Photo: Wikimedia Commons
A little over two years ago, I wrote an article for Business Insider explaining the difference between finance, economics, and my new discipline called Globalnomics. In that Insider article I explained that even though Globalnomics is actually superior to and mediates over the other two disciplines, Globalnomics cannot exist in its ultimate form without good finance and good economics.
Like the eye of the pyramid on the one dollar bill, I said that Globalnomics must oversee and monitor the Finance and Economic disciplines to assure that both are operating with fairness and optimum efficiency.
Throughout the same time period that I was laying out the foundation and core principals of my new Globalnomic theory, an old friend and colleague, Tristan Yates, and I were also laying out the foundation of our Performance Evaluation Report Card (PERC) Methodology as a new and superior approach for improving operations throughout a vast array of business and government organisations.
As an aside, the PERC Methodology was acknowledged as one of the top 10 finalists in the 2010 [email protected] World Wide Innovation Tournament.
Recently several colleagues have asked me how I would recommend using the PERC Methodology to support my Globalnomic theory and monitor improvements towards Globalnomic objectives. The following is my simplified answer to my colleagues.
A Simplified PERC Approach for Globalnomic Purposes
The first thing that I would do is place every so-called “national entity” into one of four peer groups using something like GDP to define peer group relationships. For example, I might consider defining my national peer groups in the following manner: Peer Group 1 would include all national entities with a GDP more than $1 Trillion; Peer Group 2 would include those with GDP’s between $100 billion and $1Trillion; Peer Group 3 would include nations with GDP’s between $10 and $100 billion; and Peer Group 4 would contain all the remaining nations.
I might consider evaluating both the European Union as a whole in Peer Group 1 and the nations that make up that Union separately in their appropriate Peer Group at the same time.
The next thing I would do is identify the 8-10 highest level performance criteria that I believe relate to Globalnomic objectives and decide what per cent weightings I want to establish for each, which when totaled would be 100%. A simplified example should suffice to explain what I mean here, too.
For example, for my national performance evaluation, after considering Maslow and other relatively wise inputs, I might choose something like the following eight criteria with the following weights for measurements purposes:
- Food/Water (20%);
- Shelter/Housing (17%);
- Safety (15%);
- Health (13%);
- Individual Freedom (11%);
- Work/Employment (9%)
- Education (8%); and
- Infrastructure (7%).
Now I full well understand that my criteria and my weightings can be debated; however, that is not the point right now. I have shown the above for example purposes only, but with a general intent to show how I might cover the most important functions of a nation’s responsibilities.
The next thing that I told my colleagues that I would do is identify the performance measurements that I would use to evaluate each of the above criteria. For example, for the Health criteria weighted at 13% of the total national score, I might use another 5-6 measurements such as: (1) average life expectancy; (2) percentage of child birth deaths; (3) per cent of people deemed healthy and without some debilitating disease or condition; etc., etc. etc., each with their own weights and when totaled would make up the overall Health criteria score valued at 13% of the overall national entity total.
Each performance measurement would have its own average, standard deviation, minimum, and maximum values for its “peer group of national entities” and every national entity would have a raw value relating to each particular analytical performance indicator. The raw national entity values would be converted into a scale score and there are many ways to do that.
One example, using statistical variances, is explained here. For example, if the average of an indicator is 40, and the standard deviation is 5, then a national entity raw score of 50 (2 standard deviations away from the mean) might be given a scaled score of 10, whereas any national entity score under 30 may be given a 0 (zero) scaled score. Then depending upon one’s desire or objective, national entity raw scores between 30 and 50 would be scored using a linear, standard deviation, or other logical approach.
After scoring each sublevel performance indicator and weighing it accordingly, I would combine the sublevel indicator scores to determine the national entity score for each of the higher level rating criteria (i.e., Food/Water; Health; Education). When these higher level criteria are totaled and weighed in the manner explained above an overall “Globalnomic nationalist score” for each national entity could be determined.
This ranking and rating system would be updated periodically, probably on an annual or bi-annual basis. The original scores and performance measurements would be kept on file and used as the “baseline statistics” to determine whether Globalnomic world conditions are moving in the direction of positive improvement. The entire scoring approach, methodology, and performance results would be made public throughout the world.
And that is how I would apply the PERC Methodology towards my Globalnomic principals.
In the case of the United States, I would recommend that a somewhat similar methodology could be used for the 50 states that fall within its domain to help identify both “poor performers” and “areas of best practice” internally to its own national system.
In our submission to the Wharton Innovation Tournament, Tristan and I said that our PERC methodology is performance oriented and does not try to reengineer existing business processes, but instead challenges managers to make good decisions as to where efforts should be allocated. It also relies upon a natural preference for individuals, businesses, governments, and nations to be evaluated with clear feedback and rewarded quickly and fairly for their efforts large and small.
A PERC program can be put in place in response to a crisis to drive rapid improvements, but can be also run for years or decades in order to prevent future problems. It is a powerful system with a light touch, as the weekly, monthly, annual reports (depending) become part of the regular feedback received by all managers on their efforts and an opportunity for executives to identify and arrest potential problems when small and manageable.
Given its capabilities and wide applicability, PERC is an important tool for executives and managers in both public and private organisations that can be carried from project to project. As such, it merits a place in the education of every manager, analyst, and executive.
And as explained above, there is absolutely no reason why it cannot work in the world of Globalnomics, too.