Performance utilizes capital to produce economic output results
20th century management does not precisely define performance. Performance mixes capital utilized in the execution of actions with the results accomplished. Actual business performance utilizes capital as specific performance solutions in the execution of actions to produce specific results. Capital, results, and performance are separate entities. Performance incurs costs in the deterioration or consumption of performance solutions utilized and creates value in the desirability of results produced. Performance solutions provide the capacity to produce a volume of results. Performance effectiveness affects the quality of results produced.
Conventional enterprises do not manage capital in development or in utilization by the business
Capital is developed and implemented as performance solutions through enterprise investments. In most enterprises, capital is lumped together as an asset or project in development. Capital is not organized as specific items called performance solutions that are utilized by the business. Capital is mixed together across organizations in business processes, information systems and administrative functions, making it difficult to manage, deploy, and utilize. Performance solutions are not managed as defined solutions for costing and gaining the return on investment. Many performance solutions are never defined or are labeled as intangible assets. Tangible capital is lumped together as an asset and administered to depreciate it against against a center and to keep it operating. Capital is not identified as specific performance solutions to be managed in performance to incur costs, to be utilized effectively, and to create value and quality in specific results.
R-pM organizes capital to be managed and to be utilized to produce results
R-pM identifies and mobilizes enterprise capital including both tangible and intangible assets. Capital is organized by category to apply the professional capabilities needed to manage and support the capital. The same capital also is organized by class so that it can be integrated and utilized in operation to achieve results. This produces specific performance solutions that comprise the capital structure as part of the enterprise business structure.
R-pM organizes Capital by Category to be managed and supported
Capital is employed in four categories: business, human, facility, and management capital. Each capital category requires special skills and experience to manage.
- Business Capital: the practices, methods, result organization units, roles, result-performance business structures, relationships, brands, systems, and data that directly produce a result. Business capital requires business knowledge and analysis skills
- Human Capital: the individuals, competencies, knowledge, learning, intellectual capital, rewards, incentives, and motivation methods that operate the enterprise. Human capital requires human handling and development skills
- Facility Capital: the land, plant, offices, machines, networks, software, money, supplies, utilities, accounts, intellectual property, documents, and records that enable the enterprise. Facility capital requires asset and technology administration and maintenance expertise.
- Management Capital: the vision, strategies, policies, plans, directives, scenarios, information, intelligence, and actions that lead the enterprise. Management capital requires management analysis and research skills
Capital is managed to operate, support, improve. and develop performance solutions. Performance is managed to provide qualified performance solutions to produce results.
The exhibit shows enterprise capital defined as specific performance solutions for support and utilization. The solutions are organized in the capital structure to be available for deployment to produce specific results.
R-pM organizes Capital by Class to be integrated to produce results
Capital within each category is organized by capital class to give twelve solution types in the performance structure. There are three capital classes:
- Readiness Class: Capital that must be in place to be ready to perform, including business organization, human personnel, facility equipment, and management strategy
- Production Class: Capital utilized during performance, including business process, human capability, facility supply, and management tactics
- Information Class: Capital that provides information and documents results, including business data, human knowledge, facility records, and management intelligence
Capital Class describes the way capital is employed in practice and the solution types that must be integrated by class to produce results.
R-pM definess capital utilized together to produce a set of results as performance modules
Organized capital is defined as performance modules to manage the capital in a result business organization unit, for easy deployment to a new result, and for replication to define capital needed for a similar result set. Performance modules are normally set up for a result organization unit solution to be utilized for the results the unit is deployed to produce. Performance modules contain a set of solutions covering all categories and classes. This enables new results to utilize the same capital as existing results and the capital utilized for a result set to be copied for a similar new result set. Modules are deployed to the new result and modified as needed to facilitate management of new results.
Capital is deployed from the capital structure to be utilized in the performance structure
The capital structure organizes the capital investments made by the enterprise to have specific performance solutions available to the business to be utilized when needed to produce business results. Capital management manages the development, operation, and support of the performance solutions in the capital structure. In order to manage utilization of capital in performance, specific performance solutions are deployed from the capital structure to the performance structure to associate the solution with the results the solution is to produce. Rules and exceptions for costing, capacity, and effectiveness determination are set up in the performance structure.
The exhibit shows specific performance solutions that are deployed from the capital structure to the performance structure to be utilized together to produce a specific result. Business solutions deployed are utilized in business performance, human solutions manage and produce the result in human performance, etc. The capacity of the solution limits result volumes. The performance costs incurred in utilizing the solutions add up to the total result cost. The result value less total performance costs is the result value-added. Each solutions utilized is managed to be effective to produce a high-quality result.
The R-pM Toolkit covers capital organization, management, modules, and utilization to produce results
The R-pM Toolkit details the capital and performance solutions used to achieve results and shows how to plan and integrate performance solutions. The R-pM Toolkit shows how to convert routine administration into effective capital and performance management.
Visit Result-performance-Management.com to learn more about organizing your business with R-pM for 21st Century Management, and the R-pM Toolkit, your 21st Century Management Manual.
