The Twentieth century enterprise doesn’t manage business reality! Business the truth is based on two entities:
– Results: The particular economic outputs in the totality from the business
– Performance Solutions: The invested capital particularly employed to produce specific results
The enterprise must organize and manage results and gratifaction solutions to be able to organize and manage business reality.
The failure from the twentieth century enterprise to arrange and manage business reality creates unsolvable management, business, and gratifaction problems. The Twentieth century enterprise defines both performance solutions utilized and also the results created as performance. This problematic definition prevents control over business reality. So, rather, we contrive many other methods as overlays around the business and manage entities like departments, jobs, positions, functions, and procedures.
We still overlay new methods and write a large number of books, but we’ve never solved the very best 10 management problems within the twentieth century enterprise.
1. Reorganizations: We’ve never organized the company. Rather, we organize people, positions, power, and politics and overlay rigid contrived organization structures around the business. The company must adapt to the business. Business change causes it to be harder to regulate, until there’s a significant upheaval known as the reorganization. Then we contrive another arbitrary organization and repeat the cycle.
2. Accounting and Financial Management: In the past, the enterprise required to safeguard cash and thus setup cash and accrual accounting and financial management. Accounting and financial management retain this legacy and, consequently, prevent modern records management and comprehensive capital management. Accounting prevents financial records on costs, value produced, and comprehensive capital worth. Financial management focuses on easy-to-manage cash and financial investments and prevents control over high-worth capital that’s “administered” or perhaps is called “intangible assets”.
3. Investment Analysis and Capital Development: The enterprise is not able to itemize and plan the advantages of capital development investments, and it is not able to handle growth and development of benefits and return on investments. Investment benefits are contrived estimates that can’t be managed. There’s no management responsibility for the effective use of developed performance solutions, to guarantee the return.
4. Administration: Administration performs functions, instead of producing results, and prevents proper capital management. The enterprise invests in capital that winds up being administered, instead of managed for advantageous utilization, ongoing improvement, along with a high return around the investment.
5. Performance Management: Performance is determined to incorporate not just those things of performing, but the results created. Which means that performance and also the results created are mixed together as key performance indicators as well as in the different performance management methods employed. This meaning of performance prevents the twentieth century enterprise from managing business reality.
6. Business Complexity: Every new method, re-engineered process, implemented system, chart of accounts, etc. is definitely an overlay around the business and contributes to business complexity. Contrived entities are managed stopping knowledge of business reality. New results and gratifaction are added but aren’t managed being an enterprise whole, for improvement or removal if not needed.
7. It: Computer and solutions are managed as technology. IT covers strategy, planning, business application, technology, and architecture management. Jetski from one integrated enterprise strategy and integrated business capital and support. The varied capital requires many abilities to handle, allowing the CIO problem. Applications are managed as technology instead of as business solutions, and business change results in the technical backlog.
8. Change Management: We want change management because we mismanage change. We don’t manage the company, human, and management capital to become altered and useful for benefit. Change is thru disruptive projects, instead of included in the routine. Change management services address signs and symptoms and don’t solve fundamental problems.
9. Corporate Governance: We attempt to resolve corporate governance problems in the governance side by strengthening the issues in accounting, auditing, and compliance reporting. This really is futile. The issue are only able to be eliminated in the corporate side, by organizing and managing business reality.
10. Alignment: Many methods happen to be developed and lots of books happen to be written on aligning strategy using the business, computer using the business process, outsourced processes and internal processes, tangible assets and intangible assets, etc. This is futile. We can’t align solutions with solutions. We are able to only align solutions using their input and output results.