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Why do we need a universal measurement system?

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by

Oleg Tumarkin

on 17 November 2010

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Transcript of Why do we need a universal measurement system?

Why do we need a universal measurement system? by Oleg Tumarkin Imagine Executives whose compensation is based on real impact they have on their business's performance many years forward and who are penalized for taking unnecessary risks Workers who are in charge of their destinies compensated according to the value they contribute Organizations where everyone knows how their actions contribute to the well being of the world. Investors who can now quickly understand and invest in businesses that actually represent their interests Customers who understand the actual overall impact of their purchasing decisions Suppliers who know that your business can be trusted Bankers who can with little paperwork support your capital initiatives Contractors who can easily freelance for you with confidence Systems develop unevenly, but their practical usefulness is always limited by the sophistication of the implemented measurement and controls - Theory of Technical Evolution (part of TRIZ) If we want a better world we need better feedback mechanisms Is this the world you'd like to live in? Is it possible? Industrial age did not just bring public education, better tools and assembly line, it brought about a new set of accounting and legal standards that were essential to shaping the world we live in. Information age will require even more radical changes in education, performance measurement, accounting and law. Can we really have a measurement and feedback system that would allow us to compare the world's largest conglomerate and a local coffee shop? Can we look at a new startup and be able to predict it's performance accurately? Can we capture the value that is being created even when it has not yet been sold? Can we capture the value added by each individual contributor? Can we do all of that cost effectively? Taxation system that encourages us to be productive, not the other way Universal Business Measurement YES, but... We have to abandon precise math. We have to get away from external motivations. We have to learn new math and new accounting. We have to apply tools of Systematic Innovation and Enterprise metrics. What are these new ways? What's the problem? E-M8 What's the answer? Just like it takes multiple gauges to drive the car or fly the plane so it is with businesses, it takes watching more than one variable. The trick is to have multiple scales for multiple variables instead of just relying on the monetary gauge. This is also true for individual's contribution to the business or society. Their ability to imact the world or enjoy it can no longer be measured by the size of their capital, but rather by a combined sets of factors. How about a hint, instead? So, what are the business gauges? Well, there is much need for development, but here are some that I propose:
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