Wednesday, May 5, 2010

Social Performance Management (SPM) needs the CA perspective!

Dear Colleagues

Social Performance Management (SPM) initiatives are becoming widespread and are increasingly in play in the microfinance subsector. This is a website that shows some of this: However, I have concluded that the way these initiatives are progressing is counterproductive ... no matter how much money is consumed, at the end, the dataflow will not be of much value. Something very different is needed so that there is the management information needed for effective decision making.

This is feedback that I have given to the SPM Network in response to their request. I am not being particularly polite!
Dear Colleagues

I don't know whether my feedback will be useful or not. My impression of the modern web world is that there is a whole lot of talk (outbound messages) ... and very little listening and two way communication (inbound messages that get read and associated subsequent dialog). This is a terrible consumption of time and effort.

Worse ... the solution used to reduce some of this data overload is to further computerize the problem ... so that human interaction and its potentially valuable analysis of complex ideas gets even further removed from the web dataflows.

Frankly, this is a problem that was addressed by the accountancy profession a very long time ago. Business has a very large number of transactions, but the performance of a business is easily summarized into a few important datapoints. This is a brilliant concept, now some 400 years old and still very relevant. Even though business management information is highly computerized, this basic concept is still central to how accountancy is done!

Two big things have gone wrong with economic progress and performance metrics over the past fifty years (1) the money profit accounting system has been compromised by law and regulation to suit special interests; and, (2) too little has been done to ensure that the system of metrics embraces important aspects of social value and the commons.

Obviously SPM initiative is doing something to address the latter ... but not, in my view, in a way that will be very effective. There are many reasons for this conclusion ... most important being the idea that socio-economic progress is determined not by one thing or one organization but by everything and by ALL the organizations in society. There needs to be "accounting" for value as well as for money ... and this accounting has to be done with the community as the "reporting entity"!

Nobody in corporate accountancy would dream of doing the accounting for one department ... and then use this to determine and report on the impact and performance of the whole organization. This would be thought of as a "silly idea". But that is more or less what we do when social impact is looked at from the perspective of an organization or a project. The perspective needed is that of the community as a whole ... and the performance of an organization seen in the light of everything that is going on in the community and society at large.

Some of the SDM elements are valuable ... but SDM is not a complete enough system, and my guess is that if it grows it will add to overload rather than evolving into an efficient source of management information and improved decision making.

Maybe I am wrong ... but my sense is that something like the Community Analytics (CA) initiative has more potential for paradigm shift in the way socio-economic progress and performance metrics are compiled and reported.

Peter Burgess
I realize that this message is somewhat strident ... but being politically correct and overly polite has proved not very effective. My hope is that soon there will be a larger community of practitioners that understand the need for something like Community Analytics (CA) to complement internal accounting and MIS.

Peter Burgess

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