image missingTrue Value Metrics (TVM)
Meaningful Metrics for a Smart Society
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CONTEXT
ISSUES
POSSIBILITIES
HOW THE
WORLD
WORKS
ACTIVITIES
SECTORS
STREAMS
STATE
ALL THE
CAPITALS
ACTORS
PEOPLE
ORGANIZATIONS
PRODUCTS
STUFF
CONSUMPTION
PLACE
COMMUNITIES
COUNTRIES
PEOPLE
QUALITY
OF LIFE
NATURE
SOURCE of
all VALUE
ECONOMY
MONEY
LIQUIDITY
TRUEVALUE
DATA at
the CENTER
ABOUT
VISION
STRATEGY
Date: 2018-12-12 Page is: DBtxt001.php L07-TRUE-VALUE-DATA-at-the-CENTER


TRUE VALUE
DATA at the CENTER
TRUE VALUE METRICS
.
TRANSPARENCY and ACCOUNTABILITY
METRICS TO MAKE THE WORLD A BETTER PLACE
Data at the Center Measuring Progress Activities change State Enhanced Accountancy
  • Management is the Art of Making Changes to Achieve Improvement
  • Collect and Analyze Data to Understand How Things Work
  • Expand the GOOD ... Eliminate the BAD
  • More and More Data and Analysis is not Better Management
Double Entry AccountabilityTM
for PEOPLE, PLANET and PROFIT
for ALL the CAPITALS
for ALL ACTORS and ACTIVITIES
image missing Numbering the Triple Bottom Line

Accounting for ALL the Capitals
image missing
.
Site Navigation
Comprehensive Site Navigation
All Main Sections
Open L070-SN-SITE-NAVIGATION
TRUE VALUE METRICS
ENHANCED METRICS FOR BETTER PERFORMANCE AND ACCOUNTABILITY
Open L070-TVM
METRICS for MANAGEMENT
WITHOUT METRICS ... IMPOSSIBLE TO MANAGE
Open L070-MM-METRICS-for-MANAGEMENT
CREDITS and DEBITS of VALUE
ALL THE DIMENSIONS IMPACTING ALL THE CAPITALS
Open L070-CD-CREDITS-and-DEBITS-of-VALUE
What is the PURPOSE of?
SHOULD BE A LOT MORE THAN MORE PROFIT
Open L070-PU-What-is-the-PURPOSE-of
METRICS / ACCOUNTANCY
VERY POWERFUL BUT ONLY ABOUT PROFITS AND FINANCIAL CAPITAL
Open L070-MA-METRICS-ACCOUNTANCY
QUANTIFICATION / NUMBERING
WITHOUT NUMBERS, MANAGEMENT IS IMPOSSIBLE
Open L070-QN-QUANTIFICATION-NUMBERING
UNITS OF ACCOUNT
ECONOMIC VALUE (MONEY) / SOCIAL VALUE / ENVIRONMENTAL VALUE
Open L070-UA-UNITS-OF-ACCOUNT
STANDARD VALUE PROFILES
ANALOGOUS TO STANDARD COSTS
Open L070-SV-STANDARD-VALUE-PROFILE
METRICS / GOALS
A STARTING POINT ... A SMALL PART OF A LONG PROCESS
Open L070-MG-METRICS-GOALS
METRICS for INVESTMENT
ESSENTIAL TO MAINSTREAM IMPACT INVESTMENT
Open L070-MV-METRICS-for-INVESTMENT
TRANSPARENCY and ACCOUNTABILITY
AN IMPORTANT PART OF THE SYSTEM ... BUT VERY WEAK AND INEFFECTIVE
Open L070-TA-TRANSPARENCY-ACCOUNTABILITY
CORE CONCEPTS
FROM ACCOUNTANCY, SCIENCE AND ENGINEERING
Open L0700-TVM-CC-CORE-CONCEPTS

Data at the Center
Data at the Center Better State is Progress
Measure Change in State and you Measure Progress
Beginning of Period STATE -- ACTIVITIES / FLOW -- End of Period STATE
Activity Impacts Capitals
Management is the Art of Making Changes to Achieve Improvement
Collect and Analyze Data to Understand How Things Work
Expand the GOOD ... Eliminate the BAD
Site Navigation
Date at the Center
Data at the Center Better State is Progress

.
Use data to plan and analyze what is working and what is not
... implement improvements as needed
Management is the Art of Making Changes to Achieve Improvement
Collect and Analyze Data to Understand How Things Work
Expand the GOOD ... Eliminate the BAD
.
Measure Change in State and you Measure Progress
Beginning of Period STATE -- ACTIVITIES / FLOW -- End of Period STATE
.
Activity Impacts Capitals
Management is the Art of Making Changes to Achieve Improvement
Collect and Analyze Data to Understand How Things Work
Expand the GOOD ... Eliminate the BAD
.
TRANSPARENCY and ACCOUNTABILITY
METRICS TO MAKE THE WORLD A BETTER PLACE
TRUE VALUE METRICS
image missing Numbering the Triple Bottom Line

Accounting for ALL the Capitals
image missing
Double Entry AccountabilityTM
for PEOPLE, PLANET and PROFIT
for ALL the CAPITALS
for ALL ACTORS and ACTIVITIES
.
PROFIT HAS BEEN A POWERFUL METRIC FOR MANAGEMENT ... BUT VALUE IS A BETTER METRICS
.
THE ESSENCE OF MANAGEMENT
KISS Keep
It
Short, and
Simple
MANAGEMENT IS NOT AN ACADEMIC EXERCISE, NOR A SPECTATOR SPORT
This is not easy
'Short and Simple' is incredibly difficult. Being 'simplistic' is counter-productive. Rather, there has to be a good understanding of how the system works, and what has to happen in order to 'move the needle'.
My experience suggests that 'more and more' data is not very helpful, whereas more and more understanding is very valuable. Getting a more and more accurate 'average' does nothing to change anything, but knowing a lot about incidents of good performance and incidents of bad performance enables action (eliminate incidents of bad performance and replicate good performance) and the average moves in the right direction.
Speed up meaningful feedback, and design data flows so that the process of collecting data also enables real time improvements. Avoid waiting for a complete time consuming analysis loop to implement onvious issues that should be fixed rapidly.

ECONOMIC REPORTING IS EVERYWHERE
Every business on the planet does financial accounting to measure their performance.
Most have audits and many are required to report financial performance

IBM

Microsoft

Oracle

HSBC

Amazon

WalMart
But there is little accounting for social and environmental impacts ... not matter how material
Most social and environmental reporting is about PR and maintaining reputational value
There is more reporting by corporate organizations than any other part of the modern socio-enviro-economic system, but the focus is all about financial performance and the impact for owners / investors. External impacts are ignored in conventional accounting and financial reporting. TVM builds on the existing conventional accounting making it possible to also report on the externalities that impact people, society and the environment.
There are many compliance rules for financial reporting as well as independent auditing to ensure the integrity of the reporting
More and more business organizations are preparing reports relating to corporate social responsibility (CSR) and sustainability, but there is a lack of standardization and meaningful numbering. More than anything else these reports tend to show how small the initiatives related to CSR and sustainability are relative to the scale of the profits.
Most of the reporting by business organizations is 'self-reporting' and also very much self-serving. There is an assumption that more and more profit is a 'good' objective, not matter the other consequences of earning this profit.
The increasingly common practice of reporting about CSR and sustainability has come about in defense of reputation, much more than it is reporting about the tangible amount of 'good' being done for society and the environment.
The main thrust of ESG (Environment. Social and Governance) advocacy is that good ESG will result in enhanced corporate financial value ... but this shows a terrible misunderstanding of the overall dynamic of the socio-enviro-economic system and the nature of value creation in the system.
.
Peter Drucker famously said you manage what you measure ...
Peter Drucker famously said 'You manage what you measure'
This is undoubtedly true ... in the corporate world, the components that go into making profit are measured intensely in order to improve profit performance ... and it works!
Unfortunately, we don't do anything like the same amount of measuring in order to improve society and avoid degrading the environment ... and we don't have any easy way of talking about social performance and environmental performance in the same way that we are able to talk about corporate performance and investment portfolio performance. This has to change
We argue that you had better measure the right things
.



The text being discussed is available at

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TrueValueMetrics (TVM) is an Open Source / Open Knowledge initiative.
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