Is your Capital Worth Restricted by Conventional Thinking?

I have spent 30 years as a business change consultant and the past six years in the development of R-pM banging my head against the wall of conventional thinking, which I always found the biggest obstacle to business and management improvement. And now, we have launched Result-performance Management (R-pM), a simple innovation to organize and manage the actual business of the corporation that must break through the barriers of conventional thinking.

Conventional thinking is the biggest obstacle to business improvement

What is conventional thinking? Various on-line dictionaries do not provide a definition. Conventional wisdom is the common accepted belief or perception about a particular matter. Conventional thinking employs conventional wisdom. One dictionary defined conventional as “usual or established: using well-established methods or styles” So conventional thinking is based on well-established methods or styles.

In business change, we have the need to think outside the box. Normally, I find that people, who feel that they are thinking outside their box about a particular matter, are still thinking inside the box of conventional thinking. Thinking outside the box of conventional thinking requires questioning the fundamentals of 20^th century management methods and structures used today.

Conventional thinking dictates the academic approach to change that uses the published record or the way things have always been done as the foundation for change, and seeks to make an incremental improvement, through performance improvement books or methods. Business management schools and publishers prohibit unconventional thinking and require that all work be footnoted to ensure that it is based on conventional thinking.

Modern media allows people to absorb conventional knowledge, rather than thinking and discovering new knowledge

When developing new methods or websites, I keep hearing how people are mentally-lazy and do not want to think. They want to be spoon fed knowledge.

The modern problem is that people absorb what they know from television and the Internet, and are losing the interest and ability to think and discover new things themselves. People look up conventional solutions, rather than analyzing the problem for their own precise solution. This keeps people inside the box of conventional thinking. In also prevents people from increasing capital worth by creative thinking to improve their performance to increase the value of their results.

Conventional thinking prevents the breakthrough to meet 21^st century challenges

We also find that the enterprise must compete in the 21^st century world of advanced information and communications technology, fast change, worldwide competition and collaboration, strategic value creation, intellectual capital and application of intangible assets, supplier-enterprise-customer value chains, leveraged human capital worth and capabilities, the information environment, and all kinds of other requirements that our 20^th century management structures and methods cannot cope with. But, we cannot come up with the breakthroughs needed for 21^st century management, because of conventional thinking.

Instead of rethinking 21^st century management from the bottom up, we create new structures to lay over existing 20^th century management structures. Even business transformations, like Business Process Re-engineering, Enterprise Resource Planning, and Total Quality Management laid new structures over existing organization and management structures.

The bottom line for the 20^th century enterprise is that conventional thinking inhibits change and prevents the breakthrough needed for the transition to 21^st century management.

Need for unconventional thinking to create a new base for 21^st century conventional thinking

All that is needed to go from 20^th century management structures laid over the business to new 21^st century management is simply to organize and manage the actual business. The conventional definition of the enterprise business is “the activity of providing goods and services”. We only need to organize and manage the activity of providing goods and services. The objection to organizing and managing the activity of providing goods and services is that it has never been done that way. What is needed is just a bit of unconventional thinking to organize the activity of providing goods and services for 21st century management and replace the existing overlaid structures. Once we do this, we will have a new conventional method as a basis for improved conventional thinking in the 21st century.

Result-performance Management (R-pM) provides a new base for conventional thinking in the 21^st Century

There is a method for organizing the business for the 21^st Century Management, called Result-performance Management (R-pM). R-pM organizes the business activity of providing goods and services. The business activity is the utilization of capital in performance. The business goods and services are output results from business activity or performance. R-pM organizes the enterprise business for 21^st century management using only the three components of the business:

• Results: The economic outputs of value produced by business performance
• Capital: Investments in capital to provide the solutions of worth utilized in performance
• Performance: Specific capital solutions deployed to incur costs to produce specific results

The 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 of particular worth 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 20^th century management structures laid over the business today.

Once the actual business is simplified and organized, R-pM manages the business in three dimensions:

• Result: To create value, exceed goals and generate revenues
• Performance: To utilize capital to meet expectations, control costs, and increase profit margins
• Management: To manage by time period to develop new capital solutions and create strategic value

This is it. Everything done in the 21^st century enterprise is defined by results, capital, and performance managed over time. All organizational unit and human responsibilities are solutions deployed to produce specific results with other solutions to utilize in performance.

The biggest barrier to R-pM for 21^st Century Management in a corporation is conventional 20^th century thinking

Result-performance Management (R-PM) breaks through the barrier of conventional thinking. But R-pM must breakthrough the barrier in every corporation that uses R-pM. People will rationalize the adequacy of familiar methods. Many people, consultants, and vendors have a vested interest in protecting outmoded 20^th century management structures and methods.

21^st Century Management requires high-worth human capital to overcome conventional thinking

One important rule of R-pM is that all capital, including human capital, must be a solution of worth that is qualified to be deployed to produce value in specific results. The value of a result must exceed total performance costs for positive value-added. The worth of a solution is based on the attributable portion of result value. Human performance costs are in the utilization and consumption of human capital worth over time, so human performance costs must be restricted by human capital worth. People, who are willing to learn new ways, think of improvements, apply judgment, and make decisions, are high-worth human capital, deployed to produce high-value results that justify increased performance cost. People who just want to be told what to do and go through the motions are low-worth capital deployed to low-value repetitive results.

Becoming human capital of high-worth means opening the mind to new methods or styles and developing and applying high-worth capabilities to produce high value-quality results. The acceptance of R-pM requires those few high-worth people who understand the breakthrough value of R-pM to take the lead and leverage their own human capital worth through R-pM.

If you think you can get past conventional thinking and develop as high-worth human capital, study Result-performance Management at result-performance-management.com and learn how your enterprise can organize the business for 21^st Century Management, and leave 20^th century management problems behind.