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Burgess COMMENTARY

Peter Burgess

Jack Welch was successful using the prevailing system of metrics (1) money profit; (2) stockholder value; and, (3) growth. The fact that the metrics are unhelpful for society as a whole and for sustainability, resilience, the economy as a whole, etc., etc. is not something that concerned Jack Welch, and has not been a pressing issue for anyone in financial or business leadership at any time in the last fifty years. I would have like a professional organization like the accountancy profession to take up the issue, but from my perspective they dropped the ball on almost everything sometime in the 1980s ... a long time ago. The idea of something like Capitalism 2.0 is fine ... but in my view it needs to have new metrics as part of its core. The metrics that are needed have to be as rigorous about impact on people and planet as money profit accounting is around money transactions. Measuring intention about impact is not enough. There has to be measurement of actual performance. I also argue that the center or metrics has to move from the organization to society ... a place ... where everything comes together for good or for bad. In addition there needs to be accountability around what happens with products as they go from the beginning of the supply chain, through various buy or not to buy decisions, through use, and eventually into a waste chain. A system of metrics that is efficient and effective will probably use the wonderful double entry accounting construct of balance sheet (state) and operating statement ... profit and loss account (progress) to measure and report on progress and performance in all its dimensions. This is all possible with the technology we now have available ... and I am increasingly optimistic something like this will emerge as a practical solution for accountancy 2.0 in the relatively near future. Peter Burgess TrueValueMetrics