Rule No. 1: Organize and Manage the Business

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

The article of January 7, 2008 lists the ten rules of 21^st Century Management with R-pM. Rule No. 1 is Organize and manage the business. This rule is fundamental to eliminating 20^th century organization and management problems.

The 20^th century enterprise has never organized or managed the business creating unsolvable problems that can only be eliminated by organizing the business for 21^st Century 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 enterprise business 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 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 prevents the business from being managed.

20^th century organization theories organize “the enterprise” into units, positions, functions, reporting relationships, etc. to 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 the 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.

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.

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, must be 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 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 performance solutions. Business goods and services are economic outputs that must be organized and specific results produced from business activity.

Every enterprise has a business structure, like a spreadsheet that shows the results produced in the columns and performance solutions utilized to produce results in rows down the left. The business structure allows the business to be organized by deploying specific performance solutions to produce specific results and to be reorganized by changing results produced or solutions utilized.

Once the business is organized the business structure is used for 21^st Century Management

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

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

Result-performance Management provides the structures and techniques needed to organize the business for 21^st Century Management. R-pM organizes the business as a result-performance structure and uses the organized business structure as one integrated 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. Once the business is structured with R-pM, 20^th century structures are incorporated as part of the business. as needed, and then removed.

Learn about using R-pM to organize and manage the business and download the authoritative document “How to Organize the Business Enterprise” at result-performance-management.com. Download the information needed to organize and manage the business with R-pM in the R-pM Toolkit, your 21^st Century Management Manual.