Integrating the Holonomics Approach into a Balanced-Reporting Framework for Small Municipalities

University of Wisconsin – Stevens Point

Bo DeDeker is a lecturer in accounting at the University of Wisconsin. For many years Bo was the Director of Finance and Accounting at Portage County, Wisconsin, which followed his experience in many senior leadership positions in the private sector.

This year Maria and I had the very great pleasure of supervising Bo through his doctoral research at the university’s department of Educational Sustainability which had the aim of “developing a sustainable balanced-reporting framework (SBRF) that will allow cities to change their management focus to include a holistic systems approach to increase operating efficiency while making strong sustainable change”.

Our two books Holonomics: Business Where People and Planet Matter and Customer Experiences with Soul: A New Era in Design are both recommended texts for Educational Sustainability and so we were extremely happy to receive an invitation to work with Bo in such depth. In this article I will introduce Bo’s research and explain the role that our Holonomics approach played in the development of the framework which he created.

Bo introduces his research by expaining how he gradually was able to develop a systemic understanding of the issues facing those with a responsibility for managing municipalities:

“I was the business leader of large organizations, I managed million-dollar budgets and supervised professional workers of up to 60 in size. I was an important business leader. However, slowly, with my position as the CFO of Portage County, my world view began to change and become more of what it is today. Suddenly, the budgets that I was managing no longer related just to products, they now started to impact the lives of humans. If the budget was tight and I cut the Human Services budget, people would go hungry. If I cut the public protection budget, then citizens would be left unprotected. I started to see the suffering that low income and at-risk humans had to deal with daily. This was the beginning of my understanding of the importance of system thinking.”

It was because of his experience in small municipalities that Bo realised that more research was required to help understand their particular challenges in developing more sustainable management practices:

“A detailed survey of 1,844 municipalities conducted in 2010 by the International City/County Management Association (ICMA) found that the smallest communities were only a third as likely to adopt sustainability polices as were larger communities. Research on municipal sustainability efforts in North America has shown that larger municipalities are significantly more likely to adopt policies that support sustainability than smaller communities.

Social issues, like drug abuse and violence that once beleaguered large municipalities have begun to take hold in smaller communities. Income disparities and urban decay no longer discriminate between small and large cities, placing ever-increasing pressures on reducing tax bases within our small communities. Efforts to solve these problems have been traditionally been driven by oversimplified understanding and linear thinking.”

Maria and I are the founders of Holonomics, a business consultancy which acts in both commercial and social impact sectors. Maria is one of the most respected business strategists in Brazil, having worked directly with Robert Kaplan and David Norton on the implementation and development of Balanced Scorecard and then continuing to evolve this methodology through our Holonomics approach. She is frequently sought-after by organisations and institutions who are seeking to develop more systemic forms of management and more profound approaches to cultural change.

It was extremely interesting to work through our Holonomics approach with Bo and seeing the evolution in his thinking as his focus shifted from a focus on balanced indicators, to integrating these indicators with an approach which allows those with responsibilities for these indicators to manage them systemically. In his thesis he explains the way in which Maria and I have developed Balanced Scorecard through adding the dimension of lived experience:

“One of the key philosophical concepts held by Holonomics is ‘lived experience’. This is a way of working which can integrate the more analytical and quantitative elements of methodologies such as Balanced Scorecard and Triple Bottom Line with qualitative approaches which are truly non-reductionist. These two approaches work together by expanding the breadth and depth of the way in which a situation is viewed and understood.”

In the business world we are seeing a tendency to move away from developing an integrated and systemic view of the organisation to short-term thinking and methodologies inspired by Google and other Silicon Valley companies such as OKRs (Objectives and Key Results). Maria and I work with OKRs in agile contexts and they can provide an excellent way to help an organisation manage and measure the impact of its activities.

However, the problem with OKRs is not their structure but in the way in which they are implemented. When leaders eschew any form of reference to the long term and task managers with maximising their departmental or divisional goals and targets with no systemic reference to optimising the performance and impact of the organisation as a whole, the result can be competing targets which lead to internal conflicts, minimal systemic impact and little cross-departmental co-operation.

The solution is to integrate methodologies which work with both the long-term and the short-term from a systemic perspective. It is important to map out the way in which an organisation plans to achieve its longer term vision, and one way to do this is via a strategic map, which forms part of the Balanced Scorecard methodology. As Maria and I discussed with Bo, a strategic map, via different perspectives, makes both the objectives that the organization wishes to achieve in order to realize its vision of the future and the internal objectives of the organization that will enable the desired results to be achieved explicit.

Cause and effect relationships are included in the map in order to demonstrate the interrelations between these objectives. They are always represented starting at the bottom and moving upwards, showing that if the internal objectives are achieved, the outcomes will lead to the achievement of the key objectives. In this way therefore, there is coherence between the objectives which must be understood in an integrated manner and from a systemic point of view.

The strategic map demonstrates balance across several dimensions: from perspectives (external and internal to the organization), from time (short, medium and long term objectives), and from the nature of the objectives (related to the results and their enablers). It is this balance that enables an organisation or municipality to better translate their vision of the future so that the dimensions can be measured, quantified and direct initiatives and actions.

It was really interesting for Maria and I to see the way in which Bo embraced the dynamic conception of wholeness which we describe in Holonomics. As Bo writes:

“All these activities individually; the Balanced Scorecard, Strategy Maps, Future Fit sessions, leader, and citizen learning are singular components, but when placed together become a system of wholeness that provides for a lived experience within the community… together they become a quality system of wholeness that deepens the lived culture within the community. The inhabitants become more aware of the needs and develop an ability to increase the livability in the community by being engaged and learning the about the true essence of their settlement.”

In our second book, Customer Experiences with Soul: A New Era in Design, Maria and I introduce our design tool, the Holonomic Circle, which provides a systemic way to explore an organisation meaningfully, systemically and from the perspective of lived experience and human values.

Below is a figure that Bo designed for his thesis to help to articulate the interrelated essence of the way in which our Holonomics approach integrates various tools in order to bring “a lived wholeness to a community initiative”.

Credit: Simon Robinson and Maria Moraes Robinson, 2020

Bo concludes his thesis in the following way:

“Many of our cities are already feeling the impacts of climate change, which, if left unchecked, will subject populations to untold risk and suffering, pushing struggling services to the brink and undermining city government’s efforts to protect their citizens. The only way that our cities can survive is to find new ways of managing these new risks that imperil our very existence. 

A strong accounting sustainable balanced reporting framework coupled with a holistic management paradigm, will be a backbone of a solution to handle these new risks. Accounting authoritative bodies have made it their focus in recent decades to manage and report risk to the constituents of institutions, they will soon have to grapple the fact that climate change is the ultimate risk to our economies. The sustainable balanced reporting framework presented in this dissertation although not a final solution starts the discussion of a process and refinement with further research.”

The overall goal of Bo’s research was to find the components and strategies necessary to support sustainable reporting that provides maximum value to smaller municipalities. Many practitioners in business and those with responsibilities within organisations more often than not fail to develop any form of systemic thinking when introducing new measures and indicators. Without a systemic and causal model behind the indicators, the management of the organisation or municipality and the implementation of any form of strategy results in far less impact than expected. For this reason both Maria and I would like to congratulate Bo for the depth of his work and his ability to integrate the Holonomics approach with its systemic focus into his development of a sustainable balanced reporting framework.

To read Bo’s dissertation, please access it via the link below:

A Data-Driven Triple-Bottom-Line Sustainable Balanced-Reporting Framework for Small Municipalities

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