In my most recent article for Talkmarkets I discussed the major differences between Globanomics, Finance, and Economics.  In that same article I promised my followers to begin explaining the foundation and characteristics of my own personal macro-globanomic model.

Unlike most macro-economic models, which quickly become so complex that the economists themselves lose themselves within the trees of the forest, my macro-globanomic model is easy to understand from both a conceptual and mathematical viewpoint.

The mathematical framework behind my model uses the Performance Evaluation Report Card (PERC) methodology and the conceptual foundation is essentially a derivation using Maslow’s Hierarchy of Needs. 

PERC is an operational improvement methodology designed to facilitate rapid and ongoing performance improvements across peer groups.  Using commonly accepted performance metrics and market competition to drive process improvements, PERC endeavors to jump start innovation throughout all levels of an organization simultaneously.  

PERC can be applied to individuals, teams, business units, companies, cities, countries, or any other organizational form, as long as there is a common degree of similarity between comparative units.   The basic theory behind PERC relies on the following two fundamental principles:

1. “Effective” performance operations can be analytically distinguished from “less effective” performance operations using reliable methods of unbiased statistical analysis that is acceptable to all and which can be regularly updated and monitored over time; and
    
2. Everyone within an organization prefers playing for a “winning team” rather than a “losing team”.

The objective behind PERC is to improve performance throughout an organization, using both internal and external organizational indicators in a feedback loop that provides a way to monitor progress towards goals over time. 

PERC can be viewed as having three phases in its application: (1) an Endorsement & Evaluation Phase; (2) an Analytical & Scoring Phase; and (3) a Feedback & Learning Phase. 

PERC is performance oriented and does not try to reengineer existing business processes, but instead challenges managers to use a “report card mechanism” to make good decisions as to where efforts should be allocated.  It also relies upon a natural preference for individuals to be evaluated with clear feedback and rewarded quickly and fairly for their efforts large and small.

PERC is distinct from other analytical performance methodologies such as Six Sigma or Process Reengineering that focus on just one specific process or output and/or attempt to replicate one single “best practice” among dozens of similar entities.  Proven in practice, PERC has a wide applicability and deserves to be a standard management practice for process improvements.  

As mentioned before, using commonly accepted performance metrics, weighted and measured against peer group members (in globanomics this means peer group nations), it becomes quite easy to distinguish top performers against poor performers.  As this information is shared world-wide, it challenges poor performing nations to improve their efforts.  As time moves forward all improvements are factored in, thus raising the average measurement, and thus the average world performance.

What are the commonly accepted performance metrics in globanomic terms?  As a starting point consider these:  food; water; shelter (housing); personal safety; health; employment; business development; infrastructure; energy; technology; scientific and other creative activities.

What are the data sources where such information can be found?  Here is a beginner’s list of certified providers of comparable national statistics: (1) CIA World Factbook; (2) World Health Organization; (3) United Nations; (4) World Food and Agriculture Statistical Pocketbook; (5) World Bank.  In truth, an overall rating of a nation’s performance over a broad range of truly relevant criteria as I mentioned above is not as difficult as it first may sound.

Now I do not want to get ahead of myself, but I will say that in my own macro-globanomic model, the United States of America, is truly the best national performer overall in its peer group consisting of nations with a GDP greater than $1 trillion.  The United States may not be the best performer in every globanomic category in my model, leaving room for its own improvement, but it has been and remains the best overall performer to this date.

The nice thing about my PERC macro-globanomic model is it can be run over time, looking at the past in terms of the present and offering opportunities for improving the future for the nations of the world.  Although there are subtle conceptual theories within the PERC methodology that I have not mentioned herewith, I believe one thing you should take away from this brief explanation of my macro-globanomic model is this:  America is a great nation; America has been a great nation; and unless new leader screws things up somehow, America will continue to be a great nation despite his missteps.

In my next article I intend to explain how I developed my macro-globanomic peer groups for the PERC methodology and specifically for the national peer group in which the United States is comparably measured.  Until then have good ones.