We have done a Steinhoff on the planet! (and some related rambling thoughts)

As we continue to see news flow about the continually unfolding Steinhoff sage – there is much focus on the tactics deployed by the management (and/or board) at Steinhoff to ‘generate’ value. It seems that the revenue of the acquired businesses was reflected in the financials but the linked/associated liabilities were not. The has been a justifiable outcry about this and the investigation, and interest, continues unabated.
This story is bound to continue.
The problem is that the self-same thing has been happening for decades with our planet without the commensurate outcry – except from a few and except for (mainly during) the recent past.
With the planet the ‘fuse’ is longer but the damage ‘less’ (if at all) reversible. Market value may have been lost – and in the case of Steinhoff this value was massive and far reaching. The tentacles of impact/loss caused by the collapse of the Steinhoff share price reached across the broad spectrum of South African (and International) investors and lenders and the numbers are huge – R 200 billion (and counting). But a market value loss – while impactful is not the same as the loss of a planet!
For decades businesses across the world have been accounting for the beneficial value of the ‘planetary inputs’ into their businesses while at the same time not accounting for (or not accounting fully for) the cost or liability that goes with/is linked to this benefit. A input value without a cost = a businesses dream.
Pluses without minuses, positives without negatives! Is this not a contradiction in terms of accounting practice? Is this not a contradiction in terms of the underlying law of physics?
Have we all been lying to ourselves?
One of the challenges is that it is not that easy to account for all the costs or liabilities linked to the benefits we have enjoyed.
Ultimately the market provides a very good mechanism to convert value into a measurable instrument – this mechanism is called money.  Because money is so easily measurable we have also used it as the primary measure used in all business activities. If we can ‘convert’ everything to money then it makes the entire system a whole lot simpler – a whole lot simpler than it actually is!
We then kid ourselves (lie to ourselves) because we can measure money, and therefore make the ultimate measure money, we tell ourselves that ‘business is simply a game about money’, with the ultimate measure of success or failure a matter of money.
What happens when the thing we are measuring does not and cannot take account of or and account for everything that is actually of real value – and certainly does not account for all the costs inherent in an entire system that  is far, far more complex than we give it credit for being?
Another thing we have done by continually trying to simplify business with tools like best practice frameworks and other practice standards is inadvertently design tools and structures aimed at addressing simple issues when the issues we face are actually extremely complex.
The skill-sets we have developed are also inadequate – at both oversight as well as implementation level.
  • On the board
  • At management level
  • In operations
  • in policy
  • In practice
The Challenge going forward!
Can we embrace the complexity?
  • In our thinking
  • In our deciding
  • In our acting
  • In our ethics and approach
  • In our value systems
  • In our organisational or corporate culture
  • In our relationships
  • In making sense of the past
  • I  oversight
  • Into the future
Can we address the challenges of
  • Embracing Different (and divergent) Perspectives
  • Identifying Different (and hopefully far, far better) Measurements
  • Recognising the ‘ultimate measures’ – not everything that counts can be counted (Quoting Einstein)
  • Simplifying without Simplification – using metaphors and narratives, pictures and stories to make sense of complexity without losing the complex nature of complexity!
  • Addressing the mismatch in our thinking, deciding and doing – so that we ultimately make better, more sustainable decisions for all impacted
  • Building a better toolbox (and recognising that we have too often been using an empty or a very limited toolbox – where when all you have is a hammer you treat everything as you would a nail!)

I do believe that these are some of the really BIG issues facing us all today!

I would welcome your thoughts, questions and comments.

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