OPTIMIZE FOR BOTH SOCIAL AND BUSINESS VALUE
BCG (Henderson Institute) did an excellent overview about the journey to the next economy
As we approach a new decade, we are also approaching a tipping point for business, with new benchmarks for what constitutes a good company, a good investment, and a good leader. The defining expectation: good companies and investments will deliver competitive financial returns while helping society meet its biggest challenges, and in so doing will enable sustainable business.
Strong financial performance is critical, but stakeholders increasingly expect companies to use their resources and capabilities for a higher purpose: addressing the urgent issues society faces. The business of business can no longer be just business.
And your management toolset has to enable this new development.
BCG (Henderson) framed the journey to new corporate value around six imperatives.
1. Reimagine Corporate Strategy
2. Transform Business Models
3. Improve Scorekeeping and Increase Transparency
4. Lead a Purpose-Filled Organization
5. Practice Corporate Statemanship
6. Elevate Board Governance
Connects the perspectives offered by BCG with the solutions available in the 'Business Engineering Systems'.
The "Business Engineering Systems" is a set of new instruments to get (i) insights in a smart economy and (ii) helps to design a sustainable future combining social and business view.
And it's compatible with classic view - but without old limits.
Click on image opens a new webpage with linked pictures for further informations.
'BES' eliminates several 'systemic failures', 'left-outs' and 'mental cages' of the 200 years old economics - enables designing a more inclusive strategy for sustainable operations.
Some features:
- 3D model of enterprise
- includes tangible and intangible resources
- cracks old monetary value paradigm
- bridges strategic and operational view
- fits to any smart enterprise/nation
Three steps:
1. Old Business Administration Map (the accountants')
2. ... chart what's missing...
3. ...and combine it.
Want to see more? Download final net as pdf.
Three steps:
1) Combine Stock exchange, accounting and its link
2) How does share price link to enterprise value?
c) Show where the values really are
Introducing balance and P&L for intangible assets and 'SPE' for shareholder Profit expectation. Clears perspective and reasoning for short and long term value.
Want to see more? Download final chart as pdf.
The 'Business Engineering System' is a professionally developed next Generation MindWare for the design of smart social systems (R&D > CHF 6 Mio.).
It is a proprietary system with registered copyright. And it's free for private use. Professional use (consulting, teaching, programming) requires an appropriate license which helps us in financing the development (basics, applications and platform). Ask for options.
MEASURE Well-Being to Improve It
Multiple disruptive forces—the rapid pace of technological change and its potential contribution to inequality chief among them—pose critical challenges to governments around the world. It is more important than ever for governments to develop and implement strategies that take that disruption into account and aim to improve the lives of citizens.
Boston Consulting Group’s Sustainable Economic Development Assessment (SEDA) can be a powerful tool in this effort. BCG created SEDA in 2012 to track the relative well-being of a country’s citizens and to provide insight into how well a country converts its wealth into well-being. (See “A Yardstick for Well-Being.”) The development of SEDA was a response to the growing consensus that gross domestic product (GDP) is a limited metric for assessing a country’s performance; the tool built on the work of prominent economists and international organizations to broaden the lens beyond economic indicators.
This chart shows the 25 Global Powerhouses - GDP on the left and population on the right side.
It is however difficult to combine this two information in a one and only number to get a ranking.
Using a vector based metric and visualization helps to get a clear view about their state and future development (see below).
Shows whole picture for faster interpretation, optimization and sustainable decision making.
One of the components is an enhanced metric system that allows to visualize the relationships of several measures (objective, subjective) for different object as vektors. It's much more convenient to get the essence of any audit (with correlations) and to get the message forward.
For more basics and applications go to Measuring Performance in a Knowledge Economy
This chart combines GDP with Population of ten Powerhouses (mentioned above).
Anyone who looks at this picture has the same impression the performance and risks this Powerhouses face, can imagine their strategy and estimate the risk.
Try it yourself: Download Excel here.
The 'Business Engineering System' is a professionally developed next Generation MindWare for the design of smart social systems (R&D > CHF 6 Mio.).
It is a proprietary system with registered copyright. And it's free for private use. Professional use (consulting, teaching, programming) requires an appropriate license which helps us in financing the development (basics, applications and platform). Ask for options.
Purpose of 'Project NEMO' (New/Next Economic Model) is to enhance classic economics by
(i) including intangible assets as the common source of welfare and wealth and
(ii) disclosing a vector based value enabling monetary AND nonmonetary as a compound/hybrid measure.