Take the Mystery out of Business Change
By H. Greene
Why is business change such a mystery? Your company likely has had problems with re-organizations, system implementations, process and performance improvements, and other business changes. Your company may have hired change management consulting services, but still have business change problems. The problem is found in conventional change methods that plan and manage business change, without planning or managing the things that change.
The company cannot manage business change, if it does not manage the business
The company is not structured and managed to change as a part of the routine of everybody in the company. Change is the exceptional ad-hoc endeavor.
The company organizes and manages only contrived entities that are impacted by change, such as organization units, jobs, functions, business processes, objects, activities, accounts, positions, etc. So, the company tries to manage business change by managing various entities that are impacted by change. For example; we try to understand the costs of change without knowing the capital we are implementing through the change. Much of the capital is classified as “intangible assets”. We then charge those known costs of utilizing tangible assets to such entities as centers, responsible managers, or activities, which are things that were not created or improved by the costs.
Only two entities change in business change
It is important to understand that only two entities change through business charge:
– Performance Solutions: The capital investments in change that must be utilized as performance solutions in order to change the business. The capital cannot lumped together as “intangible assets”
– Results: The economic outputs in results produced by the capital investments that must provide the return on the change investment. We must identify how value is created from the costs of the capital consumed.
The only way to plan, execute, measure, and follow up on business change is to identify and manage all the existing and new results from the change, as a set of results. Results include all outputs be it an order, maintained machine, a product, a report, recovered waste, trained staff, a policy, etc. The company also must identify and manage all of the new performance solutions to be developed and existing performance solutions to be improved, as a set of performance solutions. Performance solutions include people and their capabilities, the process and methods, software and equipment, supplies, management guidance, information sources, and other capital used.
The bottom line is that the company cannot manage business change until it organizes and manages the only two entities that change.
The company needs a new approach to manage business change.
One of the historic problems with business change is we try to incrementally improve on the way we have defined the business. If we are going to make fundamental change, we must be willing to define the fundamentals of the business.
These fundamentals are defined by Result-performance Management (R-pM). R-pM directly defines the business by only two entities
– Results: The economic outputs that are the volume, value, and quality of the business
– Performance Solutions: The investments in capital and business change that provide the business, human, facility, and management capital utilized to produce results. Performance solutions are the capacity, costs, and effectiveness of the business.
Result-performance management can be used for any business change. R-pM enables the company to isolate the problem area, to identify the results produced within that area and the existing performance solutions available. Many results should not be produced and new results will be needed. Many performance solutions will be ineffective and new, more effective, solutions will be needed. But, by identifying results and performance solutions we directly change the entities that change, and can continue to manage results and performance after the change.
Result-performance Management (R-pM) provides the breakthrough to manage business change
Result-performance Management (R-pM) can be applied to plan and manage any capital development or business change project. R-pM follows a set of principles to take the mystery out of business change:
– Set up a company management capability to manage change and development
– Hire R-pM consultants, who utilize R-pM and follow the R-pM consulting model, to assist with change
– Identify new results needed and existing results to improve, to meet the change objective
– Describe each existing or new result and evaluate the positive or negative value of change
– Describe new or improved performance solutions needed to produce changed results
– Estimate the cost of acquisition, development, or improvement of each solution, and assess future operating costs
– Determine the total value increase for all results over the expected payback period to justify the investment
– Substantiate the investment through goals accepted by managers responsible to utilize new solutions to increase result value
– Follow the new R-pM result-performance development method to properly effect change
– Evaluate progress at close out to ensure solution utilization for result value-added, and acceptance of goals for continued value-added
Any company employing these principles, as a part of integrated R-pM methods, will be able to execute successful business change
R-pM Provides the Methods and Support for Successful Business Change
Result-performance Management (R-pM) is employed to isolate the set of results and the set of performance solutions involved in change. The existing organization, with possible modification, can be responsible for new results. Responsibilities for solutions utilized can be established within the existing administrative organizations.
Learn about Result-performance Management by joining the R-pM community to download documents explaining R-pM concepts. The “Result-performance Development Summary” explains capital development and business change methods. “How to Manage Business Change” expands on the principles described in this article to provide a sound understanding of actual business change.
So, the next time your enterprise faces a business change project, employ R-pM to take the mystery out of business change, to reduce risks, and to plan and manage the benefits of change.
Harry is the President of Result-performance Management Ltd. and posts information on R-pM at result-performance-management.com (http://www.result-performance-management.com) the home site for the R-pM community.