Now is the time to take a new look at how you organize and manage your business, in order to compete in the 21st century. In the near future, your enterprise will have to compete with companies that use Result-performance Management (R-pM) to take advantage of information technology to organize and manage the actual business. R-pM users gain competitive advantage through effective business collaboration and utilization of information technology to deliver customer value and quality. Your unorganized business will be at a distinct competitive disadvantage.
Management methods used by all enterprises today cannot meet 21st century needs. Advances in information technology have made it imperative that the enterprise quickly change and adapt to serve customers and markets. Technology enables the enterprise to focus on the specific economic output and input results that form a value-quality chain from within suppliers, through the enterprise and business-partner collaboration, and on into customers’ value-quality chains. Technology has enabled changes in capital management to move from cash and accruals to the total worth of tangible and intangible assets. Technology enables us to simplify the enterprise to directly organize, plan, and manage business. Technology enables us to collaborate with partners and market our products around the world. Competitive advantage in the 21st century goes to the company that best uses technology effectively to manage the business, manage business collaboration, and deliver customer value and quality.
Conventional methods and structures used today were contrived in the 19th and 20th century, based on the business needs and technology available at the time. Information technology was not available to manage the business, so simple organization and management structures were laid over the business. Information technology evolved, but was used to computerize overlaid structures, instead of managing the actual business. IT now makes overlaid structures ever more complex, creating costly IT overheads. The overlaid structures conflict with the business causing unsolvable problems with reorganization, alignment, intangible assets, unknown costs and value, unknown worth and investment returns, and on and on. Our organization and management structures must be reassessed to take advantage of modern technology.
The main barrier to competing effectively in the 21st century is conventional thinking that says management improvement and new structures must be based on existing structures and methods. Management books and articles are substantiated as accurate by footnotes that prove that they are based on old thinking. New advances for competitive advantage attempt to improve structures laid over the business, which can never solve unsolvable problems. Throughout the 20th century, conventional thinking has prevented the simple analysis of what constitutes the actual business and how should modern technology be used manage the business. Instead, we continue costly and wasteful structures that prevent breakthrough competitive advantage.
Information technology can be utilized for breakthrough competitive advantage in the 21st century through Result-performance Management (R-pM). R-pM organizes the enterprise business as “investments in capital as solutions of worth utilized for cost-effective performance to produce value and quality in results”. The actual business consists of three components:
1. Results: Economic outputs of value and quality produced by business performance
2. Capital: Investments in specific human and other solutions of worth that are utilized in performance
3. Performance: Utilization of specific capital solutions to incur costs and be effective to produce specific results
These components are the only three that define the enterprise business. But, today these components are mixed together and defined as performance for performance management, preventing actual business management.
Result-performance Management separates results and capital from performance to organize the business for competitive advantage in the 21st century. The enterprise business is organized as a business structure with results across columns, capital solutions down rows, and performance in a cell to deploy a specific solution to produce a specific result. Results include product, order, satisfaction confirmed, service or project or assignment completed, or other output that can be counted. Capital includes all tangible and intangible assets organized as specific solutions. Human capital includes personnel solutions utilized and capability solutions provided to produce results. The business is organized and managed using one business structure for the current business and another business structure for the strategic business to organize strategic results and capital development required. Result goals show strategic value creation by period from the current to strategic business. The current and strategic business structures are used for all business organization and management to replace organization and management structures laid over the business today.
One competitive advantage of R-pM is the managed value and quality of results that go to the customer. The business creates value through results. Quality is an attribute of the result, not of the performance. Value must be added to results to justify improvement or development. Costs are incurred through performance. The performance cost can only be charged against the value created in the result produced. Performance effectiveness puts quality into results. Performance capacity is needed to produce a volume of results. Performance improvement or development can produce benefit only by adding value to results. The business must manage costs, value, benefits, worth, volumes, quality, risk, uncertainty, and other attributes of capital, results, and performance for competitive advantage. Capital solutions utilized in performance are managed to produce value and quality in each result in the chain of results that produce customer satisfaction and willingness to pay.
R-pM provides many significant competitive advantages in the 21st century by managing all results produced and all solutions utilized in performance, in both operations and development over time by period to create strategic value:
1. The business is dynamic to change results, capital solutions, and solution deployment for performance quickly and reorganize naturally with each change
2. All in the enterprise know their role in terms of results and goals and performance and expectations
3. Personnel are human capital solutions of assessed worth, who continually increase capabilities to produce higher-value results
4. Personnel understand that their capabilities are solutions utilized in a result value-quality chain, and that poor performance produces a low value-quality result that affects a chain of results
5. Personnel understand the relationship between the cost, effectiveness, capacity, and uncertainty of performance and the value, quality, volume, and risk in the results they produce
6. Managers and professionals are deployed to results that are organized to employ their capabilities, and they are supported by professionals deployed for each category of solution that they utilize
7. The business is managed separately for results in the value and quality of each result utilizing solutions and for performance, so that each solution is cost-effective for every result produced
8. The business is simplified to planning and reporting only results, capital solutions, performance, and related enterprises over time by period, providing one integrated management information solution
9. Capital investment is justified by itemized result value added and substantiated by future result value-added goals
10. Capital development develops both results to provide value-added benefit and capital to capture development costs and implement solutions to create result value and measure return on investment
11. The enterprise strategy defines strategic result value to be created and governance ensures the transformation from current result value to strategic result value
12. Current and strategic business structures are used for all organization, planning, direction, control, and reporting showing the inaccuracies, contradictions, and missing information in replaced structures
13. An efficient and effective 21st century business is created by standardizing capital and costs and gaining competitive differentiation and advantage in the value-quality of customer results
14. The business collaborates with other 21st century businesses by re-linking chains, since results and capital solutions are defined consistently and performance costs are standardized
R-pM provides competitive advantage by organizing the business for 21st century management. R-pM instills a new business management outlook throughout the business. Unorganized businesses burdened by obsolete organization and management structures can compete today because competitors are burdened with the same problems, costs, and inflexibility. But, R-pM makes obsolete organization and management structures severe competitive disadvantages. R-pM is now becoming the imperative for organizing and managing the business for competitive advantage through 21st century management.
Move beyond conventional thinking to evaluate the competitive differentiation and advantage of utilizing information technology with R-pM to organize and manage your business. Join the R-pM community at http://www.result-performance-management.com to learn more about R-pM.
|Harry Greene spent over 30 years trying to solve unsolvable organization and management problems as a business management consultant with Booz Allen and Hamilton, AT Kearney, and Arthur D. Little. In 2002, Harry established Result-performance Management Limited to eliminate unsolvable problems by managing the actual business with Result-performance Management (R-pM), as supported at http://www.result-performance-mannagement.com|