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Date: 2025-07-02 Page is: DBtxt003.php txt00026113
MANAGEMENT CONCEPTS
VALUE DESTRUCTION

Value Destroying Projects



Peter Burgess COMMENTARY
I circulated the image above more than 30 years ago when I was doing consulting work in the world of 'development' and 'humanitarian assistance' for the World Bank, the United Nations and others. It was circulated with the following commentary:
The graphic above atttempts to show the huge potential for value add when a project does important work like:
  • Looking after orphans
  • Care giving
  • Infrastructure
and also shows the almost total waste that is associated with work that involves:
  • Studies with no action
  • Education with no job opportunity
The international development assistance community has been badly managed for a very long time. While many of the people actually doing the work are highly motivated and good people, the system they are working with has huge deficiencies.
The issues I was working to address back then remain issues now and it would seem that the world is no closer to solving big global problems today than those many years ago.

I am coming back to revisit some of the assumptions that I have been making while taking in the massive amount of information that is circulating in the modern world. On the face of it, many of the problems are bigger and more out-of-control than they were in the 1980s ... but is this true?

In the modern world with an ubiquitous Internet it is difficult for most people to differentiate between valid news that is fact based and all sorts of 'fake news' that is circulating for all sorts of more or less nefarious purposes.

The corporate world is communicating massively to sell its products and services and boosts its stock price.

The players in the political world are doing much the same to promote their own world view and destabilise their opponents. This can be very dangerous and is coming in from many directions.

While all of this is going on, there is a real world that in many ways is significantly better than the world has ever been in all its history.

Getting to this conclusion based simply on the flow of daily news cannot happen. Mostly the daily news is nothing more than a series of horror stories that get attention in ways that 'feel good' stories cannot compete. Not surprisingly, the 'takeaway' is that the world is falling apart which is less true at the present time than it has been at any time in the past.

Now that does not mean that I am 'satisfied' with progress and the present state of the world. In fact I am really quite disgusted with the state of the modern world.

My thinking is simple .. the quality of life for the people who inhabit this world at the present time could be so much better if the world's leaders were significantly more competent and decent! Too many people in positions of power and influence ... that is decision making power ... are gaming the system for their own benefit.

When the world is looked at through a lens and light that exposes cost, price and value it becomes glaringly clear that the system has been optimising for profit not value for the last several decades. I call this the financialization of the economy which has been very successful but coming at the expense of society and the environment.

This is not sustainable and it has become more and more apparent in the last few years that the environment is going into a serious phase of unsustainable degradation that money and profit simply cannot offset.

And the rich and powerful really don't seem very interested in the declining wealth of almost everyone on the planet except themselves. This is I believe a reality but it is also a manifestation of insanity which will likely be problematic quite soon ... and likely in some parts of the world, this year!

I have some optimism because we have amazing technology to address all sorts of big issues. My pessimism is that too many leaders are not up to the job and the realities they need to face!

This said ... America has huge potential to be on the right side of history, but this is by no means assured and there are many dark forces that are going to get deployed this year! I am, however, encouraged that President Biden and his team have done more than most with political power to use political capital to promote important policy initiatives, many of which are decades overdue.

I have concluded that in order to get the leaders of the world to make better decisions, there has to be a far better system for holding powerful people accountable for the decisions they take. I think it is fair to say that accountants in the Victorian era were given a mandate to report objectively on corporate behavior so that business managers would not be allowed to lie about the performance and the possibilities of their business. This is the ongoing mandate that modern accountants and auditors still follow. I think it is fair to say that this mandate should be modernised better to suit the modern world.

Sadly reform like this does not seem to be on the accounting professions wish list ... rather there seems to be active 'push-back!'
Peter Burgess


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