Mdia p3-01-why-what-how-150420

MDIA
WHY? WHAT? HOW?
MULTI DIMENSION IMPACT ACCOUNTING

The GOAL is to design and
deploy a system of metrics for
management that accounts for
impact on people and planet as
rigorously as double entry
accounting accounts for
money transactions that
impact profit

Corporate money profit
performance over the past fifty
years has been impressive

But labor income over the past
fifty years … not so good

WHY?

The following slides
show some
important trends!

Corporate money profit performance over
the past fifty years has been impressive

Huge recent
economic growth
but a finite planet!

MDIA
Why? More reason!

YELLOW:
The PEOPLE piece … Human Capital (NC)
DIRTY BROWN:
The ECONOMIC piece … Man Built Capital (MBC)
GREEN:
NATURE, ENVIRONMENT … Natural Capital (NC)
COLOR KEY

Trajectory to disaster!
This must be changed
to this …

PEOPLE progressing
MBC* efficient
PLANET healthy
* MBC … Man Built Capital

WHAT?

MDIA is ETRICS
The double entry idea
is very powerful:

MDIA
is a system of metrics to
enable better management of
everything that matters.

MDIA
It is en extension of
conventional accounting and
builds on the amazing power of
the double entry system

State … B/S
Flow … P&L
New State … B/S

Put STATE side by side
and there is a very
useful time series:

Add more detail into the
STATE → FLOW → STATE
model and it might look
something like this:

PROBLEM!
Conventional Accounting
only measures this part of
the total system:

Conventional money profit
accounting works very well for
financial performance … that is
impact on corporate profits
and stock value.

MDIA
How?

You Manage what you Measure.
Attributed to Peter Drucker
When you change the way the game is scored,
you change the way the game is played.

The first step is to design and
develop a data architecture
that is congruent with the
realities of the modern global
socio-enviro-economic system

Quality of Life and Standard of
Living for PEOPLE should be
measured with a system that is
just as powerful.

Resource Depletion should be
measured rigorously and
incorporated into all aspects of
Impact Accounting.

Ecosystem Services and Bio-
Degradation should be
measured rigorously and
incorporated into all aspects of
Impact Accounting.

The data architecture is already
in a relatively complete form.

A massive amount of scientific
data already exists and needs
to be mapped to the MDIA data
architecture.

New units of measure need to
be defined so that scientific
data may be converted into
these units of measure.

A characteristic of these new
units of measure is that they
will enable complex details to
be summarized easily for
reporting and conversation.

These new units of measure
will NOT merely be a market
monetization of an element.
They will be new units that
have the properties of all
physical measures.

Standard Values need to be
established for EVERYTHING.

Standard Values have much
the same characeristics as
Standard Costs in commercial
cost accounting.

In cost accounting Standard
Costs are a way massively to
simplify costing without losing
much, if any, of the utility of the
cost accounting information.

Data about PRODUCTS needs
to be organized. The IMPACT of
every PRODUCT in the market
should be 'a click away'.

Data about the choices
PEOPLE make needs to be
organized so that there may be
ways for PEOPLE to earn
rewards for making choices
that are good for themselves,
the society and the enviroment.

Data business performance will
include IMPACT as rigorously
as there is accounting for
PROFIT.

PROCESS is also an element of
the data architecture. There
should be Standards for all
processes.

SUPPLY CHAIN may be built up
from PROCESS standards.

COMPANIES have financial
accounts. MDIA standards may
be used to convert financial
accounts to impact accounts.

Operating units of companies
and entities in the supply chain
can be held to account based
on information originating in a
PLACE

It should become more and
more difficult for anti-social
operational performance to be
possible simply because it is
out of sight.

Accountability is a public
matter …

Mdia p3-01-why-what-how-150420

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Mdia p3-01-why-what-how-150420