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Date: 2024-05-24 Page is: DBtxt003.php txt00019095

Burgess Connection Dialog
Angelica Lips da Cruz

200628 ... About Management that is Fit For Purpose in the 21st Century

Burgess COMMENTARY

Peter Burgess
About Management that is Fit For Purpose in the 21st Century Angelica ... I don't know where to start. Yes I am in the USA ... many years in the middle of Manhattan and now living in the Poconos of Pennsylvania about 2 hours West of NYC. It is almost 60 years since I finished my formal education ... engineering and economics at Cambridge and professional training as a Chartered Accountant in London. There has been massive progress in engineering since then ... rather less in economics and accountancy !!!!!!!!! I like to think I have learned a lot since I ended my formal education. I have learned something about using data to manage ... not more and more data to have evermore precision, but the least amount of very specific useful data really quickly to actually make the right decisions that will move the needle. Added to this fast feedback so that bad decisions can be rectified before much damage is done. In my corporate career I was always very clear about two different data flows. Summarized data flows up to the Board and to Outsiders to show aggregate performance relatively infrequently. Disaggregated data is pushed down to the lowest possible operating level as meaningfully as possible and as quickly as possible so that operational decisions can be made in a timely way. There should also be a related feedback loop to show progress as fast as possible so further improvements can be made. Some of this exists in well managed companies especially around the dimension of profit performance For companies, I want to see data and metrics to manage social impact and to manage environmental impact. But I also want data and metrics about a lot more than just what the typical for profit company chooses to promulgate. What about the metrics about the progress and performance for all the other actors in socio-enviro-economic system ... for example: Complex for-profit Companies; Simple for-profit Companies; For-profit operations in a single location; Not-for-profit organizations / Churches / Charities ; Communities / Municipalities; Counties / States; Nations; Products; People (individuals); and Households; Accountancy is a very powerful framework for management analysis ... specifically the idea of a balance sheet with assets and liabilities and the profit and loss account with debits (costs) and credits (revenues or benefits) Most people have limited accountancy background and do not understand that the change in the balance sheet during a period and the profit for the same period are the same. This means that progress can be accurately measured simply by looking at the change in the balance sheet and without the need for analysis of the profit and loss accounts which is much more difficult. There is no reason why the sort of balance sheet analysis that is done for economic capital (money accounting) cannot be expanded to included social capital and natural capital ... but it needs a system of numbering. Many of the ideas that already exist in accountancy in respect of complex group accounts can be applied to the sort of enhanced true value accounting that I envisage. Ideas that are used in conventional financial multi-currency accounting can also be applied for use in an enhanced true value accounting system that has separate metrics for economic transaction, environmental impacts and social impacts I said at the beginning that I did not know where to start ... and at this point I should perhaps add that I also don't know when to end. So this is something about an emerging big idea ... that I think is quite close to what you think about as well, and probably with a whole lot more clarity than me !!!!!!!!!!!!!!! With best regards Respectfully PeterB
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