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BCG Update

 

Business Roundtable

Including power of employees into the Intangible Balance

Project team with BCG -> more powerful & serious mage as a single mask

The missing part of enterprise map.

Including / inclusive value

Good for employees, opens options for EY, PwC,… (big four) -> the white spot of “GWA” Gemeinwohl Analyse (Mc Kinsey)

IGL -> Instants Graphics Landing (?) for finding people value

 

NZZ Schwarz gibt Bericht

Eigentlich ist es eine Philosophie (und die ist nicht neu)
-> Diese gibt einen Rahmen für die Orientierung
Wenn es um die Umsetzung geht, braucht es (a) ein ganzheitliches Orientierungsmodell, in dem die verschiedenen Rahmenbedingungen erscheinen und (b) eine Metrik, mit der die Elemente aus dem Orientierungsmodell rational messbar, planbar und nachvollziehbar erfasst werden können.

Dummerweise stammt der klassische Rahmen für die Orientierung noch aus der vorindustrialisierten Welt. Einer Zeit der Sklaven und der Hexenverbrennungen.

 

Martin Reeves -> YouTube https://www.youtube.com/results?search_query=%22Martin+reeves%22

 

 

What happened:

IVSC Aug 15 – Deloitte. Building a global approach to valuation using IVS - https://www.ivsc.org/news/article/professional-insight-integrating-ivs-within-deloitte-s-global-approach-to-valuation

Business Roundtable Aug 19: Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Americans’ – https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans

FastCompany Aug 22 – Don’t believe the Business Roundtable has changed until its CEOs’ actions match their words - https://www.fastcompany.com/90393303/dont-believe-the-business-roundtable-has-changed-until-its-ceos-actions-match-their-words

INEQUALITY Aug 23 – Has the Business Roundtable Really Seen the Light? - https://inequality.org/research/has-business-roundtable-seen-light/

B Corporation answers to BRT Aug 25  – Let’s get to work - https://bthechange.com/dear-business-roundtable-ceos-lets-get-to-work-25f06457738c

BCG Henderson Institute Aug 30 – INSIGHTS on the Purpose of the Corporation (Mail)

HBR Aug 30 – Is the Business Roundtable Statement Just Empty Rhetoric? - https://hbr.org/2019/08/is-the-business-roundtable-statement-just-empty-rhetoric

CFO Technology (BCG) Sept 02 – Transformation Requires a Scientific Approach - https://www.cfo.com/technology/2019/09/transformation-requires-a-scientific-approach/

IVSC Sept 04 – Is Goodwill a Wasting Asset? Looking at the topic from a valuers perspective. - https://www.ivsc.org/news/article/is-goodwill-a-wasting-asset

 

 

 

Optimize for Both Social and Business Value

Improve Scorekeeping and Increase Transparency

(Page 7) Managers will need new scorecards[1] for fuller equation of business value[2] … assess and reward performance[3] … inform decision making[4].
Scorecards and reporting must go beyond mapping general ESG materiality[5] … insightful metrics[6] that directly connect purpose[7] & business model[8] to the way company creates differentiated value[9] and societal impact[10] – its full business value (FBV)[11].
These metrics[6] will assess performance[3] throughout the value chain[12] from procuring inputs to post-use cycle… to company’s full societal footprint[13].
As with financial performance[14], good companies will integrate these metrics into their managerial software – operating plans… target settings… investment decisions… executive compensation… employee recognition… radical transparency of its FBV scorecards…[15] reflecting in… investor relations, corporate communications, quarterly calls, annual meetings… making them integral to marketing, social media, public relations, government affairs.
Result: stakeholders will see company in new ways + advantage to peers on new dimensions.

Lead a Purpose-Filled Organization

(Page 7) … rethinking skills[16] and capabilities[17] … differentiate performance on both – financial and societal metrics[6]. … to be fully integrated into operations and decision making[15]. … requires augmenting line businesses with nontraditional business skills[18] … systems thinking… anthropology… behavioral economics… sustainability… development policy… new ways of working…

Elevate Board Governance[19]

(Page 8) Boards need to build new capacity to … full role corporation will play in society.
… current management … focused on financial performance … with social & sustainable sidelines
… new era of business … CEO accountable for financial, environmental, societal performance
Boards to be educated on societal needs, SDGs…
need to restructure committees, oversight on social performance…
must challenge long-held views about…
boundaries & time horizons of business… what makes a good CEO… new risks and rights to operate… measuring performance… expand view of managerial beyond the ability to hit annual business targets… building a more resilient and adaptable company that delivers for share-holders and society even at the expense of short-term financial performance.

…reconceive business… commit to purpose… pursue sustainable business model innovation… opens up… new opportunities for growth, shareholder value… benefits to society and planet.
… either wait or proactively ‘reinvent company’… reshape the industry… propel the stock… deliver remarkable impact… leave notable legacy of corporate public good.

 

 

 

Annotations

[1] Scorecards -> Scoremaps (Vector) Easier to get a common (value, risk…) perspective about same topic with several dimensions. Vector is useful for graphical arithmetic to see the same picture. (With ‘Spider’ it is not possible to ‘add’ and ‘subtract’.)

[2] Definition of Business Value -> short term, long term, monetary, nonmonetary…

[3] performance -> multi-dimensional (societal, financial)

[4] Decision making -> common understanding of real reality and perspectives -> same picture/visualization

[5] beyond mapping general ESG materiality -> multi objects, multi metrics…

[6] metrics -> from normative to letters to linear numbers to vectors…, societal, financial…

[7] purpose

[8] business model -> 3 enterprise levels (base/resources – processes – offerings)

[9] value -> multi-dimensional, objective, subjective

[10] impact -> plus, minus, indifferent

[11] full Business Value (FBV) -> meaning?

[12] value chain -> [B] Value Creating Net (of enterprises/departments)

[13] societal footprint

[14] financial performance

[15] integrate (new) metrics in managerial software… the whole system + communication… -> yes

[16] skills = knowledge + experience

[17] capabilities -> meaning?

[18] nontraditional business skills -> new dimensions, cracked paradigms… self-explainable

[19] Elevate Board Governance -> new map, framework, techniques -> enhancing logic, framework, transparency, reasoning, visibility of assets/resources -> enabling common language/view for strategic and operational work…

 

 

 

 

[A] Alte finanzperspektive – what’s missing – combination

 

 

 

 

 

 

 

 

[B] Value Creating Net (of enterprises/departments)
Helpful for planning and realizing the processes of cross-company value creation networks at the levels 'Company', 'Offerings' and 'Resources'.

 

 

 

 

 

 

 

 

 

 

 

 

Business Engineering Systems

1.       Basics

1.1   4 worlds
World 1 = The real world (tangible, intangible)
World 2 = The world of experiences (intangible, subjective)
World 3 = The world of explanations (form = tangible, content = intangible)
World 4 = The world of law – legal and paralegal (Form/Text, interpretation)

1.2   Explained worlds
Explaining how the real-world works is an endeavor since people started to think about ‘World 1’. It’s a never-ending story of ‘new’ insights and explanations (right, wrong, useful, dangerous…) in- and outside of schools. Now classified in several specialized fields – with ‘experts’. Link Branches of Science
One must distinguish between form and content - appearance and meaning.
Explanations and teachings are instructions to the human mind. They influence our way of understanding, logically reasoning, planning and shaping World 1.
If you can so say, they basically have the same function as the operating system and application software in computers.

1.3   Scientific Innovation (Kuhn)
Progress of scientific insights follows mostly at an iterative path. However, from time to time we face ‘quantum leaps’ to a new level of scientific insights following ‘Crises in Reality’ because explanation models are failing.
See Thomas Kuhn ‘The Structure of Scientific Revolutions’ 1962 – link PDF

Animated gif: https://bengin.net/images/scientific_innovation_kuhn_e.gif
Download pdf: https://bengin.net/permalink/scientific_innovation_kuhn_e.pdf

 

1.4   Innovation (Techniques and Technologies)
A ‘technique’ is a way of carrying out a particular task or a set of rules, standards or protocols (planning, reading, teaching, accounting…)
A ‘technology’ is a way of carrying out a particular task using ‘techniques and objects’ that usually involves insights from ‘physical sciences’ (industrially engineered solutions...).
‘Innovation’ is the result of an innovation process started with an idea, an invention.
Three phases:
1. Incubation needs 70%, 2. Invention needs 25%, 3. Innovation needs 5% of time.

Most people associate the word ‘innovation’ with ‘technological innovation’. Like new computers, smart phones, AI (Artificial Intelligence), electric cars…
But this is only one dimension of innovating – even if most papers are full of this dimension.
Innovation in techniques is another type of innovation that influences our live and behavior. Like new rules of taxes, reading techniques, mathematical techniques, decision making/rules, standards and rules of accounting, economics, Business Administration, management techniques…

 

1.5   Innovation in economics
Economics understood as a product of mind – ‘Instruction to the human Mind’. As economics is deeply rooted in our decision and reasoning process as managers it is essential that we use the best of the available economic models and rules.
Because the standard economics has a trackback to 1773? When Adam Smith published his ‘Wealth of Nations’ – laying the base – there is no doubt that the base of this approach has to be rethought.

https://bengin.net/nemo/bei_e.html

 

1.6   Enterprise 3D, three levels

https://bengin.net/bes/3lstructure_e.html

 

1.7   Metrics linear, 2D

https://bengin.net/bes/metrics_development_e.html
There are a lot of conflicting meanings and theories around metrics and measuring.

 

1.8   Value – subjective property

 

1.9   Values (mapping and measuring)

 

2.       Combined Applications

2.1   Strategies

 

2.2   Value-added network

 

 

Zusatz Bemerkungen

 

Problem is that – for example – the CEO cannot order from the staff to make a balance of intangible assets, because it does not exist in economics. Just because such a balance doesn’t exist in economics.
Analogue problem exists for the meaning of the word ‘value’ (Subjective? Objective? Both?) and its metric (Monetary? Non-Monetary? Hybrid/Vector?).

 

The value of visibility…