TrueValueMetrics ... Impact Accounting for the 21st Century


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Date: 2024-06-30 Page is: DBtxt001.php L0700-TVM-MM-the-TVM-diagrams-01a

TVM MANAGEMENT METRICS
METRICS TO MAKE THE WORLD A BETTER PLACE
Key Enhancements to Conventional Financial Accounting

Profit is the dominant metric for corporate management.
Social and Environmental values must also be in play.
Corporates are NOT the only actors
Everyone has a role to play. All must be accountable.

There is more reporting by corporate organizations than any other part of the modern socio-enviro-economic system, but the focus is all about financial performance and the impact for owners / investors. External impacts are ignored in conventional accounting and financial reporting. TVM builds on the existing conventional accounting making it possible to also report on the externalities that impact people, society and the environment.

BETTER ACCOUNTING AND ACCOUNTABILITY IS NEEDED

Conventional financial accountancy should he the starting point.
It should not be limited as it is today to focus on informing investors about corporate performance
Rather is should be enhanced so that there is reporting about ALL activities and actors so that everyone is accountable in a useful meaningful way.

THE ESSENCE OF EFFECTIVE MANAGEMENT
KISS	Keep It Short, and Simple	MANAGEMENT IS NOT AN ACADEMIC EXERCISE, NOR A SPECTATOR SPORT
This is not easy 'Short and Simple' is incredibly difficult. Being 'simplistic' is counter-productive. Rather, there has to be a good understanding of how the system works, and what has to happen in order to 'move the needle'. My experience suggests that 'more and more' data is not very helpful, whereas more and more understanding is very valuable. Getting a more and more accurate 'average' does nothing to change anything, but knowing a lot about incidents of good performance and incidents of bad performance enables action (eliminate incidents of bad performance and replicate good performance) and the average moves in the right direction. Speed up meaningful feedback, and design data flows so that the process of collecting data also enables real time improvements. Avoid waiting for a complete time consuming analysis loop to implement onvious issues that should be fixed rapidly.

Measure Change in State and you Measure Progress

Beginning of Period STATE -- ACTIVITIES / FLOW -- End of Period STATE

Management is the Art of Making Changes to Achieve Improvement Collect and Analyze Data to Understand How Things Work Expand the GOOD ... Eliminate the BAD More and More Data and Analysis is not Better Management
Data at the Center	Measuring Progress	Activities Change State	Enhanced Accountancy

Data at the Center

Data at the Center	Better State is Progress

Activity Impacts Capitals

Management is the Art of Making Changes to Achieve Improvement
Collect and Analyze Data to Understand How Things Work
Expand the GOOD ... Eliminate the BAD
Use data to plan and analyze what is working and what is not
... implement improvements as needed

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TrueValueMetrics (TVM) is an Open Source / Open Knowledge initiative. It has been funded by family and friends. TVM is a 'big idea' that has the potential to be a game changer. The goal is for it to remain an open access initiative.

WE WANT TO MAINTAIN AN OPEN KNOWLEDGE MODEL		A MODEST DONATION WILL HELP MAKE THAT HAPPEN
The information on this website may only be used for socio-enviro-economic performance analysis, education and limited low profit purposes Copyright © 2005-2021 Peter Burgess. All rights reserved.