Use one Structure for Organization, Operations, Development, and Management: the Business

Different structures are contrived for organization, management, operations, development, and other needs

Since the beginning of business enterprises, there has been a need for structures. People need to know their role in the business, so we have an organization structure. Management needs to plan the business, so we have maps and corporate plans. Work needs to be done, so we have process structures. Accountants need to record transactions, so we have account structures. Administration needs to administer employees and assets so we have functional structures. Each information system is built on different structure. The enterprise must be developed, so we have project structures. Management needs to track what is happening, so we have reporting and performance management structures, like financial statements and scorecards.

Enterprises contrive many organization, process, system, accounting, and reporting structures. There are inevitable problem in trying to make the structures agree with each other and other existing structures to consistently describe the enterprise. Each structure defines its own set of information entities; the organization is departments, functions, and positions; the process is activities, stations, and checkpoints, systems are inputs, entities, and outputs, accounts are centers, objects, and codes; etc.

The conflicting structures produce business complexity and information complexity in the differing and inconsistently-defined information entities used to describe the enterprise across existing and new structures. The problem is compounded, since each enterprise uses a different set of structures and definitions, which prevents business collaboration and common business solutions.

Many are looking for one structure to simplify the business, enable collaboration and common solutions, and report consistently

The problem with the wide variety of organization and management structures has been apparent for some time. Many have recognized the need for one organization and management structure to simplify operations, consistently define business information, enable collaboration, apply common solutions, and eliminate problems inherent in the conflicting structures. Despite these efforts, the “holy grail” of one integrated structure, that can be utilized to organize and manage the complete business in any industry through a minimum of consistently-defined information entities, has proved elusive.

In the end, we contrive new structures for needs like value chains, outsourcing alignment, and quality control. We try to get around the problem through structures to integrate other structures like data reconciliation, added levels of enterprise information management, IT architectures, etc. More structures and systems add more business and information complexity, excessive IT overheads, and spiraling costs.

Only one structure can organize and manage the business, the business itself

The needed structure has existed all along, but it has never been identified or used to organize and manage the business. That structure is the business itself!

The real enterprise business is “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. The only way to organize and manage the business is to organize and manage the three components of the business:

• Results: The economic outputs that create the value that must be produced for business success
• Capital: The solutions of worth invested in the business that are implemented in the business to produce specific results
• Performance: The actual consumption and utilization of specific capital solutions in performance domains to incur costs to produce a specific result

The enterprise business structure is like a large spreadsheet with the results produced by the business organized in the columns across the top and the capital that produces results organized as solutions in the rows down the left. A cell is a performance domain that records where a specific solution is implemented along the row with rules and exceptions to be utilized in performance to incur costs and produce value in specific result columns. The performance domain records the cost and effectiveness of the solution in producing value-added and quality in the result. All the solution rows utilized by one result column add up to the full cost and effectiveness of producing the result. All the result columns produced by one solution row add up the the full utilization. return, and worth of the solution.

The organized business defines capital as specific tangible and intangible solutions invested in the business, defines inputs to and outputs from the business as results, and manages the utilization of each capital solution in performance to produce each result. Business transactions are generated each time a volume of full or partial results are produced. This captures actual business data for capital investment amounts, solution worth, and investment returns; result volumes, value, and quality; and performance capacity utilization, costs, and effectiveness. Management can receive one set of precise and concise management information to manage and account for the business directly.

The organized business utilizes specific capital solutions to produce specific results for the current and planned strategic business. The current and strategic business structures replace all overlaid structures for transparent management of the business. The business structures are used for all organization, planning, direction, control, reporting, operations, development, collaboration, good governance, packaged solutions, and any other need.

The 20^th century enterprise has never organized and managed the business

Results to be produced by the business to create value, capital investments made in the business to provide worth, and the real performance of the business to utilize specific capital to incur costs and produce specific results has never been organized or managed in 20^th century management. If the business is not organized and managed the value created, costs incurred by the business performance, the value added over costs across the business to produce profits, enterprise capital and total worth developed, and the return on specific capital investments can never be managed and known accurately.

In most enterprises today there is resistance to defining capital, results, and performance domains as managed sets. Capital is defined to mix some capital as separate items like assets and employees. Performance in the utilization of some known capital may be measured for the capital itself. Some output results are produced and managed as separate items such as products, sales, and revenues. So known capital solutions, performance, and results are organized and managed piecemeal. Management remains unaware of the importance of managing the actual business in the complete set of human and other capital invested in the business, the complete set of results planned to be acquired as inputs and to be produced by the business, and the complete utilization of specific capital as solutions to produce specific results in actual performance of the business. If the business is managed, work can be focused on capital worth and returns, result value and quality, and performance cost-effectiveness and value-added, rather than the time consuming and ineffective management of random and conflicting performance defined by various structures laid over the business.

Enterprises continue to commit the fatal error of laying an organization structure over the business, instead of organizing the business. Once an organization structure is implemented, the business cannot be organized or managed. The enterprise must be managed by additional inconsistently-defined management structures that are also laid over the business. The solution to unsolvable 20^th century management problems, the actual business, lies buried under overlaid structures.

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

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.

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