METRICS MATTER ... AN INTRODUCTION TO TRUE VALUE ACCOUNTING
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METRICS really do matter. Conventional accounting is very powerful, but it only addresses the matter of transactions where money is the measure, while ignoring everything else, including all externalities and some very important aspects of quality of life and stress on the environment. This slideset introduces TRUE VALUE ACCOUNTING to facilitate easier low cost integrated reporting.
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METRICS MATTER ... AN INTRODUCTION TO TRUE VALUE ACCOUNTING
- 1. TRUE VALUE ACCOUNTING File: TVA-p3-01-METRICS-MATTER-Introduction-to-TVA-151102.odp Peter Burgess (c) All rights reserved Metrics Matter Introduction to True Value Accounting a TrueValueMetrics Initiative
- 2. CONTEXT This slideset is a Work-in-Progress and will be updated from time to time. It is part of a series that aims to describe the extremely complex socio-enviro-economic system that we live in, and how better metrics will make this system work better. TRUE VALUE ACCOUNTING
- 3. TRUE VALUE ACCOUNTING File: MDIA-p3-0-TVA-INTRODUCTION-150912.odp Peter Burgess (c) All rights reserved Peter Drucker, a well known management guru famously said: “You can't manage what you don't measure”
- 4. Metrics are VERY powerful, but they must be used to measure the right things in order to get the right results. TRUE VALUE ACCOUNTING
- 5. Modern KNOWLEDGE of science and technology is amazing … but in contrast the performance of society leaves much to be desired TRUE VALUE ACCOUNTING More on KNOWLEDGE … http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#7
- 6. There are hundreds, if not thousands of ISSUES to be addressed … TRUE VALUE ACCOUNTING More on ISSUES … http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#11
- 7. There are many IDEAS and INITIATIVES … but very few gets much traction … TRUE VALUE ACCOUNTING More on IDEAS and INITIATIVES … http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#10
- 8. True Value Accounting is an initiative to address the issue of ineffective metrics for important things like happiness and sustainability. TRUE VALUE ACCOUNTING
- 9. GDP growth, corporate profit and stock market rise are metrics that might be good for investors, but ignore almost all the things that really matter … TRUE VALUE ACCOUNTING
- 10. … and MONEY as the Unit of Measure is another source of systemic dysfunction … TRUE VALUE ACCOUNTING More on money and the financial economy … http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#4
- 13. So … every time something big happens, the money measure that we routinely use changes in size … there has to be a better way! TRUE VALUE ACCOUNTING
- 14. In the modern world, money is the most important metric for policy formulation, decision making and performance measurement … yet it is changing size all the time ... TRUE VALUE ACCOUNTING
- 15. Worse … macro-economic measures, conventional accounting, and financial analysis ignore far too many things that really matter … TRUE VALUE ACCOUNTING
- 16. PEOPLE matter … The true purpose of economic activity is to enable a high standard of living and a good quality of life for people … TRUE VALUE ACCOUNTING More on the PEOPLE economy … http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#2
- 17. PEOPLE also matter because it is human energy and intellect that has enabled the progress of humankind over the millennia and is ongoing … TRUE VALUE ACCOUNTING
- 18. PEOPLE are going to make important decisions about what will happen in the future … though NATURAL LAWS are going to be the ultimate determinant of the outcomes. TRUE VALUE ACCOUNTING
- 19. PRODUCTS … goods and services ... satisfy PEOPLE's needs. They link People, Man Built Capital and the Natural Capital of the system TRUE VALUE ACCOUNTING More on PRODUCTS … the consumption economy … http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#6
- 20. PROCESS makes PRODUCTS. Efficiency of processes is a factor in the live cycle impact of products. TRUE VALUE ACCOUNTING More on PROCESS … the technology of the economy … http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#5
- 21. PLACE matters … People live in a place Companies have factories in a place Pollution happens in a place Eco-system services are in a place Place is good for accountability Place is for ever TRUE VALUE ACCOUNTING More on PLACE … http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#9
- 22. NATURE matters … it is the foundation for everything … all WEALTH has its origin in the Natural Capital that there is on this PLANET. TRUE VALUE ACCOUNTING More on NATURAL CAPITAL … http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#3
- 23. SUSTAINABILITY is a lot more than a fashionable phrase … without NATURE's services, human life as we know it will end … TRUE VALUE ACCOUNTING More on SUSTAINABILITY … http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#3A
- 24. GOVERNANCE and the Enabling Environment of Law, Security, Companies, Banks, Institutions, Universities, etc. are important … TRUE VALUE ACCOUNTING More on GOVERNANCE and the Enabling Environment http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#8
- 25. COMPANIES have an ability to amazing things … the challenge is for this capacity to be used so ALL stakeholders benefit. TRUE VALUE ACCOUNTING More on COMPANIES … http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#8A
- 26. The Enabling Environment also includes PHYSICAL INFRASTRUCTURE and essential services TRUE VALUE ACCOUNTING More on INFRASTRUCTURE ... http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#5B
- 27. TRUE VALUE ACCOUNTING is an initiative to put metrics around all of these things … around everything that is important … TRUE VALUE ACCOUNTING More on metrics for management … http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#1
- 28. The essential characteristic of a good unit of measure is that it is always the same … In the USA, the National Institute for Standards and Technology (NIST) is an authority in this regard … see: http://physics.nist.gov/cuu/Units/current.html TRUE VALUE ACCOUNTING
- 29. TVA is an an extension of conventional double entry accounting and uses many of the established principles … TRUE VALUE ACCOUNTING
- 30. TVA does for Society, the Environment and the Future what prevailing metrics have done so well for investors and those engaged in banking and finance. TRUE VALUE ACCOUNTING
- 31. REMINDER This slideset is A WORK-IN-PROGRESS. It will be upgraded periodically. It is part of a series of more than 100 slidesets. Navigation to these is available here: FEEDBACK is welcome. Please email to Peter Burgess … peterbnyc@gmail.com … with a catchy phrase in the subject line so that it gets attention, and please identify the specific slideset(s) involved. http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=N1-Slidesets-p3 TRUE VALUE ACCOUNTING
- 32. THANK YOU Some links and contact information: Email Peter Burgess … peterbnyc@gmail.com Peter Burgess LinkedIn profile https://www.linkedin.com/in/peterburgess1 Link to TrueValueMetrics.org website http://www.truevaluemetrics.org/ Link to navigation to other resources: http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#1 TRUE VALUE ACCOUNTING