The media response was predictable, I suppose: sometimes considered and thoughtful – ‘France offers us all a new perspective‘ – but often sarcastic or dismissive – ‘Sarkozy proposes the joie de vivre index‘. Yet the recent report on economics models [PDF: 3.2Mb], commissioned by French president Nicholas Sarkozy and written by a group of economists including Nobel prizewinners Thomas Stiglitz and Amartya Sen, is full of solid sense – and much of it may be relevant to business-architects and enterprise-architects.

Gross domestic product (GDP) is the most widely used measure of economic activity. There are international standards for its calculation, and much thought has gone into its statistical and conceptual bases. But GDP mainly measures market production, though it has often been treated as if it were a measure of economic well-being. Conflating the two can lead to misleading indications about how well-off people are and entail the wrong policy decisions.

The business equivalent of GDP is the financial ‘bottom-line’: it tells us about the financial health of the organisation, but almost nothing about its overall ‘economic well-being’. Hence, as the report’s authors assert, ”the time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s wellbeing”:

Well-being is multi-dimensional:

i. Material living standards (income, consumption and wealth);
ii. Health;
iii. Education;
iv. Personal activities including work
v. Political voice and governance;
vi. Social connections and relationships;
vii. Environment (present and future conditions);
viii. Insecurity, of an economic as well as a physical nature.

All these dimensions shape people’s well-being, and yet many of them are missed by conventional income measures.

The same is true in organisations. Balanced Scorecard, for example, is one attempt to redress the balance, but as can be seen from the list above, it still doesn’t go anything like far enough in exploring the metrics that the organisation really needs.

At the enterprise level, what this is really about is enterprise effectiveness – ‘efficient on purpose’ and the like. So it’s worth reviewing with an architect’s eye the Commission’s main list of recommendations:

• Recommendation 1: When evaluating material well-being, look at income and consumption rather than production.
• Recommendation 2: Emphasise the household perspective.
• Recommendation 3: Consider income and consumption jointly with wealth.
• Recommendation 4: Give more prominence to the distribution of income, consumption and wealth.
• Recommendation 5: Broaden income measures to non-market activities.
• Recommendation 6: Quality of life depends on people’s objective conditions and capabilities. Steps should be taken to improve measures of people’s health, education, personal activities and environmental conditions. In particular, substantial effort should be devoted to developing and implementing robust, reliable measures of social connections, political voice, and insecurity that can be shown to predict life satisfaction.
• Recommendation 7: Quality-of-life indicators in all the dimensions covered should assess inequalities in a comprehensive way.
• Recommendation 8: Surveys should be designed to assess the links between various quality-of-life domains for each person, and this information should be used when designing policies in various fields.
• Recommendation 9: Statistical offices should provide the information needed to aggregate across quality-of-life dimensions, allowing the construction of different indexes.
• Recommendation 10: Measures of both objective and subjective well-being provide key information about people’s quality of life. Statistical offices should incorporate questions to capture people’s life evaluations, hedonic experiences and priorities in their own survey.
• Recommendation 11: Sustainability assessment requires a well-identified dashboard of indicators. The distinctive feature of the components of this dashboard should be that they are interpretable as variations of some underlying “stocks”. A monetary index of sustainability has its place in such a dashboard but, under the current state of the art, it should remain essentially focused on economic aspects of sustainability.
• Recommendation 12: The environmental aspects of sustainability deserve a separate followup based on a well-chosen set of physical indicators. In particular there is a need for a clear indicator of our proximity to dangerous levels of environmental damage (such as associated with climate change or the depletion of fishing stocks.)

What parallels exist in metrics for the enterprise? How would we identify, support and monitor such metrics? What information-systems and business processes would we need for this? What governance, audit and the like?

Suggestions, anyone?

A useful email correspondence about SEMPER with enterprise architect Sally Bean brought up a couple of questions which others are likely to ask, so I thought I’d put the answers up here:

1: “are the labels always meaningful?”

I hope so but reality is that the best label is one that’s been derived by narrative techniques from within the enterprise itself (cf. Cynefin again). The real ‘label’ for each cell is the domain/effectiveness pairing – e.g. ‘Preparation/Appropriate’ or ‘Vision and Values/Reliable’ – but that’s way too abstract for most people, hence the text-label that’s somewhat closer to the business context.

In the online version, all of the labels can be changed – it’s part of what’s called the ‘model’ specification. More on that later, if anyone wants it – I presume you don’t want the blow-by-blow description right now!

2: “is the list rather long – do some of the questions overlap?”

It’s naturally going to be somewhat long because it’s a 5×5 or 11×5 matrix (SEMPER-5 or SEMPER-11 respectively). Does depend what you mean by ‘long’, too: a typical SEMPER-5 takes around 10-15 minutes to do, and 25 cue-phrases with a pick-list of 5 ‘word-pictures’ each is a heck of a lot shorter than, say, Marlies van Steenbergen’s (excellent) “DyA Enterprise Architecture Maturity Matrix”, which weighs in at over 130 questions for a much smaller context!

And yes, there will be what at first appears to be quite a bit of overlap, because the whole point of it is that it’s recursive, reflexive and so on. We look at the same issues from opposite directions: in SEMPER-5, there’s the simple cross-mapping between the workflow/asset-domains (Purpose, People, etc) and effectiveness-dimensions (Efficient, Reliable, etc), whilst in SEMPER-11 we also look at the workflow/assets domains (here labelled ‘physical’, ‘conceptual’ etc) from either end of their respective link-themes (vision and values, skills and leadership, etc).

(A reminder too that the link-theme labels are themselves only examples of the kind of things that we meet in those links: the real ‘label’ is the linking of the two domains – e.g. ‘Physical<->Relational’ rather than my somewhat arbitrary ‘Skills and Leadership’. Once again, the ‘real’ label is too abstract to make sense to most people, so we make do with something that’s closer to the business-world – but it is only a suggestion in each case, so recommendations for better alternatives would be gratefully received!)

Multiple intersecting views are valuable for this purpose because they highlight different aspects of the same issues – giving us a much more reliable overview, especially if there are ‘undiscussables’ knocking around in the context. When we come to interventions, the matrix between workflow/asset-domains and effectiveness-dimensions provides us with alternatives that, again, tackle the same issues from opposite directions – which again can be extremely important when we need to resolve seriously dysfunctional contexts, because it usually means we can usually avoid having to tackle the dysfunctionality head-on.

Remember too that the real parameter we’re measuring in SEMPER is ‘ability to do work’, particularly in a human context. It’s a lead-indicator – a measure of capability, not past performance. This is quite a long way from the usual lag-indicators that proliferate in the typical business context. And it’s also consistent in its description across the entire context – which again is a long way from the usual dissociated mess of point-metrics (or, worse, complex-result metrics such as ‘shareholder value’ – the most useless measure of anything, in terms of identifying what to do to improve it… :wrygrin: ). So yeah, the list might well seem long; it might well seem a little odd at first; but it does work, and darn well, once you get your head around what it’s showing about the enterprise. The problem all the way along has been to bring it down out of the abstraction that works, to something closer to the kind of world that people generally understand. The book is simply one iteration of ‘getting the ideas out there’ – I don’t in any way expect it to be the ‘last word’ on the subject!

I’m currently nibbling away at selection of material for a full accreditation-course a la Cynefin (for which see Cognitive Edge), but to be honest it’s probably a few months away: the book will have to do for now. The aim here was, as above, just to get the ideas out there for now so that people can start to play with them in practice.

Hope that makes sense, anyways.

I’ve now published the next in my ‘Tetradian Enterprise Architecture’ series, SEMPER and SCORE: enhancing enterprise effectiveness. Details on the Tetradian Books website – see here for the book-info, and here for the free-download PDF e-book.

It includes a full description of the Tetradian / SEMPER framework, the SCORE replacement for the classic SWOT strategic assessment technique, and both variants of the SEMPER metric / diagnostic – the simpler SEMPER-5 and the more detailed SEMPER-11.

SEMPER measures ‘ability to do work’ in the broadest sense – probably the key metric for whole-of-enterprise architecture, and for enhancing effectiveness at the whole-of-enterprise level.

I’ve also restructured SEMPER-5 slightly so that it ties in more closely with the whole-of-enterprise architecture framework that I used in Real Enterprise Architecture.

Yup, there’s been a lot of work gone into all of that. Share and enjoy, perhaps?