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Date: 2019-01-23 Page is: DBtxt001.php L0700-TVM-PP-Measuring-Progress

ABOUT TVM
MEASURING PROGRESS


ACTIVITIES DELIVER RESULTS
Details of activities are not needed to measure PROGRESS

PROGRESS is the increase in VALUE (of the STATE) from beginning to end of the period

Simply measure the change in the VALUE or everything

The Relationship Between Original State, Period Activities and New State


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)
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.
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.
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.
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 conventional financial wealth has come 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.

Instead of thinking about STATE as a single capital, STATE is ALL the capitals
This image was created in 2012 relatively early in the development of TVM. The core concept remains the same, though the naming has been changed so as to conform more with other initiatives.
STATE at the Beginning of the Period (BOP) is changed by the PROCESS or ACTIVITIES to become the State at the End of the Period (EOP)
In this graphic ALL the CAPITAL has been segmented thus:
(1) Financial Capital ... Created Financial Capital
(2) Human Capital ... Human Capital and Social Capital
(3) Man Built Capital ... Created Physical Capital and Created Intangible Capital
(4) Natural Capital
(5) Sun ... the main source of energy for planet earth
The segmentation of capital has evolved and as of now (August 2018) is as follows:
(1) Financial Capital ... part of Economic Capital (EC)
(2) Human Capital ... now referred to as Social Capital
... ... includes Human Capital and Relationship Capital
(3) Man Built Capital ... now referred to as Economic Capital
... ... includes Financial Capital, Physical Capital and Intangible Capital
(4) Natural Capital
(5) Sun ... the main source of energy for planet earth
More on CAPITALS see L0700-CC-CAPITALS Open L0700-CC-CAPITALS



The text being discussed is available at


TrueValueMetrics (TVM) is an Open Source / Open Knowledge initiative.
It has been funded by family and friends plus donations from well wishers who understand the importance of accountability and getting the management metrics right.
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