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Results: Economic Output and Value Creation
Results produced from performance contain value, quality, volume, and risk.
Every enterprise business produces economic outputs. These outputs are results, even though they are not called results and are not managed as entities in a set of results. Conventional business process management and "Managing for Results" say results are economic outputs that leave the enterprise.
R-pM manages results as economic outputs produced by the business within the enterprise, leading to final results that leave the enterprise. R-pM defines the relationships between results and organizes all results in a Result Structure.
Why manage results?
Many essential business attributes and data elements are not recorded or managed today, because results are not managed. Results must be managed as one information set for effective 21st Century Management, since:
- Results are the economic outputs of value that must be produced to fulfill business objectives
- Results are one of the three components of a business
- Results must be managed to manage the business and result goals
- Results must be managed to utilize performance solutions properly to produce the result
- Results like fulfilled order, product produced, service delivered, maintained equipment at a high level are produced by a set of lower-level results
- Results embody business volumes, value, quality, and risk
- Results have common attributes like product, code, unit, manager, customer, group, etc. that are used to form result sets
- Results relate to each other in precedence, impacts, cost and value contribution, common management, and place in a value-quality chain
- Results provide the links in the value chain from supplier input results to final customer results
- Results absorb costs to show value added, and describe the effectiveness of the performance utilized
- Results create strategic value and must be managed to manage strategic value creation
- Results value provides capital development benefit and return, which must be known to manage investments and projects
Some outputs are defined as entities, but Results are not defined as a set
Results are the economic inputs to and the economic outputs from performance. Some economic outputs are managed today as separate entities such as; design completed, material item received, machine maintained, product produced, customer service rendered, production waste recovered, order delivered, etc. Other economic outputs often are not defined or managed, such as capability developed, knowledge created, record transaction processed, strategy approved, pricing policy developed, market study completed, investment justified, etc.
Results are structured to manage the commonalities of business outputs
It is very important for the enterprise to manage results. Results are distinct accomplishments that can be counted and measured. Results are defined at some level across the business, so that all performance produces results. The level of definition is flexible to balance the benefit of management control, with the cost and effort involved. Results have common attributes, such as customer, alternative identifiers, group, objective, quality and risk determinates, and specific metrics that can select out manageable result sets. Plans and goals can be set for results by time period.
Results are organized in the business Result Structure as key results produced at the highest level across the business and as end-results produced directly from performance at the lowest level across the business. Set-results are defined to organize end-results and other set results that produce a key-result. Some result details, like product or order, can continue to be managed as entities related to the result structure.
Results create strategic value
If we want to create strategic value, we must manage results. Results are the economic outputs from the business that contain value. Customers pay a value for results. The value of every result must exceed the cost of performance to produce the result, to justify its production. The strategic business structure plans future results needed for development and growth. Strategic result value creation is managed through result goals by period to the strategic business structure. Corporate governance manages the convergence of the current period business structure toward the strategic business structure with new strategic result value estimates.
Result relationships define how results interact and are structured
R-pM defines the relationships between results, so that results can interact and be processed. Result relationships define results that must be produced before other results, results that add cost and value to other results, set-results that incur costs allocated to end-results, results that must be managed together, results that comprise a value-quality chain, etc. Result relationships are used to organize results in the business Result Structure.Results are transformed in value chains to produce final result value
Certain results are transformed by performance to reach a final result. This forms a result value-quality chain. Performance costs are charged to result value for each result in the chain to manage result value-added. The value and costs of each result in the chain adds to the value and cost of the final result. The results in the chain are linked by the natural result relationships, and not by a contrived work flow.
Results embody corporate quality, volumes, and risk
We manage performance quality, but quality is an attribute of the result. Even for a business service, the quality is in the result that is input into the customer result value-quality chain. We must manage the effectiveness of solutions to produce a quality result, and the quality of each result that goes into the final result. One ineffective solution can produce a low-quality result. One low-quality result in the chain can produce a low-quality final result.
Results are counted and measured to relate the volume produced to the performance capacity provided. There is a risk that results will not be produced as planned, which is managed along with performance uncertainty. Every unit or person justifies their costs by producing results of greater value, not by performance of functions, tasks, activities, jobs, or work.
Result value-added is the objective of capital development
It is important to manage results for capital development and business change. The results to be improved or added must be defined in order to define the specific performance solutions to be developed. The objective of development must not be to develop and implement capital. The objective must be to add value to the specific results produced by specific new or improved performance solutions developed. We must define and manage results to plan, measure, and manage result value-added and the return on all of our investments.
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