Definitions for TrueValueMetrics
A sustainable future is not assured ... and increasingly modern technology and social and economic activities put stress on the future. The future was never assured in the history of mankind, but the risks have changed. In the distant past, it was the capacity to produce that was the key constraint. In the present time, there is power to produce, but it is possible for this same power to do damage that must also be managed.
TVM builds on what exists and has gone before ... no need to reinvent the wheel. What TVM does, more than anything else is to position data and analysis where they are able to do the most good ... that is at the community level, and for the community. Beyond economics and accountancy, TVM is a fusion of key principles from science, engineering, management and human behavior. The key characteristics of engineering that are incorporated into TVM come mainly from engineering thermodynamics, control theory, hydraulics and aerodynamics. Ideas from the area of management relate to how get knowledge converted into value. Ideas from human behavior are included because, if not, the chance of anything being of value is very much diminished.
Sustainability is a fashionable idea ... but with many meanings. One is that sustainability is to do with damage being done to the environment by the human race ... and the issues of the survival of our specie. Another is more pedestrian relating to the ability of a person or an organization to have enough financial resources to pay its bills and survive economically. One view of sustainability relates to the environment. Are economic activities doing excessive environmental damage or consuming too much of resources?
There are two components to sustainability. There are some very successful business people that consider cash flow to be king ... with good reason. A business that has cash is in control of its destiny! For these business people profit is a source of cash ... and cash is a source of strategic strength. Nothing is sustainable when the bills cannot get paid.
Another dimension of sustainability is the issue of value adding and value destruction. It is possible to have a favorable cash flow, but to be destroying value ... and in time, value destruction is worse than simply not being able to pay the bills.
Activities that have value adding positive and cash flow being positive are sustainable ... and desirable.
Activities that are cash flow positive and profitable are money sustainable but maybe not socio-economically sustainable ... and these activities have come to dominate rich developed economies in the post World War II period. By ignoring critical issues of value destruction society had the impression of wealth being created ... but much was mere puffery and the balloons were bound to break. But worse, society built the appearance of wealth while setting the stage for potentially catastrophic global disasters in the future.