More than money and counting…

In BI monetary units and simple counts are ubiquitous. But there is much more than money and counting to a good BI system. In fact, it is dangerous and deceptive to rely only on economic indicators. To the credit of business executives in general, I have hardly encountered any who would question the wisdom of this – and there’s no problem of just paying lip service to academic concepts – they know, and they really mean it. But of course, the financial side must always be handled, and quite likely first… For me, with an engineering background for working in BI, this broader view on business is very satisfactory. There is a host of measures and units other than money that need controlling in business, and for me they are quite often the ones most “fun” to work with.
But change the focus – just a bit actually – to society as a whole, or to local bodies of government and administration. I believe responsible management entails almost the same within public administration and within business administration. Call it BI or GI (Government Intelligence!) - it is all decision support and conceptually very similar.
At top level, however, it is my impression that actually businesses has a better grasp of non-financial indicators than do most political executives. Perhaps it is because non-financial measures are typically more long-term than financial measures that many politicians seem to care less; perhaps it is because politicians tend to be more superficial and less focused in what they do. Anyway, the outcome is the same, and I am regularly worried about what seem to be closed-loop arguments between economists and politicians in purely monetary terms about our common future.
With these general considerations I wish to introduce a well-timed exception to this worrisome trend – and welcome David MacKay as new special advisor on energy issues to British Government as of 1 October. David MacKay is professor at Department of Physics at University of Cambridge, and - just as important - he is author of a splendid new book on [British] society’s options for future energy supply, “Sustainable Energy – without the hot air” - which he has also made freely available for download at http://www.withouthotair.com/.
The bad news is that there are no easy and convenient fixes. The good news is that there are coherent models available for society to choose from, which do not imply turmoil and upheaval – in fact MacKay presents five different models. Coherence is the essential feature, coherence in energy units such as PJ or kWh – not in pounds or Euros, as no one can really predict the economical regime, in which our future energy shall be produced and consumed.
Taking one step back, it is possible to describe quite generally and accurately when economists and economic planning should be side-stepped and natural scientists and engineering should be put to the fore. It should be done whenever a change of regime is investigated, where knowledge of the current economic regime is of little value, or is actually an impediment when the future regime must be envisaged.
With an example from mathematics it is a bit like the difference between normal, Euclidean geometry and non-Euclidean geometry. The rules are simply different in each case and someone ingrained with the rules of Euclidean geometry is hardly the right choice for exploring the options of non-Euclidean geometry.
A Dane and a[n] [engineering] statistician myself, but not primarily an economist, I am not happy with the actions and opinions of Björn Lomborg (“The Sceptical Environmentalist”, “Cool It”), but I am particularly concerned with his ingratiation with politicians, whose language he obviously knows well. The problem is he holds and voices strong opinions about environmental degradation, energy supply, climate change and everything else. He articulates his considerations and opinions only in economical terms and he derives his experiences and theoretical basis from an economic regime, which is hardly comparable and relevant for the economic regime of the future society likely to emerge.
...‘sorry for being fully five days late with this posting – particularly as it celebrates professor MacKay’s taking up his office with British government – but events do not always move along a straight line (my attempt at classic British understatement!) - stay tuned here at morlin’s BI blog to see and read what happens next.