New Performance Indicators

Financial performance has long been the critical indicator of success for companies and how countries are defined as first world or third world. The Gross Domestic Product (GDP) and the Gross National Product (GNP) are the aggregate of the monetary value of a country's resources and account for the economic utilization of these resources. In today's environment, organizations recognize that other measures are needed to run the business and ultimately determine its success. That concept has also spawned another idea of using alternate measures to assess the success or happiness of a people – happiness economics.

What is Happiness Economics?

This is a set of indicators that attempts to measure the life satisfaction of a group of people. In 1972, the concept of Gross National Happiness (GNH) was created by the king of Bhutan, a small Himalayan kingdom. It is his conviction that the government's ultimate purpose is to promote people’s happiness. With that, he declared that the GNH was more important than the Gross Domestic Product (GDP), long considered to be an indicator of the well-being of a nation.

An article in the New York Times on October 3, 2005, described the "Plateau of Happiness," in which it was indicated that a country's wealth may not always dictate the happiness of its people. The article went on to demonstrate that many countries, particularly in Latin America, had higher happiness indices than their economic situation would predict.

Generally, the GNH index is driven by balanced, equitable development, environmental conservation, and promoting culture, health, and good governance. A growing number of economists, corporate leaders, and social scientists worldwide are trying to develop measurements that account for the flow of money and consider access to health care, time with the family, conservation of natural resources, distribution of basic amenities, and other factors. Developing measures that will eventually drive the GNH has met with some controversy, as the actual index would depend on the individuals who created the measures and their personal goals and perspectives.

Why the interest in GNH?

· The concept provides another means of developing a group of performance drivers

· The indicators provide a holistic approach to evaluating the overall health and well-being of a community

· Developing and using performance measures enables us to manage the outcome

In performance consulting, we are all about having the proper measures to drive the right results.

Imagine what the world would be like if we could determine the GNH for each country. Politicians could now point to an increase or decrease in the GNH during their term in office. There would be a direct link between actions or activities performed and the GNH.

The "GNH index" is a theoretical concept that attempts to balance prosperity against preserving cultural traditions, protecting the environment, and maintaining a responsive government. 

However, it might eventually be used by decision-makers within a government as they strive to create an economic environment within which developmental activity can thrive according to the index defined by the Gross National Happiness.

GNH - Food for thought.