Beyond GDP: Social Progress Index vs. Happy Planet Index

Michael Porter Skoll Social Progress IndexThis week Michael Porter launched the Social Progress Index (SPI) at the Skoll World Forum in Oxford. Michael Porter – by many – considered the world’s leading thinker on competitive strategy, now follows up his 2011 idea on Creating Shared Value.

The Social Progress Index ranks 50 countries and places Sweden as #1. The UK is ranked second, above Germany, which ranks fifth, the United States #6. See the list below.

A new organisation, the Social Progress Imperative, has been created to support the development of the SPI and help to integrate it into corporate and governmental thinking.

 

The Social Progress Index

The Social Progress index is interesting and in many ways trying to crack the challenge that former French president, Nicolas Sarkozy, commissioned Joseph Stiglitz to do in the work to get beyond GDP as a measure of prosperity. Stiglitz never came up with the new wonder metric or formula to replace GDP though, rather he came up with a number of recommendations going forward.

Harvard Business School professor, Michael Porter, now tries to nail it and introduces a new platform for measuring progress in a hope to bring environmental and social considerations to the top of the policy and corporate agenda. In this way the SPI has some similarities with The Happy Planet Index (HPI), introduced by Nic Marks, but it puts more emphasis on Basic Human Needs.

Introduction to The Social Progress Index

The Social Progress Index is based on three dimensions of social progress:

1. Basic Human Needs: Does a country provide for its people’s most essential needs?
2. Foundations of Well-being: Are the building blocks in place for individuals and communities to enhance and sustain well-being?
3. Opportunity: Is there opportunity for all individuals to reach their full potential?

 

The Social Progress Index with its components:

Social Progress Index

 

The Social Progress Index score:

Social Progress Index

The Happy Planet Index is based in three dimensions:

1. Experienced well-being
2. Life expectancy
3. Ecological footprint

Compared to the Social Progress Index the Happy Planet Index emphasises Experienced well-being instead of indicators/foundation for Well-being – and it places more weight on the Ecological footprint.

Happy Planet Index

Social Progress Index vs. Happy Planet Index

The scores of both Costa Rica and Sweden illustrate the difference between The Happy Planet Index and The Social Progress Index. In The Happy Planet Index Costa Rica has been rated the “happiest country in the world” for two years running. In the Social Progress Index, Costa Rica ranks only #12 among the sample of 50 countries, due to poverty and lack of other ‘Basic Human Needs’. In the Social Progress Index Sweden ranks #1 – but only #52 in the Happy Planet Index due to heavy Ecological Footprint.

Sweden’s Happy Planet Index Score:

Happy Planet Index Sweden

 

Getting Beyond GDP

Both Index’s and methodologies have – and will continue to generate – critique on the scores they put out. The Happy Planet Index has been criticised for putting too much emphasis of the ecological footprint and too little on ‘basic human needs’. And as you can see the Social Progress Index is based more on normative indicators of what creates well-being and happiness compared to The Happy Planet Index that ask directly to well-being. No doubt that the Social Progress Index is more compelling to western thinking politicians. The questions is if Michael Porter and his team got it right.

It will be interesting to follow the further development of measures and methodologies that will bring us beyond GDP as a measure of prosperity. It will continue to be a battleground – illustrating conflicting ideologies on what prosperity and progress really is.

An idea could be to integrate the methodology behind the Net Promoter Score, used in evaluation of companies products and services, in the rating of nations. Roughly translated a Net Promoter Scores Question on nations would be: Would you recommend a friend from abroad to move to and live in your country? (0-10 – 0 Lowest 10 Highest). But also this approach comes with some challenges when you try to transfer it from the commercial domain to the ranking of nations.

Nic Marks Happy Planet Index

Nic Marks joins Rebuild21 May 22 – and you Michael Porter?

We look forward to discuss this further when the Founder of the Happy Planet Index, Nic Marks joins Rebuild21 May 22, 2013. See the programme for this years Rebuild21 Conference

WOW Customer Experience

WOW Customer Experience

What is that extra thing that companies like LEGO, Apple, Zappos, Whole Foods and Starbucks has? Ever wondered why some just stand out? We have gathered some inspiration on WOW Customer Experience before next weeks Leadership Academy session on WOW Customer Experience

Start with the “Why?”!

In his very famous TEDx video Simon Sinek presents a simple but powerful model for how great companies and leaders inspire action, starting with a golden circle and the question “Why?” This video highlights the power of truly exceptional companies and how they communicate:

 

WOW Customer Experience at LEGO

This week LEGO made headlines on their Customer Experience after an awesome response to a 7 year old boy who lost his Ninjago Figure. Read and learn how to WOW a 7 year old boy here.

Conny Kalcher, Vice President for Customer Experience visited the Leadership Network in 2010 and Rebuild21 in 2011 to share how LEGO works with Customer Experience. A very systematic approach to working with Customer Experience and Engaging Consumers. Great inspiration:

Co-creation – How to build raving fans, Conny Kalcher, LEGO from Rebuild21 on Vimeo.

Measuring Customer Satisfaction: Net Promoter Score

There are many ways to measure Customer Satisfaction. And often the number of measures and questions you wish to ask customers grow out of proportion. This made Frederick F. Reichheld develop The Net promoter Score (NPS) – a very simple and very popular method.

LEGO has together with Apple and many other global brands integrated Net Promoters Score (NPS), as a core component in measuring customer experience. Net Promoters Score is a very simple principle/score where costumers on a scale from 0-10 are asked: Would you recommend this product to a friend or a person you know? Customers answering 9-10 are promoter. Customers answering 7-8 are passives. And customers answering 0-6 are detractors.

The Net Promoters Score: NPS = % of promoters – % of detractors

Net Promoters Score is as seen a very simple but also very powerful measure. It is very much aligned with research about how people make decisions about buying products, as seen from the Forrester survey mentioned above. Read more about Net Promoters Score here.

Watch Bain & Company’s Rob Markey explain and reflect on NPS:

 

How to work with Customer Experience in your company?

One thing is how to measure Customer Satisfaction. Another is how to improve it. Some companies works with Customer Flow Charts, Touch Point Analysis or Patient Journeys.

To get you inspired and started thinking we share a Scorecard we have developed for the Leadership Academy – a tailor-made simple Customer Experience Scorecard for the ‘consumer electronics category’. Below we have scored Apple:

WOW Customer Experience Scorecard Apple

Some would argue that price should not be part of the diagram as one aligned dimension but should be a separate factor. But we have kept it for simplicity. But keep in mind that where the score on the rest of the dimensions should be based on a backed or assumed customer experience – price should be scored based on an industry/category/product benchmark of de-facto prices.

Do you agree with our score of Apple or do you have feedback on the dimensions? The “Brand / Philosophy /Lifestyle” dimension is what Simon Sinek Refers to as the “Why?”.

-> No one fit’s all: Reflect upon the most critical parameters that shape your Customers Experience today. If you work for a big organisation with many products lines, choose a category or select a specific product and target audience.

 

21st Century Leadership

What’s the higher purpose of your organisation?

Key to successful 21st Century Leadership is the ability to engage customers, employees and partners. And nothing is more engaging than a higher purpose. Surely companies are for profit. But as a leader you need to move beyond profit to engage and motivate.

From last months Leadership Academy session on 21st Century Leadership we have gathered some inspiration on how to: rethink capitalism, lead with purpose, implement democratic leadership and organise in radical new ways.

John Mackey from Whole Foods on the importance of a higher purpose:

 

Umair Haque, Author and Blogger HBR on Constructive Capitalism:

For more inspiration from Umair Haque watch this talk/interview from this years Rebuild21 Conference

 

Terri Kelly, W.L. Gore on a different Management Model – interview with Garry Hamel

 

Paul Green, Morning Star: Self-Management

We had a great Leadership Academy session with Paul Green on October 4 – unfortunately we did not record it, but here is a video where he shares The Morning Star vision about Democratic Leadership.

Leadership Academy

The Leadership Academy 2012/2013 is fully booked and closed for enrolment. But you can get on the waiting list for 2013/2014 or apply for membership of the Leadership Network if interested.

Next Leadership Network & Academy session is November 8, 2012 where Whole Foods will share perspectives on Social Business & The Social Organisation.

Whole Foods

If interested apply for membership of the Leadership Network.

Rebuild21 presents The Leadership Academy…

Rebuild21 presents The Leadership Academy…

At the last two conferences, many participants discussed the possibility of more meetings and creating real change outside of the conference. Well, your comments and concerns have not fallen on deaf ears! With your inputs and suggestions, we’ve created the Rebuild21 Leadership Academy.

Many of you might consider an MBA. But why not meet world-class global innovators instead of reading about them? Some of you already have an MBA. Why not join a new education & network that can help you drive real change in your organisation?

If you haven’t seen our Facebook and Twitter updates, we’ve been busy planning the Leadership Academy, a radical new leadership education and network for 21st century leaders. The Rebuild21 Leadership Academy is new type of leadership education and network, uniting passionate individuals to radically innovate and change their industries.

Why is this different from your typical MBA model? You will…

  • Interact with world-class global innovators and thinkers instead of reading about them.
  • Get challenged by passionate and influential people and develop your leadership skills.
  • Practice your skills based on cases and situations from your own organisation to ensure value for the sponsor.
  • Get access to a unique network of people who can help you drive change in your area of business

For more information, click here or see the FAQ

Send us your applications as soon as possible; seats are limited. Apply for enrolment here.

 

Rethinking Business for the 21st Century - want to join?