Wednesday, September 21, 2005

ROI = Return On Inconsequential

In a series of short essays, I intend to examine the ways we can begin to use measurements for use in the Relationship Value Model.

This first essay sets out to look at the macro issues of measurement.

What is the value of culture, the great religions, democracy, countries? Is it greater now than ten years ago? Is their value going to change more or less for the next generation compared to the last generation? Will the value be greater or less?

What about asking the same question of peace, prosperity, democracy, liberty and social cohesion?

Now we have got that out of the way and without regard to the share price of MacDonald's, is the company more valuable today than it was ten years ago? Is its value in the long term going to increase? Will its value increase as much in the future as it did in the past.

These may seem intangible and subjective measures but are none the less, great questions of our time for many people.

These assessments are all conditioned by what we understand by the words culture, religion, democracy, country, peace and even MacDonald's. Well lets get granular. What is the value of the MacDonald's brand, products, marketing, CSR programmes, customer?

These are all tokens and we understand what these tokens mean only from the values that we associate with them.

What is more, we cannot make judgements about the value of MacDonald's without a view of prosperity or countries or even religions and democracy.

Our (society's) understanding of these tokens and the values is shaped by many things but through one process. We only understand these values through relationships. Unless we can interact with other information, views and information, and that means people, we cannot gain the insights we need.

It follows that to be able to measure and evaluate, we need to be able to understand relationships.

We need to be able to identify the extent, depth and breadth of the relationships we have in order that we can begin to measure the values of such things as cultures and organisations.

To make this assessment harder, people have different understanding of these tokens and values at different times, in different places and when they have relevant interactions.

What is the value of culture to a person white water rafting? Are they really going to worry about getting a burger or a CSR programme as they flash through the roaring and pounding white waters?

Thus one may idly ask the return on investment on plant, machinery, intellectual properties, processes, communication, brand promotion, stakeholder relations and other isms of accounting in the spume of water and crash of the boat. It would be an idle pastime too.

In trying to measure what relationships exist, we have to begin with the Social Frame of the moment. The time, place, available (and usable) knowledge, and interactive capability are all important when identifying relationships.