Rule No. 5 of the ten rules of 21st Century Management is Operate to optimize operations, result value-added, and the profit result. This rule requires that the performance solutions utilized to produce each result are optimized to be cost-effective and produce a high value-quality result, so that all business operations are optimized.
R-pM organizes the performance producing each result
Business operations cannot be optimized unless the business is organized in order to manage the specific performance that produces a specific result. Result-performance Management (R-pM) organizes the business, so the business can be optimized, by ensuring that performance solutions are deployed to the proper results and integrated to employ the most cost-effective performance to produce the highest value-quality result.
R-pM organizes enterprise capital as specific performance solutions
R-pM organizes the capital the enterprise invests in as specific solutions to be utilized to produce the result. This allows the enterprise to capture the cost of developing or improving the capital and to assess the:
- Cost of consumption of the capital in operations
- Effectiveness of the capital to produce a high-quality result
- Capacity of the capital to produce a volume of results
- Uncertainty of the performance of the capital and the risk of a poor result
- Return provided on the investment in the capital from the share of result value added
- Level of performance of the capital against expectations
- Worth of the capital assessed from result values produced
Performance solutions are categorized as business, human, facility, or management capital so that a performance manager with specific capabilities can be responsible for providing good solutions. Within each category, solutions are classified as one of three classes; as readiness solutions to prepare an organization responsible for a set of results, as production solutions to be used or consumed in producing each actual result, and as information solutions to support or document results. Performance solutions are integrated by capital class for utilization to produce a result.
R-pM organizes the outputs produced by the enterprise as specific results
R-pM organizes the inputs incorporated and outputs produced by the enterprise as results. Results are tangible items of value that can be counted. This allows the enterprise to evaluate the:
- Value of the result produced in a chain of result values
- Quality of the result against standards and quality determinates
- Volume of results counted from utilizing the performance capacity
- Risk that a poor or defective result will be produced
- Actual against goals to produce a quantity or value within a time period or quality of the result
- Total performance solution costs absorbed against the value
- Result value-added in result value less total performance costs
Results are categorized as revenue results in a chain of results that produce revenue and profit results, capital results that manage capital and support performance, and investment results that implement new or improved performance solutions to increase future result value.
R-pM optimizes the performance producing results to optimize value-added and the profit result
R-pM as Result-performance Management manages the performance producing each result and evaluates results and assesses performance to optimize the result. Each performance solution is under a performance manager and each result is under a result manager. Each manager has a continuing responsibility to ensure cost-effective performance to produce a high value-quality result. Result value-added (result value less total performance costs) is maximized. Result value-added contributes to the profit result.
High value or strategic results are periodically optimized from the bottom up with each result manager in coordination with the performance manager for each set of solutions utilized. Results and performance are also optimized from the top down by investment management for return on investments and senior management to identify and rectify problems.
Performance solutions are assessed by capital class to ensure that they are integrated to be effective in producing the result. Result goals are reviewed against the expectations of solutions to ensure that goals can be reached by the solutions provided. Result value is evaluated against the performance cost of each solution and the total cost of solutions to know and improve the result value-added. Result quality is evaluated and the performance of each solution is assessed to ensure that each solution is effective and that any ineffective solution is identified. Performance uncertainty is assessed to identify the risk of a poor result to modify or insure the result or reinforce performance. Performance capacity to produce a volume of results is assessed to ensure that the lowest capacity solution is sufficient and that the cost of overcapacity in other solutions is minimized.
R-pM makes operating to optimize operations and the profit result part of the routine of result, performance, and investment managers.
Learn more about R-pM and The R-pM Toolkit at Result-performance-Management.com
R-pM replaces all the unorganized and ineffective work being done today with focused work to manage and operate the actual business to utilize cost-effective performance to produce high value-quality 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.
March 23rd, 2008 at 2:58 am
[…] Operate to optimize operations, result value-added, and the profit result. Provide result value-added leading to the profit result. Optimize operations and the profit result by managing the volume, value, quality, goals, and risk of results by optimizing the capacity, cost, effectiveness, expectations, and uncertainty of the performance solutions that produce the result. Operate through cost-effective performance producing value-quality results […]