Date: 2024-10-19 Page is: DBtxt003.php txt00005924
Burgess COMMENTARY
Peter Burgess
Marzena Zukowska • 25 days ago Hello NextBillion, Thank you for hosting this fantastic event! Here is my question for Mr. Bugg-Levine: From my knowledge and experience working at Ashoka Changemakers, measuring impact and obtaining quantifiable results in the social is oftentimes difficult. However, when investors are putting money on line, they want to see progress towards a measurable goal. How can investors and social innovators meet somewhere in the middle? Do you think that the growth of impact investing could be getting us towards that middle ground? Thank you, Marzena Media Manager and Strategist Ashoka Changemakers •Reply•Share › Avatar scottnextbillion • 23 days ago Wow, great discussion! Thanks so much for taking part in NBFI's first Google Hangout, Antony. I had one followup question. When it comes to impact investing funds, the focus seems to be on small and medium sized businesses (SMEs) is that where it needs to stay? And if so, what about smaller, but higher risk types of businesses? •Reply•Share › Avatar PeterBurgess • 5 days ago An interesting interview. Early on Bugg-Levine talks about the need for systemic reform in order to have more impact investing. I was very disappointed, however, in the way he discounted the role of metrics in facilitating systemic change. I reminds of the 1960s and 1970s when senior executives in many corporate organizations did not 'get it' that management information would result in radical reform of the corporate organization and how it was run. I have a passion for management metrics, and I make no apology for this. Good management metrics do not have a net cost to the organization, but produce an important valuadd. The silly metrics that are often implemented do have cost, and do not produce much value. People have got to differentiate between good management metrics and silly metrics ... but in general they do not. Without meaningful metrics about everything that matters, people are going to choose what they want and be inordinately influenced by people who can 'spin a good story' without the data and rigorous metrics that validate the story. I should also observe that a good system of management metrics for society and the economy will serve all the different organizations and structures in a completely agnostic manner. I want to see metrics that help to differentiate using the same system of metrics between the performance of a highly profitable but environmentally disastrous organization on the one hand and the impact of, say, a microfinance investment in a village in Africa, or a health clinic, or a safe potable water supply. I very much like what Bugg-Levine is talking about, and have a lot of respect for what he has accomplished. I only take issue with his position on the relative importance of metrics in the management of society and the economy. Peter Burgess - TrueValueMetrics Multi Dimension Impact Accounting •Edit•Reply•Share › Avatar Antony Bugg-Levine PeterBurgess • 2 days ago Peter, Thanks for the feedback. I did not mean to downplay the importance of metrics. The Global Impact Investing Network, whose Board I chair, has clearly and constantly worked to create an understanding that measuring impact is a prerequisite for any impact investment to be worthy of the name. We have also invested substantial time and effort in developing the Impact Reporting and Investment Standards (http://www.thegiin.org/cgi-bin... to create a standard language for describing and comparing impact measurements. I agree that effective measurement is an important protection against capital and energy being diverted to the most effective story tellers rather than the best problem solvers. None of this is easy and it's great to people like you tackling the metrics question with passion Antony
Burgess Antony Bugg-Levine • 2 hours ago Dear Antony I accept you observation that you had not intent to downplay the importance of metrics. Clearly GIIN is an important player in this space, and I am encouraged by the amount of interest there is in metrics now compared to, say, ten years ago. I have had some modest interaction with GIIN and the IRIS initiative, and recognize that they have done a huge amount of work. I am trying to build on my own experience together with the vast amount of work others have done ... and at the same time trying to apply a rule I used as a CFO many years ago ... the best management information is the least most timely data that ensures that the right decisions get made when they need to be made. This idea also meant least cost data for highest valuadd. I am also passionate about the need for a simple acceptable way to 'number' or quantify important things. Also I want to be able to engage with the entities that have no intent on being held accountable for their behavior while they profit very nicely thank you but in socially and environmentally unacceptable ways. I call my work Multi Dimension Impact Accounting (MDIA). A 2 page brief on Multi Dimension Impact Accounting initiative (MDIA) may be accessed via this URL together with some other resource material: http://www.truevaluemetrics.or... The 2 page brief may also be opened directly via this URL: http://www.truevaluemetrics.or... The biggest challenge to be handled is to establish a widely accepted system of quantification and the actual quantification to be used. I am very comfortable with the idea of standard values since I have used a similar concept in corporate analytical cost accounting very effectively and know how powerful this can be. Obviously 'value' is a different animal, but there are enough similarities for the standard value approach to work. Certainly it will be way better than the 'default to zero' which is the prevailing way important values get treated when there is a conversation about financial and social performance. Peter Burgess - TrueValueMetrics Multi Dimension Impact Accounting