Dear Andrew
Just a (not so) short note to let you know how much I enjoyed your talk at FDU on Friday, and also my homework over this weekend reading The Big Pivot.
I had a fast track career in the USA for a number of years as a corporate 'management accountant'. I was educated as an engineer, then did economics, and only after all of this learned to be an accountant (Chartered Accountant with Coopers in London). I came to North America and was something of a 'turnaround specialist'. My success was mainly a result of using the right set of numbers to change behavior inside the corporate organization ... numbers that also resulted in the profit performance getting better at the same time.
Later on I tried to apply this same sort of approach in the work that was being done by the World Bank, the United Nations and others around the world. While this was incredibly interesting, it was frustrating because these institutions had no framework for effective performance analysis ... and a level of financial sloppiness that has enabled mega corruption. This part of my career did not go well ... but at the end of the day, I maintained my integrity.
Your work is very exciting. In my view there has been a sea change in the behavior of CEOs in the last few years, and that is very encouraging. I argue, however, that they will not be able to move the totality of their organizations very much unless that are able to get both the CFO and the whole of their internal management information systems aligned with the comprehensive business reform that they talk about.
In the old days I used to use standard costs to make financial accounting relevant in the factory. Today I want to use standard values to make it possible to integrate impact into the conventional financial management accounting.
But I see the need to do something more than this. The universal focus on corporate performance because better profits will product a better society is fatally flawed. I see a world full of issues that need investment, but, though they will produce huge increments in quality of life, they will produce rather little in the way of conventional profit. Benefit to people, rather than profit for the corporation should be at the center of economic activity and analysis. In addition the betterment for people should be done at the minimum impact to resources and the environment. This should be the center of everything.
The corporate enterprise has an enormous role ... but it is secondary to people, not primary. The corporate organization has the potential to do almost everything with more efficiency than other structures ... but the purpose should be clear.
The role of the corporate organizations in the United States in lowering the standard of living and quality of life for most Americans is something I find disconcerting. How this has happened is not well understood ... but maximizing profit at the expense of everything else has had a big role in getting to this situation. Perhaps worse is the role the corporate community has had in bankrupting the nation ... not the government, but the country. It is a catastrophe that has already happened, and little understood.
Again ... thanks for a good presentation, and a good read.
Whether I will be able to get any traction for some radical reform in the area of metrics is still and open question. I am trying!
Peter
____________
Peter Burgess
TrueValueMetrics ... Meaningful Metrics for a Smart Society
Multi Dimension Impact Accounting
http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=txt20080001
linkedIn: www.linkedin.com/in/peterburgess1/
twitter: @truevaluemetric @peterbnyc
mobile: 212 744 6469 landline 570 431 4385
email: peterbnyc@gmail.com
skype: peterburgessnyc
|
The text being discussed is available at
|
