Rule No. 1: Organize and Manage the Business

Rule No. 1 for 21^st century business management: Organize and Manage the Business

The 20^th century enterprise organizes units, functions, positions, reporting relationships, and other arbitrarily defined entities to produce an enterprise organization structure. Enterprises have never organized or managed the business creating unsolvable problems that can be eliminated only by organizing the business for 21^st century business management.

The enterprise business is the activity of providing goods and services

Perhaps when you read the title to this article you thought “my company already organizes and manages the business”. Most people think that the 20^th century organization and management structures used today actually organize and manage the business. But, the common 20^th century definition of the business enterprise is the activity of providing goods and services. Therefore, the activity of providing goods and services must be organized in order to organize the business. Does your company organize the activity of providing goods and services?

20^th century enterprise management contrives organization units and structures

Follow this rule to avoid the fatal error of 20^th century management: laying an organization structure over the business. instead of organizing the business. The rigid contrived organization structure organizes the enterprise and prevents the business from being managed.

20^th century organization theories produce a contrived “enterprise organization structure” that is laid over the business. The business must change continually, while the “enterprise organization structure” remains rigid, creating conflicts with the business and pressure for reorganization to contrive a new “enterprise organization structure” that is aligned closer to the actual business. But the business is still not managed, unsolvable problems remain, and the cycle is repeated.

If the business is not organized the business cannot be managed

The problem is that once the enterprise organization structure is implemented over the business, the enterprise is doomed to unsolvable 20^th century problems. The enterprise business, the activity of providing goods and services, has never been organized, so the business activities are not organized as a set and the business goods and services are not organized as a set. This prevents the business from being managed.

The enterprise, rather than the business, ls managed through contrived enterprise management structures that also are laid over the business for strategic planning, business processing, performance management, accounting, management information, administration, and other management needs. Each overlaid structure defines it own set of enterprise management entities like function, job, center, activity, station, work flow, process, responsibility, account, etc. which must be reconciled and managed. Management planning, accounting, and reporting is against overlaid structures rather than the actual business, creating inaccurate. conflicting, and incomplete information along with information complexity.

The business must continually change while overlaid structures are rigid producing unsolvable problems

There is continual conflict between the ever changing business and rigid overlaid structures producing the unsolvable 20^th century organization and management problems like reorganizations, financial accounting, corporate governance, value creation and management, intangible assets and unknown costs, managing benefits of investments and capital development, alignment, and on and on.

These problems are unsolvable because they cannot be solved by improving existing structures or laying additional structures over the business.

20^th century problems must be eliminated by organizing the business into a business structure

The only option for the enterprise to eliminate 20^th century problems is to organize and manage the business, the activity of providing goods and services. Business activity utilizes enterprise capital, which must be organized as specific capital solutions. Business goods and services are economic outputs that must be organized and specific results produced from business activity. The utilization of a capital solution to produce a result must be organized as a performance domain to capture data on business activity. From this we can come to a precise definition of the business as “investments in capital as solutions of worth utilized for cost and effectiveness of performance to produce value and quality in results”.

Every enterprise has a business structure, like a spreadsheet that shows the results produced in the columns and capital solutions utilized to produce results in rows down the left. The business structure allows the business to be organized by implementing specific capital solutions into performance domains to produce specific results and to be reorganized by changing results produced or solutions utilized. Once the business is organized for 21^st century management, the business organization changes with business change eliminating the unsolvable reorganization problem and other unsolvable 20^th century management problems.

Once the business is organized the business structure is used for 21^st century business management

The same business structure that organizes capital, results, and performance domains is used for 21^st century business management. Result managers are deployed to be responsible for sets of results and other performance managers are deployed to be responsible for providing qualified capital solutions. Human and other capital are deployed as solutions, where qualified to produce results. The enterprise business is managed directly for the solutions utilized in performance and the results produced.

Result-performance Management organizes and manages the business to meet Rule No. 1 of 21^st century business management

Result-performance Management (R-pM) provides the knowledge, structures, and techniques needed to organize the business for 21^st century business management. The business is organized as result, capital, and performance structures in one integrated business structure for business management. The business organization is not a management prerogative. The business organization structure is high-worth capital in a professionally-maintained business organization solution used for all organization, planning, directing, accounting, and reporting. As the business is structured, parts of 20^th century structures to be retained are incorporated as part of the business. The 20^th century management structures laid over the business are then removed.

Result-performance Management (R-pM) provides the method to organize the business and utilize human and other capital, where needed to produce results

The source of knowledge for corporations to organize and manage their business is Result-performance Management (R-pM). R-pM shows how to organize results to be produced and then how to deploy and implement capital solutions where needed to produce results. Once the business is organized the business can be managed directly, without the need to lay enterprise organization and management structures over the 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.