Why you cannot manage your business

Managers today cannot manage their business

Are you a business manager? Is your business organized? Can you manage your actual business? Virtually all business managers think that they are managing their actual business. A fundamental problem is that no one has ever stopped to think and ask, what is the business that must be organized and managed?

There are many definitions for business, but no specific definition is used for business enterprise organization and management. The most common definition for business enterprise is “the activity of providing goods and services”. Does your business enterprise organize and manage “the activity of providing goods and services”.

All business schools, management books, and professional services today propagate 20^th century management. 20^th century management does not organize and manage the business enterprise. Instead, an arbitrary enterprise organization structure is laid over the business. The actual business in “the activity of providing goods and services” has never been defined or organized and cannot be managed. Therefore, enterprise management structures must be laid over the business for corporate planning, budgeting, accounting, business processes, information systems, administration, performance management, etc. Management manages the entities described in the various overlaid structures. Management reporting is against the structures laid over the business. There is no management or reporting of “the activity of providing goods and services”.

You can manage your personal business, but not your business enterprise

At the same time, each of us manages out personal business. We manage business activity in the use of our time, capabilities, information, money, possessions, and space; which is our personal business capital. We provide goods and services for ourselves in the results we produce from the utilization of our personal capital. We do this naturally. We do not lay organization and management structures over our personal business. We organize our possessions so that they are handy when we need to utilize them in performance to produce results, such as dinner, a clean house, a purchased item, or a night out.

The value of the result must exceed the cost of performance in order for us to be happy with the result. We know that the quality of the result depends on the effectiveness of the performance solutions we used. We know that there is a risk that the result may not be produced as planned due to the uncertainty of our performance. We know that the volume of results we can produce is restricted by our performance capacity to produce results.

This is natural business management, not contrived and artificial 20^th century management that you use to manage the business enterprise.

Result-performance Management (R-pM) organizes the actual business for 21^st Century Management

Finally, there is a way to manage your business, “the activity of providing goods and services”. Result-performance Management (R-pM) organizes business activity in the utilization of capital as specific performance solutions to produce economic outputs in results, like goods and services. R-pM integrates business organization and management in one business structure that replaces all the 20^th century organization and management structures laid over the business. R-pM utilizes the general ledger system to manage finances, costs, and statistics against one business structure. R-pM measures and reports the actual business when a specific performance solution is utilized to produce a specific result in result value, performance costs, result value-added, result quality, capital worth, and other entities that cannot be measured and reported today. Your have one set of complete and accurate information, so that you can manage your actual business.

Gain competitive advantage by managing your business

Abolish 20^th century management structures laid over the business and all the unsolvable 20^th century management problems. Significantly reduce IT overheads and other costs. Increase the value of results produced by result chains across your business. Use one set of complete and accurate management information on the status of the actual business and progress to create planned result value in the strategic business structure. Gain significant competitive advantage over other business enterprises still burdened with obsolete 20^th century management.

All the guidance needed is provided in The R-PM Toolkit, your 21^st Century Management Manual. Subscribe to the Toolkit, and updates through 2009, at result-performance-management.com.