Rule No. 6: Plan and govern the transition from today’s value to approved strategic value

Rule No. 6 of the ten rules for 21^st century business management states: Plan and govern the transition from today’s value to approved strategic value. This rule requires the development of management capital in strategy to plan the strategic business, in tactics to evaluate and assess progress of the current to strategic business, and in intelligence to anticipate opportunities, threats, and new developments. The rule must be followed to ensure good corporate governance.

20^th century strategies are planned and described by laying structures over the business

Strategies are planned today by laying structures over the business such as corporate plans, maps, investment analyses, budgets, etc. Separate and unrelated plans are often prepared for operations, finances, information technology, capital development, human resources, and other areas. The strategic business is not defined and strategies do not relate to the actual business. Goals and value creation are estimates and projections rather than the planned transition from the existing business. The rigid structures laid over the business conflict with the actual changing business and do not provide a foundation for good corporate governance.

Corporations govern by enforcing rules, because they cannot govern the business

Corporate governance is an unsolvable 20^th century management problem that arises because corporations do not organize and manage the business. The corporate business is hidden by overlaid organization, strategy, business process, account, performance management, and other structures that manage contrived entities, like department, object, activity, and account. Since the business is not organized and the strategic business is not defined, corporations cannot govern the business, and can only govern by enforcing policies and rules. Authorities address corporate governance problems through strengthened 20^th century accounting, auditing, and compliance reporting against structures laid over the business. The actual business remains unknown and actual business management information is never reported to management.

The current and strategic business must be planned and managed in the 21^st century

21^st century business management organizes the actual business in order to measure and understand value and quality in output results produced across the business, the worth and return of capital utilized to produce results, and the cost and effectiveness of performance across the business. This provides the foundation to understand future strategic results and the transition needed in operations and development to create strategic result value. Result goals are set time period by period to plan the path to strategic value. Corporate governance can understand and manage the transition from the starting business by period to reach the strategic business.

Management must plan and approve the business at the strategic horizon

Business strategy is management strategy capital. The management strategy unit plans the strategic business at a strategic horizon maintained within 2 to 5 years. A strategic business structure shows the specific business results of value to be produced and the capital solutions needed to produce the results. Once the strategic business is understood, there is a target for result planning and a foundation for fast change to manage newly anticipated opportunities, threats, and developments. The strategic business and changes are approved by the board as the future business objective.

Management must plan the transition from the current to strategic business

The strategic business is built up from the current business. Current result value and quality, capital utilized as solutions of worth, performance levels and costs incurred, and result value added are known. To reach the strategic business value of existing strategic results must increase, results of declining value must be closed, and new strategic results of value must be added. New capital solution acquisition and development is needed to increase and add result value. Operations are planned to add result value reporting period by period to reach the value needed at the strategic horizon. Development is planned to implement the specific capital solutions needed to add specific result value and replace low-value results. Goals are set for results period by period to the strategic horizon.

Good corporate governance manages the transition from the current to strategic business

Actual results produced and capital solutions utilized are managed against the plan to ensure progress to the strategy is maintained. Strategic value creation is managed period by period against result goals to keep on track and take actions to improve results as needed. A simple progress report can compare current period result goals against actual results, strategy to date goals against actual results, and the approved strategic goals against estimates of the actual to be produced by the continuing level of progress under the strategy. Result goals can be set for volumes, value created, value-added over performance costs incurred, or other result metrics. Corporate governance manages the transition against result goals and new strategic estimates.

Management tactics capital provides solutions evaluating results and assessing performance for responsible and optimized business operations and progress to the strategic business. Facility records capital provides the financial and non-financial status against goals and performance expectations or budgets. Management intelligence analyzes the business status and environment to provide projections and indicate management actions needed. Corporate governance is supported for decisions on new and changed strategic results to produce and the capital development needed. The actual business is understood and managed.

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

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. Business management knowledge and the Business Management Toolkit are available and supported today 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.