Leading indicators

July 3, 2015 — Leave a comment


Samuel Wilson

In the context of concerns about the end of a safe operating space for humanity, there is a growing, although by no means universal, global view that we must radically alter our behaviour so as to preserve the life support systems that undergird human well-being.

Although our appreciation of the value of the ecological systems has increased in recent decades, there is little agreement about how to account for the value of these systems and even less about whether we should try to account for their value. More generally, there is little agreement about how to systematically account for the value of nonfinancial systems that make life worth living.

But account for the value of these linked social-ecological systems we must because the information we glean from our measures of these systems is indispensable to social decision-making in and about these systems. Given that we now know that the decisions we make have consequences for existing and future generations, it behoves us to ensure that our information systems measure what matters for people alive in the here and now and for generations to come.

When we think about indicators and information systems the odds are that we will think of management, not leadership. On the face of it, indicators and information systems have more utility as the specialist tools of experts than the indispensable life tools of citizens. This, though, is a misapprehension of the role and value of indicators in our lives.

Indicators are natural, everywhere, and part of everyone’s life. Indicators arise from values (we measure what we care about) and they create values (we care about what we measure). When indicators are poorly chosen, they can cause serious malfunctions in our natural, economic, and social systems. Importantly, indicators are information in a form that anyone can understand and on which people can base their actions. This much is well-understood.

What is less obvious is the critical role that indicators play in the practice of leadership. To the extent that leadership involves persuading people to assume responsibility for shared problems, and to the extent that shared problems effect some harm to collective goods that undergird well-being, well-chosen indicators are instrumental in making us alive to what ails us. This is especially so when the relationship between these indicators and our current or prospective well-being is clear. Some indicators are so powerful and persuasive that they affect our collective behaviour.

Perhaps the preeminent indicator in this regard is gross domestic product (GDP) that, since its creation in the 1930s, has become widely regarded not simply as an indicator of economic activity, but as an indicator of national progress and a barometer of human well-being. However, as is now well documented, GDP is a deeply impoverished measure of what is valued—a fact, to give credit where it is due, that was amply recognised at its inception by its creator.

There is a growing global view that we need new measures of progress; measures that clearly reflect what we value. Commensurate with this, in recent years there has been a proliferation of indicators and information systems designed to measure what matters. Whereas some of these information systems attempt to correct for the deficiencies of GDP (e.g., Genuine Progress Indicator) other systems imagine entirely new systems that reflect what matters in that specific organisation (e.g., integrated reporting) or nation (e.g., Bhutan’s Gross National Happiness).

Although a strength of these new information systems is that, between them, they endeavour to take into account the depletion, and more rarely, the accretion of financial, manufactured, national, human, social, and intellectual capital, these information systems are invariably limited by the availability of relevant information. This is true for all capitals, but less so for information pertinent to financial reporting which is indubitably valorised above all else in our civilisation.

More critically, these information systems are limited by their generally superficial engagement with more philosophical and ethical questions about the meaning and scope of the greater good. Moreover, even when information systems are grounded in careful philosophical conceptions of the good—for example, Amartya Sen’s capability approach to welfare informs the UN’s Human Development Index—it is typically human wellbeing that defines the boundaries of the good.

Like love and truth, the concept of the greater good (and its synonyms: public good and common good) is paradoxical. On the one hand, the greater good has the quality of being familiar and commonplace. And yet, it is difficult to define in a precise or comprehensive way. We quickly discover that it is more complex, expansive, and elusive than we initially suppose.

In the context of intensifying environmental problems, the most serious limitation of most historical and indeed prevailing conceptions of the greater good are that they silent on the greater good as it relates to other species and living systems.

Happily, our growing awareness of the vulnerability of ecological systems to human disturbance has heightened our concern for the systems that ultimately underpin and sustain our societies and economies. At minimum, construing these natural systems as the ultimate means upon which all else depends admits the state of the natural world into conceptions of the greater good.

Returning, though, to the connection between indicators and leadership, what tends to receive rather less attention than is warranted is what might be described as the granularity or the scale at which data in indicators and information systems is represented.

Notwithstanding the critical importance of representing information at the national level, or even at the level of the state (e.g., Maryland), such presentations of data are removed from the lived experience of most people. And even if this information is presented in a form that anyone can understand, it is less clear whether this information is in a form that is locally relevant and on which people can base their actions.

Why should any of this matter? It matters because this, by and large, is precisely the scale and granularity of information that is needed for us to imagine how it is possible that we might share responsibility for causing and addressing our collective challenges, especially when these notions of responsibility are at such variance with our common-sense conceptions of intentionality and responsibility.

Leadership may well consist in persuading people to accept collective responsibility for collective problems, but this necessitates followership, in this instance, people who have the wherewithal to be persuaded of the veracity and necessity of collective responsibility.

The construction of information systems that enable this type of collective sense-making is therefore a vital, and arguably somewhat neglected, ingredient in the practice of leadership for a healthy world—leadership for the greater good.

It is a social and research priority to deepen our understanding of the connection between indicators and information systems, on the one hand, and leadership for wicked and adaptive challenges, on the other.

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