Enterprises must acquire or develop new capital to expand or improve business results
Every business enterprise must produce output results that lead to goods and service results to create value. An expanding enterprise must produce new results of increasing value. The enterprise needs additional capital in order to produce new results as part of the business. The capital must be acquired or developed, implemented as specific performance solutions, and then utilized to produce improved or new results of increased value. The value added to new business results must justify the capital expenditure to acquire or develop needed solutions and provide the return on investment.
Capital development is really result-capital development, the development of capital to be utilized as performance solutions in the enterprise business to produce economic output results, such as products and services, managed and supported capital, completed campaign or project, developed human capability, etc. In order to manage result-performance development, the enterprise must manage the business in the capital utilized as performance solutions and the results produced. The capital being developed, must be developed as specific individual performance solutions to produce specific results as part of the future business.
Even physical capital development, like a new building, produces performance solutions to produce results, be it the enterprise office facility solution or a facility solution to produce lease or rental income results.
Result-capital development develops business solutions to add value to business results
Result-capital development develops specific performance solutions needed by the business to produce specific results of value. Therefore, the enterprise first must manage the business in order to plan and manage capital development. The justification or return on investment comes from developing specific performance solutions to add value to existing or new results produced by the enterprise business.
Result-capital development must be part of normal business operations. Every result manager has both operation and development responsibilities. Result-capital development must arise from business operations in result requirements and performance solution specifications, move into development to develop and implement performance solutions and new or improved results, and move back into operations to utilize performance solutions to produce higher-value results and gain the return on investment. Result-capital development is then one Result-performance Operations and Development continuum using 21st Century Management.
20th century management cannot manage capital development as part of the business
20th century management does not manage the enterprise business. Results that need to be produced across the business are not defined or managed as a set. This prevents planning and management of specific result value. Capital is not defined as performance solutions that are utilized to produce results. Most capital is unknown or “intangible” and tangible capital is administered as an asset, rather than managed as a solution. This prevents management of specific development and performance costs.
20th century capital development cannot develop the business, so it is an erratic exercise separated from the business that uses various 20th century project management structures. Some people from the business may be assigned to projects, but usually view capital development as separate from normal business responsibilities. Typical development develops assets or simply a project outcome to produce some estimated benefit. Implementation lays a new structure over the business, which is often resisted by those who must use the new structure. Benefits come from the extraordinary efforts of people to get the new structure to work. 20th century project management can not integrate undefined new and existing performance solutions to add value to undefined results to improve the business as part of routine operations.
Result-capital development arises from the business requirements to improve results or produce new results
Result-capital development is initiated by result symptoms in missing or deficient results. This leads to requirements for new and improved results. Performance solutions are reviewed to define the problems preventing required results. Performance solution specifications are prepared to meet analyzed and refined result requirements. Solutions are defined by professionals for each category of business, human, facility, and management capital. The result-capital development project is planned to develop the specific performance solutions needed to produce new results. Removing result symptoms provides the value and benefits of the investment. Developing performance solutions incurs the cost of the investment.
Therefore, to plan capital development the enterprise must know the specific new and improved results to be produced. The value that is created or increased over a time period must be itemized and totaled to show the value that can be created for the investment return. The specific performance solutions that must be developed to produce the results must be defined to itemize the costs of development and future operation or performance costs of the solutions. Performance solutions include the business and system process, human capabilities and knowledge, equipment and infrastructure facilities, management strategies and tactics, and information solutions needed to produce a high value-quality result. Performance solutions are designed to produce specific results, result by result, along a result chain.
The new result value created can be totaled over the projected payback period. This should exceed the cost of operations to provide a value-added that can be compared to the result value-added with no development. The added value-added to existing and new results over the payback period must provide the return to justify the investment. The new value-added expected after development is backed up by new result goals accepted by result managers to substantiate the development.
Result-capital development projects have their own business structure
Each result-capital development project is its own business with a set of results to produce and a set of performance solutions to utilize. The project business structure supports investment management results in the enterprise business structure.
Every performance solution with the business results to be developed is organized as a result in the project business structure. Capital, external assistance, and expenditures assigned to the project are organized as project performance solutions. Project management manages the utilization of project solutions to produce project results. Performance solution costs are captured against specific project results. This provides the means to capture acquisition and development costs, to establish each result and performance solution as a business data entity, to document each solution and new business result completely, and to create the knowledge solutions to utilize new solutions to produce new business results properly.
Human capital assigned to the project normally is organized in result teams to develop new results and in performance teams to develop new solutions. Team members include those who will utilize and support the new solutions in operation.
New performance solutions developed as project results are implemented as performance solutions to produce the new or improved business results. The solution acquisition and development cost provides the assumed capital worth of the solution and the unamortized balance that can be amortized against the results produced over the payback period.
Implemented project solutions are utilized to produce planned result value
Users have been involved in the whole operation-development continuum and have accepted result goals to utilize new solutions to produce result value-added. Users are supported by professionals for each category of capital utilized to solve implementation problems. New solution development to improve or enable results is part of the business routine. Result value and performance costs are captured in the general ledger system to know added result value-added over expected value-added with no investment, to manage the specific return on investment for each solution.
R-pM manage result-capital development properly to achieve planned returns
Result-performance Management (R-pM) organizes the business for 21st Century Management. R-pM provides the Result-performance Operation and Development continuum to manage the full cycle of result and capital development to produce planned and managed result value-added return on investment.
R-pM is the only way to manage any result-capital development properly, even if R-pM is not utilized to organize the business. The download “How to Manage Projects in the 21st Century” describes result-performance development and proper development project management. Full R-pM learning, procedures, and case examples are provided in the R-pM Toolkit, your 21st Century Management Manual.
