The Adaptive Quadruple Bottom Line Scorecard Henk Hadders University of Groningen Accountability...
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Transcript of The Adaptive Quadruple Bottom Line Scorecard Henk Hadders University of Groningen Accountability...
The Adaptive Quadruple Bottom Line Scorecard
Henk HaddersUniversity of Groningen
Accountability Through Measurement2nd National CSIN ConferenceToronto, March 2-3, 2010.
Intro
1. Organizational Sustainability
2. A new Strategic Performance Scorecard:- The Adaptive Quadruple Bottom Line Scorecard (AQBLSC)
3. A new Sustainability Measurement and Reporting Tool: - Capitals-based approach- Context-based sustainability & Context-based metrics - Quotients-based sustainability approach
OrganizationalOperations
Vital Forms of Capital
Natural ,Human, Social, Constructed
Well-BeingInternal and External
stakeholders
Social ContractStakeholders
ActualImpact on
Createflow of goods
and servicesneeded and used for
AppropriationsAffective, Evaluative
Response and behavior
Duties and obligations to stakeholders regarding impact on vital capitals(Norm)
Interaction
Adaptation
Problem Detection and
Knowledge gaps
KnowledgeProduction
Knowledge ClaimEvaluation
KnowledgeIntegration
Create new KnowledgeClaims needed forProblem solution
SurvivingKnowledge Claims
Actual impactKnowledge
on
A Reference Model
Reactive Learning
Reenacting habits
“downloading”Mental models
All learning integrates thinking and doing. In reactive learning, thinking is governed by established mental models and doing is governed by
established habits of action
All learning integrates thinking and doing. In reactive learning, thinking is governed by established mental models and doing is governed by
established habits of action
DoingThinking
Adopted from Senge, P. et al : Presence (2004)
Deeper Levels of (Creative) Learning
Thinking
Increasing awareness
of the whole
Doing
Actio
n th
at in
crea
sing
ly
serv
es th
e w
hole
Adopted from Senge, P. et al : Presence (2004)
Deeper levels of learning create increasing awareness of the larger whole – both as it is and as it is evolving– and actions that increasingly become part of creating
alternative futures.
Deeper levels of learning create increasing awareness of the larger whole – both as it is and as it is evolving– and actions that increasingly become part of creating
alternative futures.
The Adaptive Maturity Model
Thinking
Increasing awareness
of the whole
Doing
Actio
n th
at in
crea
sing
ly
serv
es th
e w
hole
Adopted from Joe Firestone (2006)
Financial Metrics
Balanced Scorecard
Adaptive Scorecard
AQBLSC
A different way of viewing organizational performance scorecards
• A life cycle approach enables managers to…– Design more complex scorecards to account for more
variables, and– Assess more types of organizational performance
• Financial• Environmental• Social • Economic• Learning • Knowledge• Organizational Intelligence• Organizational Adaptation
What is the Adaptive Quadruple Bottom Line Scorecard ?
• The AQBLSC is a tool for measuring business performance that not only considers standard metrics, such as financial, customer, business process, and employee development – it also evaluates a firm’s1. Organizational Learning and Intelligence
1. Routine learning processes2. Deeper creative learning processes
2. Social Responsibility3. Sustainability4. Adaptive Capacity
Major Benefits of the Adaptive Quadruple Bottom Line Scorecard
The AQBLSC……• Balances between internal and external impacts of the organization• Incorporates a management evaluation perspective that provides a
basis for evaluating the quality of management processes used• Provides a conceptual foundation that can enable more sophisticated
formal modeling of measures, and simulation of strategy dynamics• Offers greater applicability to account for the many ways in which
organizational complexity impacts performance• Builds a foundation for formulating more sophisticated business
strategies• Adopts a broad-view systems approach that offers a high probability of
achieving organizational sustainability and adaptability
The AQBLSC
Operational PerformanceMeasures
Intelligence PerformanceMeasures
Doing (BP) Managing (BM) Doing (KP) Managing (KM)
Financial Bottom Line
EnvironmentalBottom Line
Business Processing (BP)and Management (BM)
Knowledge Processing (KP)and Management (KM)
Outcome Impact Outcome
SocialBottom Line
EconomicBottom Line
InternalStakeholders
ExternalStakeholders
ExternalStakeholders
ExternalStakeholders
InternalStakeholders
InternalStakeholders
Outcome OutcomeImpact Impact Impact
Operational PerformanceMeasures
Intelligence PerformanceMeasures
Doing (BP) Managing (BM) Doing (KP) Managing (KM)
Financial Bottom Line
EnvironmentalBottom Line
Business Processing (BP)and Management (BM)
Knowledge Processing (KP)and Management (KM)
Outcome Impact Outcome
SocialBottom Line
EconomicBottom Line
InternalStakeholders
ExternalStakeholders
ExternalStakeholders
ExternalStakeholders
InternalStakeholders
InternalStakeholders
Outcome OutcomeImpact Impact Impact
Advocating for non-financial impact measurement, using• Capitals-Based Theory • Context-Based Metrics (CBMs)• Ecological and Social Footprints with Sustainability Quotient Method
TBL
Non-Financial Capitals and Well-Being
Available Flows of
Beneficial Goods and
Services
Available Flows of
Beneficial Goods and
Services
Appropriations by Individuals
and Collectives
Appropriations by Individuals
and Collectives
Resulting Levels of Individual
and Collective
Well-Being
Resulting Levels of Individual
and Collective
Well-Being
Natural Capital
Natural Capital
Anthro CapitalAnthro Capital
This is the capitals-based theory ofSustainability to which we subscribe!This is the capitals-based theory of
Sustainability to which we subscribe!
The 4 Bottom Lines and their Capitals
ANTHRO Capital
Financial Bottom Line
EnvironmentalBottom Line
MonetaryCapital
NaturalCapital
ConstructedCapital
SocialBottom Line
EconomicBottom Line
InternalStakeholders
ExternalStakeholders
ExternalStakeholders
ExternalStakeholders
InternalStakeholders
InternalStakeholders
HumanCapital
SocialCapitalBottom Line
Area of Impact
Adding Organizations to the Mix
Organizationalactivity
Organizationalactivity
Stocks of Vital CapitalStocks of
Vital CapitalHuman
Well-beingHuman
Well-being
managementinterventions
and impacts on organizational
activity
organizational contributions to supplies of vital capital (pos.& neg.)
quality and size of stocks
of capital
quality and volume of flows from
capital
basic needs being met ?
(yes/no)
indicatorsand metrics
Positive & Positive &
neg. impacts neg. impacts
indicatorsand metrics
indicatorsand metrics
indicatorsand metrics
indicatorsand metrics
…..and mapping indicators and metrics to this causal theory of human well-being…..and mapping indicators and metrics to this causal theory of human well-being
Adopted from McElroy (2009)
Definition of CBMs:
Measures of sustainability performance that express impacts on social and/or environmental resources in the world, relative to what such impacts ought to be in order to ensure human well-being– Grounded in the context of actual social and/or
environmental conditions in the world– Literal measures (absolute, not relative) of
sustainability performance
An Example: Water Use (w/o context)
Fortune 500 Company’s Annual Water Use
Mark W. McElroy, 2008
An Example: Water Use (with context)
Fortune 500 Company’s Annual Water Use
Mark W. McElroy, 2008
CBMs Take Form of Quotients
AN
SustainabilityPerformance =
Actual impacts onvital resources
Normative impacts onvital resources
ScoringConventions
For environmental areas, scores of < 1.0 = Sustainable
For social areas, scores of > 1.0 = Sustainable
Mark W. McElroy, 2008
I thank my US Friends
• Joe Firestone PhD, CEO of Knowledge Management Consortium International: [email protected] – the Adaptive Scorecard
• Steve Cavaleri PhD, Professor Connecticut State University: [email protected] – System Dynamics and Modeling
• Mark W. McElroy PhD, CEO of the Center for Sustainable Innovation & Director of Research at Deloitte’s Center for Sustainable Performance in Waltham, Mass, : [email protected] – the Social Footprint and the Quotient approach to sustainability
and Thank You!
For more information, contact us at
Henk HaddersUniversity of Groningen