Improve Business Management by Managing the Business
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One simple secret to improve business management that no-one has ever tried:
Manage the business!
Conventional Business Management does not Organize and Manage the Business
Conventional enterprise organization and management structures are contrived
as overlays on the business, forcing the business to adjust. There are
continuous conflicts between enterprise structures overlaid on the business and
the actual business, which creates unsolvable operation and development
problems. We have contrived hundreds of structures and written thousands of
books on solving fundamental problems with alignment, business and information
complexity, collaboration, corporate governance, development benefits,
intangible assets, investment planning, project management, quality management,
reorganization, unknown costs, value chains, and on and on. All we do is work
around fundamental unsolvable problems that can never be solved by changing
overlaid structures or overlaying more structures.
Result-performance Management to Organize and Manage the Business
We must eliminate unsolvable problems by organizing and managing the business
as one integrated structure with Result-performance Management (R-pM), and then
removing overlaid structures. The generally accepted definition of business in
an enterprise is "the activity of providing goods and services". Therefore,
organize and manage the business means organize and manage "the activity of
providing goods and services". This is the objective of Result-performance
Management (R-pM). R-pM organizes and manages the activity as performance, and
the goods and services as results. This produces a result-performance business
structure that organizes the business. The business organization changes with
every change to a performance solution utilized or a result produced. The same
result-performance business structure is used for strategy, planning,
operations, development, record keeping, reporting, and all other aspects of
management.
Business Organization Structures
Before we can begin to manage the business, we need to organize the business.
But, instead of organizing the business, we organize units, positions, and
reporting into an enterprise organization structure that is laid over the
business. If we organize the business, the organization must change with
business change to keep the business organized. However, the business changes,
while the organization structure remains rigid, building pressure until there is
abrupt change in re-organization to align the organization structure closer to
the actual business, and repeat the cycle. The fatal error is to overlay an
enterprise organization structure on the business, rather than organizing the
business.
Business Planning Structures
It is difficult to plan the business, if we have not organized the business
and do not have a consistent understanding of the business. We try to plan based
on the organization structure, but encounter difficulties. This has prompted us
to contrive other structures to plan functions, processes, activities, maps,
etc. that are additional overlays on the business. We often have different
strategies and plans for corporate, finance, IT, marketing, sales, etc., that
plan different entities, rather than the business.
Business Management Structures
Since the business is not organized, the business cannot be managed.
Therefore, we must manage the enterprise through management structures like
business processes, account charts, career paths, performance management,
project management, executive information, and other overlaid structures. We end
up managing a wide variety of contrived entities like account codes, activities,
customer relationships, cycle times, objects, responsibility centers, supply
chains, tasks, work flows, etc. The overlaid structures and entities produce
business and information complexity.
Defining the Business to be Managed
If we are going to manage the business, we must define the business we are to
manage. The closest definition is the activity of providing goods and services.
This definition recognizes that the business has two components.
- The Activity: The actions and utilization of capital in the business, which
we call performance
- Goods and Services: The economic outputs produced by the business, which we
call results
The activity of performance utilizes the full spectrum of enterprise capital.
People are human capital, so people are one part of the performance needed. We
also have other capital that humans utilize to produce a specific result. The
results include the outputs of value that can be measured. Results are produced
by all capital utilized across the scope of the business. We can say that the
business utilizes capital in performance to produce value in results.
Managing the Business with Result-performance Management
The knowledge and instructions needed to organize and manage the business of
any enterprise is provided by Result-performance Management (R-pM). Modern
information technology facilitates organizing and managing the business. R-pM
organizes business activity as performance solutions, and organizes business
goods and services and other economic output as results. This produces one
integrated result-performance business structure, where the results to be
produced by the business are organized with the specific performance solutions
to be utilized to the produce results. Special extracts from the business
structure can define a result area, such as region, product group, project, etc.
Once the business is organized, the business organization changes with each
change to a result produced or a performance solution utilized. The same
business structure is used to plan, direct, account for, report, and optimize
the business.
The Transition to a Managed Business
We can benefit immediately by understanding Result-performance Management to
improve current business management. We can begin education and experimentation
to understand the on-going business in terms of results produced and performance
utilized, without actual change. When we have the need for change, we can
isolate the problem and apply Result-performance Management to manage change
properly.
We can redefine entities in existing systems in terms of results and
performance solutions to reduce information complexity. We can develop new
strategies and plans with Result-performance Management and restructure the
management information we produce, to record and manage results and performance
solutions. We can define one integrated result-performance structure to work
with conventional structures. Then we can gradually redefine and incorporate
conventional structures into the result-performance structure.
The Benefits of a Managed Business
R-pM provides one integrated result-performance business structure that
eliminates the unsolvable problems of conventional overlaid structures. R-pM
enables value-quality chains, investment benefits and returns, business
collaboration, good corporate governance, integrated information capital, and
many other benefits of managing the business. Use R-pM to improve business
management, by managing the business.
About the Author
Harry Greene is American, with over 30 years' experience in business change.
Harry is the President of Result-performance Management Ltd. He developed
Result-performance Management (R-pM), a new breakthrough in managing the
enterprise, described at result-performance-management.com (http://www.result-performance-management.com/).
Harry is the featured writer and editor of 21st Century Management Magazine,
published at r-pm.ne
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Article Published/Sorted/Amended on Scopulus 2007-03-27 23:04:53 in Business Articles
