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TO COME ... Images to be changed
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Navigation
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SOCIO progress and performance
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Open L070-PP-SOCIAL
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HUMAN CAPITAL ... an INDIVIDUAL perspective
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Open L0700-PP-INDIVIDUAL
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RELATIONSHIP CAPITAL ... the collective / community perspective
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ENVIRO progress and performance
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Open L070-PP-ENVIRONMENTAL
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Multiple Perspectives
Air, Biodiversity, Climate, Ecosystem, Forest, GHG, Governance, Land, Minerals, Waste, Water
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ECONOMIC progress and performance
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Open L070-PP-ECONOMIC
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PHYSICAL CAPITAL
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Perspectives of INFRASTRUCTURE, ENGINEERING, TECHNOLOGY
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FINANCIAL CAPITAL
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Open L0700-PP-FINANCIAL-ECONOMY
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An INVESTOR perspective
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Open L0700-PP-PORTFOLIO
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KNOWLEDGE CAPITAL
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INSTITUTIONAL CAPITAL
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An ORGANIZATION perspective
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Open L0700-PP-ORGANIZATION
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PROGRAM perspective
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Open L0700-PP-PROGRAM
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PROJECT perspective
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Open L0700-PP-PROJECT
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CULTURAL CAPITAL
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LOCATIONAL CAPITAL
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The PLACE perspective
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Open L0700-PP-PLACE
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STATE, FLOW and CHANGE in STATE
CHANGE in STATE is a very efficient way to measure progress
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GO TOP
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Compared to POTENTIAL
Extremely poor PROGRESS and PERFORMANCE
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GO TOP
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The POTENTIAL of modern KNOWLEDGE
The amount of knowledge has been growing exponentially for a very long time ... and in the past 50 years the amount of new knowledge has exploded.
Compared to the growth in knowledge the actual progress of the socio-enviro-economic system has been very modest.
Worse ... far too much of the knowledge has been applied in ways that have had the effect of impeded socio-environment progress for many while giving excessive benefit to a limited group of beneficiaries. Over time the level of inequality has become dangerously unstable.
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The UTILIZATION of modern KNOWLEDGE
Modern knowledge has been applied in many ways that have been good for some and very bad for others. There are many examples:
(a) The increasing power of technology to destroy, and the relative weakness of technology to achieve and maintain peace
(b) The gaming of the system in order to creater financial capital while social capital and natural capital are exploited and destroyed
(c) The increased abiity to communicate rapidly and the growth of dataflows without much related growth in understanding
(d) Too much information enables users to choose their information to suit their prejudices. Freedom of speech being abused to misinform without limit.
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Activites in the real world are very, very complex, and quite disorganized.
What is the best way to manage progress and performance in the reality of complexity?
Start by measuring progress.
Progress is the CHANGE in STATE between the BEFORE situation and the AFTER situation.
Look at the following graphics
Understanding and measuring anything meaningful in the squiggles that represent the multitude of activities that are going on in any period is a huge task ... but measure the STATE before and after in comparatively simple and gives a very clear indicator of progress.
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TPB note: My personal experience has been that it helps to have clarity about the goals. Historically companies have been very clear about the goal of improved profit performance, and as a CFO I wanted to be able to report periodically on profit improvement. In order to get to this outcome, the reality of the company's operations was complex and not always in the right direction. The company needed data that would inform ALL the decision makers throughout the organization how they were performing and how this was likely to impact the profit. My experience has always been that everyone will attempt to make better decisions when they have useful facts and know that performance is in fact being monitored in a fair and impartial manner. Better yet, when data about factual reality and performance are visible (transparent) then many individuals will outperform what was teh accepted norm simply because they know better than anyone else what actually works! With visibility, these outperformers can be recognised ... it may be financial reward, but non-financial reward also has important value.
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The Relationship between Before State, Period Activities and After State
PROGRESS is the increase in VALUE (of the STATE) from beginning to end of the period
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Three examples: Steady State / Good Progress / Bad Results
Simply measure the change in the VALUE or everything
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In this case the activities of the period do not change the state ... state at the end of the period (EOP) is the same as at the beginning of the period (BOP)
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There is GOOD progress when the activities of the period result in a state at the end of the period that is better than the state at the beginning of the period.
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There is BAD progress when the activities of the period result in a state at the end of the period that is worse than the state at the beginning of the period.
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What this means is that PROGRESS can be ascertained by reference to the state at the beginning and the end of a period, with no need to have any knowledge of the activities during the period that results in the change.
When this is at the core of the progress measurement method, it enables a significant simplification of the data collection and analysis process.
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The problem with conventional accounting is that while it does a very good job for money based transactions, it ignores all the impact that is not measured with money and included in the core transaction.
Since the beginning of the industrial revolution, the growth of financial wealth has come about while human capital has been exploited and natural capital has been depleted. When the global economy was quite small in size, the natural capital depletion did not represent an existential threat, but the scale of the modern industrial activity has now reached a level where natural capital depletion is a significiant risk.
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In True Value Impact Accounting ALL the capitals are taken into consideration, not just the financial capital.
This graphic shows the characteristics of the capitals
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