the corporate business. Corporations today do not have the management information or tools to solve the problems and prevent future problems. The various corporate businesses cannot be consolidated into one corporation business.

Government responses to the economic crisis do not address the one fundamental problem

Governments and "experts" propose solutions to the economic crisis that are the usual economic recovery, corporate rescue, and added regulation. No one is trying to identify and solve the fundamental problem in order to prevent recurrence. Measures proposed encourage corporations to proceed as usual, and not take the needed steps to manage the corporate businesses to gain significant competitive advantage and to prevent the problems that will lead to future economic crisis.

R-pM is the only solution for effective corporate business management

Result-performance Management (R-pM) is the only method available to consolidate and manage the corporation business. R-pM organizes and manages each part of the corporation as a business. Businesses at a lower-level add into the businesses at a higher-level until the corporation is managed as one business with one complete, accurate, and transparent business structure. All 20^th century management structures laid over corporate businesses at all levels and the related unsolvable problems are left behind. [more...]

Capital investments today are not managed as specific solutions to produce business results

20^th century management employed by all enterprises today does not identify specific capital solutions as an entity to be defined, measured, or managed. Some obvious capital assets like employees, fixed assets, and money are identified and managed as separate assets. Many high worth assets are never defined or are labeled as "intangible assets". The full amount invested in capital solutions, the decline in solution worth producing performance costs to amortize the investment, the return on investment in the solution, and the current capital worth or "asset value" of the solutions are unknown. Unknown and unmanaged capital is a major contributor to financial losses that led to the current economic recession.

Result-performance Management manages all capital investments in the business

Result-performance Management (R-pM) identifies all capital investments as specific solutions intended to produce specific results. The full scope of solutions needed to produce a result are defined, with the qualifications needed for each solution. The expected result value increase with the investment is planned and must exceed the development and implementation costs to justify the investment. Result value is attributed to solutions utilized by the contribution of the solutions to producing a good result. The attributed result value for each solution over its expected life and disposal is the planned solution worth that must cover the solution investment.

Capital solution performance to produce results and result value-added is measured and managed

Each capital solution is implemented to produce one or more results in performance. The solution worth declines as the solution deteriorates or becomes outdated. The decline generates performance costs that are spread across the results that utilize the solution. Utilization of the solution also creates result value that leads to customer revenues. The portion attributed to the solution covers the solution costs and provides the gain or loss for the return on investment in the solution. The expected future attributed result-value to cover the costs and gain in the solution over the remaining life, plus solution sale or disposal result value is the current solution worth, which must exceed the unamortized investment balance. These capital measures largely are unknown today, but are important for the proper management of the business and prevention of financial, capital, and economic problems. [more...]

The experts show their ignorance of real problems and solutions to the economic crisis

The World Economic Forum just concluded in Davos, Switzerland. The many speeches, interviews, and panel discussions did not show anyone who knew the real problems in financial institution, corporate, financial, and economic management that caused the current economic recession. There were discussions of the obvious symptoms in the poorly-defined and managed financial products, the credit freeze, greed, ineffective management structures and systems, ineffective regulation, ill-informed management, lack of transparency, lack of leadership and coordinated government responses, etc. Many pointed out the need for new management structures, new multilateral regulation and management mechanisms, and improved governance. But there was no awareness of the fundamental problem and the real solution needed.

All the symptoms discussed at the World Economic Forum arise from one problem; the failure to manage the business

Every symptom, root cause, and problem are really outgrowths of one problem: the failure of financial institutions, corporations, and governments to manage the business. The problem is built into the existing 20^th century management structures used to manage enterprises today that prevent actual business management. The new structure or system needed is simple business management. The business must be organized, planned, directed, accounted for and controlled, reported, and governed. The actual business is transparent, and when reported management and the board have the information to prevent problems, carry out their responsibilities, and exercise good governance.

21^st century business management is the answer to prevent future economic crisis

The only way to manage the real business is provided in Result-performance Management (R-pM) knowledge, as explained in many articles in 21^st Century Management Magazine. 21^st century business management replaces 20^th century enterprise management structures laid over the business with one business structure to manage business results, business performance, and the capital utilized as solutions by the business. The current business structure and progress is managed by time period against result goals and performance expectations to the strategic business. Business management eliminates all the unsolvable problems of 20^th century enterprise management that were discussed at the World Economic Forum. Business management provides a new structure for corporation, industry, market, finance, and economic management based on managed businesses. [more...]

Economic output results produced by the business today are not managed or are managed as an isolated entity

20^th century management employed by all enterprises today does not define economic output results as an entity to be defined, measured, or managed. Most results produced by the business are never defined or managed. Some important recurring results are identified and managed as an isolated entity such as an order, a service rendered, a payment received, etc. Results produced across the chain to produce the managed entity are not identified or managed.

Result-performance Management manages all results produced by the business

Results are outputs that can be counted and measured. Results contain enterprise value, quality, costs, risk, value-added, and other metrics that are unknown today. Results provide the important outputs that must be produced to meet business objectives and achieve business success. Result-performance Management (R-pM) focuses the enterprise on producing results and on managing the business result by result, and achieving result goals period by period.

Capital solutions utilized in performance are measured and managed for each result

Each result is produced by utilizing implemented capital solutions in performance to incur costs and create value and quality. Every result has a customer who must be willing to pay a value to receive the result. The total result value of each result in a chain cannot exceed the final result value paid by the external customer. The result value less the total performance cost for the volume of results produced is the result value-added, which must be positive to justify producing the result. Result value-added is the main management metric of 21^st Century Management. [more...]

20^th century management used today cannot plan the business

Since the business today is not organized or managed, the business cannot be planned. The enterprise is planned through strategic maps, corporate plans, IT, financial, human resource and other functional plans, and budgets that are laid over the business. The planning structures use different terminology, and often do not relate to each other or to management and reporting structures used to manage the business.

R-pM plans the actual business in a strategic business structure in 2-5 years

Result-performance Management plans results of a value that a customer is willing to pay that must be produced by a particular time. Capital is planned for solution investments needed and costs to produce each specific result giving result value-added. Time periods are planned to produce results that are needed for business success. Result value-added is planned to ensure "the bang for the buck" and profitability.

Future results are researched to determine customer needs and preferences, and to design results. Capital development is planned to produce specific results of added value-added for the investment return. The business is planned in a strategic business structure at a selected horizon in 2-5 years. Result goals and performance expectations are planned by period from the base business to the strategic business.

Responsible managers learn results and capital solutions to plan results, performance, and management over time

As experience is gained, business planning becomes more precise and reliable. All responsible managers learn their results and capital solution performance in order to professionally determine future result value and capital solution needs. The planned period by period business provides a clear view for managing progress to achieve future results. This enables managed course correction and lets all see their part in strategic result value creation. R-pM is the only way to manage planned strategic result value creation and result value-added time period by period starting from the base period. [more...]