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 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. 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 structures laid over the business 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 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.

R-pM plans and manages the current and strategic business

R-pM organizes the actual business in order to measure and understand value in output results produced across the business and the cost 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.

R-pM plans and approves 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.

R-pM plans 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 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 ensure progress to the strategy is maintained.

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

Strategic value creation is managed period by period against result goals to keep on track and take actions to improve results as needed. 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.

Use R-pM to Plan and govern the transition from today’s value to approved strategic value

R-pM provides the explanations and guidance to organize the business for 21^st Century Management in order to follow the ten rules. R-pM is explained at result-performance-management.com. The R-PM Toolkit provides the explanation and guidance needed to organize and manage the business and the conventions and standards for 21^st Century Management.