The conventional enterprise has never managed results because results and performance are confused
A Business Change Forum article on April 12, 2006, discussed how we managed for results but never managed results. We have never managed results, because we have always confused results and performance, by defining both entities as performance. If we define results as performance, we can never separate the performance and the result produced from performance to be managed separately.
Results must be defined separate from performance
We can eliminate this problem by defining the entities involved:
- Result: A specifically-identified and described economic output produced by an enterprise
- Performance Capital: Invested capital organized into specific performance solutions
- Performance Solution: A specifically-identified and described solution in performance capital that can be deployed as one whole to produce one or more specific results
- Performance: Utilizing specific performance solutions deployed to produce value in specific results
Then, performance is the link between capital and results.
Results are economic outputs of value produced by the business
Results are the outputs of value we produce to execute a strategy and survive as an enterprise. The result is the fundamental element of economic output from the performance of the enterprise. Results are produced within the enterprise. Historically, results have been defined as economic indicators that reside outside the enterprise. This definition also has prevented the enterprise from identifying and managing internal results.
Some results are managed now as separate entities
We do manage a few results now, as separate entities, such as material received from supplier, products, sales, revenues, and profits. But we have never managed the result as an entity, in order to manage the basic economic outputs across the enterprise. Everyone in the enterprise must produce results of value that cover their own performance costs and the costs of the solutions that they utilize.
Results are the building blocks for the enterprise
By defining the basic elements of economic output in the result, we create the building blocks of the enterprise. The results contain the value created in the enterprise. By organizing and managing results, the enterprise is best able to define and manage the creation of value. Value is no longer something that appears at a customer or is reflected in revenues. Value is managed from the point that is created and built up result by result to execute a strategy.
Most results are related to other results
Our results do not just happen in isolation. One result may be needed before another result can be produced. Some of our results are transformed by performance. The output result from one session of performance is an input result to another session. Each session should add value to the result as part of the transformation. This enables us to create result value-chains, to manage the transformation of input results received by the enterprise to output results that are input into the customer result value chain.
We must manage results, both to reach personal goals, and as the goals of the enterprise
We have always understood the importance of producing results. But results were personal objectives rather than defined, measured, and managed enterprise output. In order to manage the enterprise properly, we must organize and manage the result: the basic element of economic output.
The Ten Rules for 21st Century Management require that results be managed
A recent article discussed the Ten Rules for 21st Century Management. Rule 2, “Generate revenues from a chain of known value”; Rule 4, “Keep records on the full cycle of cost and value in development and operations”; Rule 6, “Plan and manage the path from today’s value to approved strategic value”; and other rules require that the enterprise manage results and the value of results. The value-added in 21st Century Management comes from organizing and managing results.
Result-performance Management is the first means to organize and manage results
Today any enterprise can gain significant advantage by knowing the results it must produced, having goals and responsibilities for each result, and focusing on producing results. Result-performance Management (R-pM) provides the structures and guidance to identify and describe results, organize results, and manage the value-quality of results.
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.
