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How to measure 'national wellbeing'

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Lord Gus O’Donnell delivered the Institute of Public Administration NSW’s Spann Oration 2014 (1) and, as an example of leaders and decision makers grappling with increasingly complex issues, spoke to the challenge of measuring 'national wellbeing'. It would be necessary to develop qualitative and non-financial measures to guide public policy and programs.

So what can we learn from the UK government experience?

Prime Minister, the Hon Tony Blair MP’s vision was that he wanted the UK to be a country ‘at ease with itself’. At the same time (2007), the OECD challenged leaders to develop relevant measures ‘Beyond GDP’.

Given Lord Gus’ significant public sector experience (former press secretary for UK Prime Minister John Major, chief of treasury for Prime Minister Tony Blair during the GFC and then Chief of Staff for Prime Minister David Cameron), he was involved in this challenge.

Think about your local street or community; is it ‘at ease with itself’? What makes a ‘good’ community? Sometimes it’s easier to measure negative features (such as litter, graffiti, assaults) than to define happiness, success, wellbeing or ‘good’.

Some years ago the Department of Community (Victoria) decided on this question as the key indicator of a strong community:

                     How many neighbours in your street would invite you in if you knocked at the door?

Ask your friends and work colleagues, you’ll get some surprising answers. Some people who claim to live in the hippiest ‘communities’ never talk to neighbours. Look around your local shopping ‘precinct’ – now called a ‘village’ to engender a feeling of ‘belonging’ – and you’ll see Hugh Mackay’s 'paradox of the café society’ (where people say the feel connected while sitting, alone, in a bustling place watching others, yet not interacting) play out.

To measure these complex, abstract, notions, you have to ask the right questions. Here are the four key questions that the UK decided to use to define a country ‘at ease with itself’:


Defining the questions is the easier part. Agreeing on an appropriate, valid and robust measure is the challenge.

The typical research starting point is to use the common 1 (not at all) to 10 (completely) rating. Producing 10 options for reporting and decision making can be difficult as it offers too many slight variations which do not give a clear message. If your company is using the Net Promoter Score you will be familiar with explaining the concept and handling questions, such as ‘what is the difference between six and seven?’ People who give the same view in discussion but then can score differently.

The UK Cabinet Office testing

The most popular answers (7 and 8) were not as useful because you need to know the distribution of the responses. What happens if 90% of people respond 7 or 8? You might even want to know other factors, such as country v city resident, age, gender, unemployed v employed and so on. You might find some work, others don’t.

Putting results into three obvious groups (low, medium and high) might be seem efficient but, after debating the differences of opinion as to ‘low’ and so on, the UK Cabinet Office decided to use four Life Satisfaction ratings:

  • Very low (1,2,3,4)
  • Low (5,6)
  • Medium (7,8)
  • High (9,10)

so that, from a policy perspective, it helped target government initiatives. 


Two issues to consider:

Think across and up

When developing a non-financial measure, invest the time to consult and test. Stakeholders and especially cynics help clarify the breadth of issues across business units and situations. You want to generate support amongst those who have to use the metrics. You might find that some work well for most areas but crash on others. Keep trying without losing rigour or your sense of humour.

Don’t reinvent the wheel – it can be career-limiting

Many methods have been developed and tested by others. If you find an interesting approach used in say, the arts or engineering, try it. The process of linking a different application to your context often clarifies thinking.

Save time and angst by using, or further developing, one that already has established credibility. Being able to reference a valid source, such as the ‘The UK Cabinet Office’, will prompt decision makers to listen to you. Further, it de-risks a decision by showing that you’ve researched more widely. Those ‘above’ will focus on what you are proposing, rather than questioning your view or ability to develop a credible measure. 

Two questions to ask:

1. Will this method or metric be able to be measured as part of our reporting? Investigate what information is being collected already and see if it can be tweaked for your purposes. Test it a few times and invite others to question the logic and assumptions.

2. Will this metric or method prove my business case? If you’re arguing for a new direction, a new program or for more resources, test it out with your finance and other project managers. They might be sceptical and the conversation will help you hone your thinking and solve many possible speed bumps. 

Lord Gus noted that Australian sports commentators had ‘proposed’ an measure of success for the London 2012 Olympic Games: 

                                         ‘The UK does well at sports which require sitting down.’ 


(1) Prof Spann, Chair of Government and Public Administration, Sydney University

(2) http://www.ons.gov.uk/ons/guide-method/user-guidance/well-being/index.html

Director Education's Workshop 5 Valuing Company Reputation provides a facilitator toolkit for you to develop non-financial indicators as part of your leadership training. 

For education purposes only

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