Principles for Competitive Differentiation and Advantage

Competitive differentiation and advantage requires an actual business structure

Now is the time to take a new look at how you organize and manage your business enterprise, in order to compete in the 21^st century. In the near future, your enterprise will have to compete with companies that take advantage of information technology to organize and manage the actual business. Managed businesses gain competitive advantage through effective business collaboration, development of specific capital needed to increase result value-quality, cost reduction to the essential costs to produce results, and utilization of information technology to deliver customer value and quality.

All 20^th century management problems in change management, intangible assets, unknown capital development, unknown performance costs, unknown result value and value-added, unknown capital worth and investment returns, corporate governance, and on and on are left behind. 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 input and output 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 the 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.

Utilize information technology for breakthrough competitive differentiation and advantage

Information technology is utilized for breakthrough competitive advantage in 21^st century business management. The enterprise business is “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 Domains: 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 not defined or managed. Known results and capital utilized are mixed together and defined as performance for performance management, preventing actual business management.

21^st century business management separates results and capital from performance to organize the business for competitive advantage. The enterprise business is organized as a business structure with results across columns, capital solutions down rows, and performance domains in cells where a specific solution is implemented 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 the managed business 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 utilization of specific capital solutions in performance. The performance cost can only be charged against the value created in the result produced. Result value less total performance costs is result value-added which is managed to be positive across result value-quality chains and the business.

Performance effectiveness puts quality into results. Capital solution capacity is utilized to produce a volume of results. Performance improvement or capital 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 the final result value.

Businesss management provides a strong foundation for competitive differentiation and advantage

Business management provides many significant competitive advantages in the 21^st century by managing all results produced and all solutions utilized in performance, in both operations and development over time by period to create strategic value:

• The business is dynamic to change results, capital solutions, and solution deployment for performance quickly and reorganize naturally with each change
• All in the enterprise know their role in terms of results and goals and performance and expectations
• Personnel are human capital solutions of assessed worth, who continually increase capabilities to produce higher-value results
• Personnel understand that their capabilities are solutions utilized in a result value-quality chain, and that poor performance produces a low value-quality result that affects a chain of results
• Personnel understand the relationship between the cost, effectiveness, capacity utilization, and uncertainty of performance and the value, quality, volume, and risk in the results they produce
• Managers and professionals are deployed to results that are organized to employ their capabilities, and they are supported by professionals deployed for each category of solution that they utilize
• The business is managed separately for results, in the value and quality of each result utilizing solutions, and managed for performance, so that each solution is cost-effective for every result
• The business is simplified to planning and reporting only results, capital solutions, performance, and related enterprises over time by period, providing one integrated management information solution
• Capital investment is justified by itemized result value added and substantiated by future result value-added goals
• Capital development develops both results to provide value-added benefit and capital to capture development costs and implement solutions to create result value and measure investment return
• The enterprise strategy defines strategic result value to be created and governance ensures the transformation from current result value to strategic result value
• Current and strategic business structures are used for all organization, planning, direction, control, and reporting showing the inaccuracies and contradictions in replaced structures
• An efficient and effective 21^st century business is created by standardizing capital and costs and gaining competitive differentiation and advantage in the value-quality of customer results
• The business integrates with suppliers and customers who also manage their businesses to maximize shared value-added
• The business collaborates with other 21^st century businesses by re-linking chains, since results and capital solutions are defined consistently and performance costs are standardized

Organize your business for 21^st century management to instill a new business management outlook and gain breakthrough competitive advantages not possible today with obsolete 20^th century enterprise management.

Result-performance Management (R-pM) provides the knowledge for actual business management

Result-performance Management (R-pM) is the only source of knowledge and expertise on how to manage the actual business. Forward-looking enterprises are now using R-pM guidance to organize and manage their business to gain breakthrough advantages over competitors burdened by unsolvable 20^th century management problems. Business management is explained and documented in the Business Management Toolkit. The Toolkit provides procedures for actual business management and maintains emerging 21^st century management conventions, definitions, and standards. Management consultants who base 21^st century business management services on R-pM knowledge are licensed to help enterprises learn, organize, and manage the actual business. R-pM and business management are supported at result-performance-management.com.

The Solution to the Economic Crisis is explained in free downloads

Three free white papers explain the dead-end 20^th century management problems, such as the failure to plan, account for, and manage the actual business, that caused the economic crisis, the way to eliminate the problems, and a government program to address the crisis by stimulating the economy, solving the problems, building a structure for financial and economic management, and organizing local businesses to flourish in the eventual recovery.

• How to Eliminate Problems that caused the Economic Crisis explains the major unsolvable 20^th century management problems and the solution to eliminate the problems
• Business management; the only Solution to the Economic Crisis explains how to plan and manage the business to capture business data and provide management the information needed for actual business, corporation, industry, and economic management
• A Government Business Management Program to Answer the Economic Crisis outlines a government program to encourage business management, stimulate the economy, restore confidence, organize businesses to flourish in the recovery, and manage economic cycles to prevent future crisis

These three white paper downloads are available to R-pM Community Members at result-performance-management.com. There is no cost or obligation to join the R-pM Community. Join by entering your email address and personal password. Your email address is protected and used only for download problems, product updates, and occasional R-pM Member news and white papers.