Need For Result and Performance Management

Re-organization from One Rigid Structure to Another

Organization structures are rigid. Business change builds pressure for disruptive re-organization to another rigid structure. An organized business never needs reorganization.

The organization structure is the "fatal error" of 20th century management. 20th century business organization lays an organization structure over the business and does not organize the business. If the business is not organized, the business cannot be managed!

Most enterprises organize people through organization studies and structures, job descriptions, salary scales, and fixed reporting lines. Larger organizations tend to be rigid, restricting business flexibility and conflicting with business change. Organizations perform a function, administer an area, or carry out a responsibility. Few units are organized to produce specific results. Even fewer are organized to ensure effective performance. Those who should be managing enterprise capital and performance are "administering functions".

The organization structure fixes people in position, functions performed, and reporting relationships

The organization fixes the results that the enterprise can produce. The organization budget and assigned capital is removed from enterprise control. The business must adjust to the organization. Whenever the business changes and the organization remains static, it becomes more difficult to adjust and the pressure for organization change builds. Accumulated business changes eventually necessitate re-organization. Re-organization requires a large project, with consultants, change management, and other techniques to help the enterprise cope. The basis of such re-organization is often 20th century organization theory, political power, functions and positions, etc. rather than organizing the business. The enterprise moves from one inflexible structure to another inflexible structure, to repeat the cycle.

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20th Century Organization Compared to Result-performance Organization: 20th century business organizations organize people through organizational studies, using some rationale. In fact, there is only one rationale for business organization; the results the enterprise must produce. Basic results and solutions can be standardized across enterprises for capital and investment management. The results required to produce revenues or meet objectives are the unique results that define each enterprise.

Organize the results you must produce, and then deploy human capital and other performance utilized

The organization structure is not a management prerogative! Management decides on strategic results to produce and performance solution investments needed to produce results. The organization structure must be a professionally-managed business solution that provides one integrated business structure for utilizing specific invested capital as performance solutions to produce economic output in specific results.

R-pM organizes the business, not people. People are human capital performance solutions deployed, like other capital, where they have the capability to manage or produce results. R-pM creates a living organization that changes with results produced; there is no separately-created organization structure. Under R-pM, the organization is a business solution that describes the roles and relationships to produce results. Other capital is managed separate from the organization capital. The organization evolves as enterprise results produced evolve. Change management is built into on-going responsibilities.

R-pM ensures that the organization is a living organism that defines actual business and continually performs effectively to produce results efficiently. R-pM organizes the business for 21st Century Management to leave unsolvable 20th century problems behind.