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|Date: 2022-07-07 Page is: DBtxt001.php bk0006050|
The Basic Concepts of True Value Metrics
Sector Specific Perspectives
Sector expertise is important. Activities will be high performance when the best possible sector knowledge is applied. This is not an academic or bureaucratic construct … this is engineering and science and very specific to the sector. Good performance is based on having sector skills that are good.
The performance of society depends on many factors, but, simply put, in essence performance is a function of two things (1) the resources available; and, (2) the way they are used.
The resources available are constrained. The starting point it resources available locally. A second source of resource is external mobilization of resources, which may not be capable of being controlled locally. Resources available is a limiting factor.
But there is also the way resources are used. Good productivity is achieved by using available resources in the best possible way … and it is in this area that sector specific knowledge … know-how … is important.
A pattern that has been observed over a very long time is that performance is best when there are good people with really in-depth knowledge doing practical things throughout the process or value chain. Much of this knowledge is not fully documented … just known because of experience. This know-how cannot be learned in a library … only by doing the work and learning from others who also know the stuff. This knowledge is part of old fashioned apprenticeship programs … and missing from most academic study to the detriment of society.
Linked multisectoral activities
Society is a complex … and a community focus program reduces complexity by getting to a manageable level of scale. We know that productivity in one sector is needed to have productivity in the next sector … and in the end all sectors have to be productive in order for society to be productive. When there is a constraint in one sector … every other sector is faced with constraint to more or lesser degrees. All of this can be taken into consideration in a community focus plan so that local resources can be deployed in the most productive way.
The TVM system has its focus on metrics … not on any of the other aspects of performance including know-how.
The TVM approach may be used in almost any situation to measure performance and productivity … and to understand which set of know-how preforms best. Productivity is the relationship between the amount of resource used and the amount of impact achieved … two measures that are totally independent of the process … independent of the sector.
Someone has to know the relevant best practice in the sector … and decisions have to be made to allocate resources and use best practice. TVM helps to understand performance … but not the know-how per se.
Sector detail has data about people and knowledge, organizations and capacity, and activities associated with the sector. The sector detail also shows where sector activities are being done and where. Another people section pulls together who knows what … because while it is good to know people, what is the point if they do not know what you need to know. People and knowledge are also a component of sector detail.
Part of my academic training in engineering were “labs” where, more than anything else, we learned about measuring things … the calorific value of a fuel, the strength of materials, the efficiency of a system, and so on. There were ways for measuring everything. Some of the methods involved destruction of the subject … but others were non-destructive.
With modern technology, the potential for effective measurement is much better now than when I was being trained and it should be fully utilized.
Sector issues unique to each sector
It is amazing what technology is now available in each and every sector. Not all of the technology is universally useful and improved value analysis would help to make the best use of available technology.
Amazing medical science … but a far less amazing global health sector because the cost and profit characteristics of the sector are out of control. There is a massive need for more healthcare globally using cost effective approaches.
Education has a mixed history with some education excellent and some very poor. Technology has not had a particularly favorable impact on education … and technology may be doing more damage to the human neural system than is presently recognized. There is a massive need for more education globally using cost effective approaches.
Transport technology has improved, but much of the global transport infrastructure is out-dated or seriously deteriorated. Massive investment is needed to upgrade transport infrastructure and equipment.
Tourism is a sector that has potential to be a revenue earner in many poor societies, but the infrastructure is constraining this and in many cases the value adding for the destination communities is weak.
Water may prove to be the source of major conflict in the years ahead. The profligate use of water by the modern industrial society means that increased wealth and related industrialization is going to run up against water limits almost everywhere in the world. Ways to reduce per capita consumption of water is going to be a priority.
Energy shortages have been predicted for a long time, but better technology to locate and extract energy resources have been developed that enable available resources to be exploited very profitably. This avoids the big challenge of long term energy availability especially as major industrial growth accelerates in China, India, Brazil and other emerging economies.
Shelter is a basic need … and inadequate for maybe 2 billion people mainly because suitable shelter is unaffordable for poor people. The issue of poverty and the issue of suitable shelter are closely linked … and have to be incorporated into community development initiatives.
Food is a basic need … and too many people are poor and hungry. Some estimates are that there are perhaps as many as 4.5 billion people who have inadequate nutrition because of poverty. The business model for industrial food and agriculture may not be the best for people although it has been impressive for its raw productivity and business profitability.
Graphic of community balance sheet change
Community balance sheet change is TVM's core metric for progress. The community is where progress dynamics are easier to understand and where measurement has more clarity. Changes in the balance sheet show where there are changes sector by sector? Detailed data will show what activities contributed to progress and which did not!
The community level analysis produces an understandable view of how activities are helping to achieve progress … relative to the resources being used and the decisions being made.
The community is the most important locus of life, so quality of life impact can be monitored and measured more easily at this level. The TVM construct for measuring progress ... the changes in the socio-economic state of the community from the beginning of the period to the end ... applies to every aspect of the community.
The relationship between the starting value state and the later value state depends on the effectiveness of the activities. It is possible to focus on just a part of the community “balance sheet” to analyze and understand something of the progress of the community. The larger complete balance sheet comparison also helps to make it easier to understand what important constraints exist and need to be resolved.
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