How to Gain Competitive Advantage in the 21^st Century

Competitive differentiation and advantage requires a new business structure

Now is the time to take a new look at how you organize and manage your business, in order to compete in the 21^st century. In the near future, your enterprise will have to compete with companies that use Result-performance Management (R-pM) to take advantage of information technology to organize and manage the actual business. R-pM users gain competitive advantage through effective business collaboration and utilization of information technology to deliver customer value and quality. Your unorganized business, burdened by obsolete 20^th century management structures, will be at a distinct competitive disadvantage.

21^st century competitive differentiation and advantage requires utilization of technology to produce customer value and quality

20^th century management structures used by all enterprises today cannot meet 21^st century needs. Advances in information technology have made it imperative that the enterprise quickly change and adapt to serve customers and markets. Technology enables the enterprise to focus on the specific economic output and input results that form a value-quality chain from within suppliers, through the enterprise and business-partner collaboration, and on into customers’ value-quality chains. Technology has enabled changes in capital management to move from cash and accruals to the total worth of tangible and intangible assets. Technology enables us to simplify the enterprise to directly organize, plan, and manage business. Technology enables us to collaborate with partners and market our products around the world. Competitive advantage in the 21^st century goes to the company that best uses technology effectively to manage the business, manage business collaboration, and deliver customer value and quality.

20^th century management structures do not meet 21^st century needs

Management structures used today were contrived in the 19^th and 20^th century, based on the business needs and technology available at the time. Information technology was not available to manage the business, so simple organization and management structures were laid over the business. Information technology evolved, but was used to computerize overlaid structures, instead of managing the actual business. IT now makes overlaid structures ever more complex, creating costly IT overheads. The overlaid structures conflict with the business causing unsolvable problems with reorganization, alignment, intangible assets, unknown costs and value, unknown worth and investment returns, and on and on. Our organization and management structures must be reassessed to take advantage of modern technology.

Conventional thinking prevents proper definition and management of the business

The main barrier to competing effectively in the 21^st century is conventional thinking that says management improvement and new structures must be based on existing structures and methods. Management improvement books are substantiated as accurate by footnotes that prove that they are based on old thinking. New advances for competitive advantage attempt to improve structures laid over the business, which can never solve unsolvable problems. Throughout the 20^th century, conventional thinking has prevented the simple analysis of what constitutes the actual business and how should modern technology be used manage the business. Instead, we continue costly and wasteful structures that prevent solution to unsolvable problems and breakthrough competitive advantage.

Utilize information technology for breakthrough competitive differentiation and advantage with Result-performance Management

Information technology can be utilized for breakthrough competitive advantage in the 21^st century through Result-performance Management (R-pM). R-pM organizes the enterprise business as “investments in capital as solutions of worth utilized for cost-effective performance to produce value and quality in results”. The actual business consists of three components:

1. Results: Economic outputs of value and quality produced by business performance
2. Capital: Investments in specific human and other solutions of worth that are utilized in performance
3. Performance: Utilization of specific capital solutions to incur costs and be effective to produce specific results

These components are the only three that define the enterprise business. But, today these components are mixed together and defined as performance for performance management, preventing actual business management.

Result-performance Management separates results and capital from performance to organize the business for competitive advantage in the 21^st century. The enterprise business is organized as a business structure with results across columns, capital solutions down rows, and performance in a cell to deploy a specific solution to produce a specific result. Results include product, order, satisfaction confirmed, service or project or assignment completed, or other output that can be counted. Capital includes all tangible and intangible assets organized as specific solutions. Human capital includes personnel solutions utilized and capability solutions provided to produce results. The business is organized and managed using one business structure for the current business and another business structure for the strategic business to organize strategic results and capital development required. Result goals show strategic value creation by period from the current to strategic business. The current and strategic business structures are used for all business organization and management to replace organization and management structures laid over the business today.

The value and quality of customer results is managed for competitive differentiation and advantage

One competitive advantage of R-pM is the managed value and quality of results that go to the customer. The business creates value through results. Quality is an attribute of the result, not of the performance. Value must be added to results to justify improvement or development. Costs are incurred through performance. The performance cost can only be charged against the value created in the result produced. Performance effectiveness puts quality into results. Performance capacity is needed to produce a volume of results. Performance improvement or development can produce benefit only by adding value to results. The business must manage costs, value, benefits, worth, volumes, quality, risk, uncertainty, and other attributes of capital, results, and performance for competitive advantage. Capital solutions utilized in performance are managed to produce value and quality in each result in the chain of results that produce customer satisfaction and willingness to pay.

20^th century management will be a significant competitive disadvantage tomorrow

Unorganized businesses burdened by obsolete 20^th century organization and management structures can compete today because competitors are burdened with the same problems, costs, and inflexibility. But, R-pM makes obsolete organization and management structures severe competitive disadvantages. R-pM is now becoming the imperative for organizing and managing the business for competitive advantage through 21^st century management.

Move beyond conventional thinking to organize your business for competitive differentiation and advantage in the 21^st century

Move beyond conventional thinking to evaluate the competitive differentiation and advantage of utilizing information technology with R-pM to organize and manage your business. Join the R-pM community at result-performance-management.com to learn more about R-pM.