Video – Why the Value Pie?


  • Transcript of the video “Why the Value Pie?”

    Video length: 00:25:38

    [Canadian Heritage signature]

    [Canadian Conservation Institute signature]

    [Text on screen:

    Canadian Conservation Institute (CCI)

    Presents an excerpt from:

    "Risk management and risk-based decision making for museum, gallery, archive and historic house collections"

    Speaker: José Luiz Pedersoli Jr., Heritage Scientist, Scientia Pro Cultura

    Session: "Why the Value Pie?"

    This advanced professional development workshop was held March 15-18, 2016 at CCI in Ottawa.]

    José Luiz Pedersoli Jr. (Heritage Scientist, Scientia Pro Cultura): “This presentation has to do with what I said before about the values and significance are at the core of the risk management approach.

    It’s one tool that we have developed and are using as part of the approach which is called the "value pie" we will just try to introduce that to you in this presentation and to justify its use.

    Text appears on screen: “Why a Value Pie?”

    Out of the several definitions of risk that we find around in dictionaries and standards, one is the possibility of loss”.

    [Text on screen: Risk: The possibility of loss]

    José Luiz Pedersoli Jr.: “It's not only the chance of something happening it's also its impact.

    The loss of what? How much is the loss? How big is that loss?

    When we think about risk we look at the chance of that happening and then we also try to assess how big will be this loss.

    This is a quote by a compendium on risk management or risk analysis.

    Sources are there: Model Assist ”

    [Text on screen: In order for a risk analysis to help the manager determine which options are to be preferred, a clear question should be stated in terms of a quantitative estimate]

    José Luiz Pedersoli Jr.: “Several risk experts contributed there and one of them says: "In order for risk analysis to help the manager determine which options are to be preferred", so we're talking about the decisions, "a clear question should be stated in terms of a quantitative estimate."

    We need to quantify something to help us make our decision”.

    [Close-up of a coral reef with the text: Potentially disappeared fraction of species (PDF)]

    José Luiz Pedersoli Jr.: “Some examples in other fields, if you talk like marine ecosystems, when you look at the risk to climate change, that kind of thing, the impact.

    So often they talk about potentially disappeared fraction of species in that marine ecosystem.

    How much are we going to lose of the species that exist there?

    So that's a quantitative indicator”.

    [Workers in protective gear, testing birds, with the text: Number of disease cases. Expected years of life lost]

    José Luiz Pedersoli Jr.: “If you talk epidemiology, like new diseases coming in every day.

    A couple of indicators will be how many disease case do we expect in the country, in the next year?

    Or, how many expected the years of life loss in the population?

    Health ministry they deal with that kind of indicator”.

    [Photo montage of stock market activities and agraph with the text: Profits / losses ($)]

    José Luiz Pedersoli Jr.: “If you are in the stock market, the finance, so just profit or loss.

    How much do I think I'm going to make or lose if I invest there?

    Countries have the risk index, each country has this risk index, for foreign investors, it's a number and investors decide whether or not to invest there based on this risk indicator.

    This is examples of quantitative indicators.

    How about heritage sector, what would be a suitable indicator when we talk about risks to heritage assets?”

    [Photo montage of an art gallery with a policeman, a building in flames, heritage objects, a brick wall, depicting impact of damage by different agents (water, fire, pests, light, vandals/thieves and the text: Expected fractional loss of value to the heritage asset per unit time (e.g., 1% loss of value per century)]

    José Luiz Pedersoli Jr.: “In the approach we are adopting this is the quantitative indicator we are using. The expected fractional loss of value to the heritage asset per unit time.

    For instance, if we identify a certain risk and we don't do anything about it there's a chance that we're going to lose 1% of the value of our heritage asset in a century.

    That will change depending on the risk, but the quantitative indicator we are adopting, when we talk about risk to heritage assets is expected loss of value to the heritage asset, fractional.

    How much percent we are losing a certain amount of time of the value of the heritage.

    This is the indicator we are adopting and that allows you to compare damaged by water, with damaged by fire, with chemical decay, with theft, with the association, etc.

    If you think of all the bad things that can happen to a collection for instance, that will have an implication on the value of that collection and you want to quantify that.

    For instance if you think about fire in the museum, so what's the risk, what's the expected loss of value to the museum collection because of fire, over a century for instance?

    It's fraction of loss expected in the certain amount of time.

    In order to do that, in order for us when we analyze the risk to be able to say, this risk here, because of this risk we expect to lose so much of the value of the heritage asset, in a certain amount of time.

    In order to do that we need to understand how the value of the heritage asset is distributed among its components.

    For instance museum collections may have a couple of treasures like, super high Mona Lisa type important items that are more valuable than the average items in the collection.

    We need to understand that, we want you quantify that, because you want to use that when we assess the risks.

    When we estimate how much would be the loss of value of the collection.

    Just to illustrate, imagine this is a hypothetical collection where we have three categories of important, relative importance of value.

    We have the "treasures", we have the "high value" items and then we have the "average values", the rest of the collection.

    If we have risks that affect the entire collection, we don't need to think about that.

    Like a huge fire burning everything, so the whole asset will be affected.

    But quite often the risk are especially localized, so they affect a part of the collection.

    Like a pest infestation, a water leak, or theft, so they don't affect the entire heritage asset.

    Then imagine the same type of event or damaging process affecting for instance "average value" items or the "treasures" and the "high value".

    So the same event would have quite a different impact on the collection depending on where it happens or which items it affects, so we need to understand that.

    We also want to quantify that so that we can estimate how much of the collection value we expect to lose because of this, or that, or that other risk.

    How do we do that?

    This is an image of a convent, this is in Ecuador. It's a complex that has a church, there is a museum inside, and the building itself”.

    [Photo montage of buildings, a church, objects from the church and a museum collection]

    José Luiz Pedersoli Jr.: “It's a complex heritage asset, the values distributed among the building, the church, the church objects, there is a museum collection there, there is the wall paint.

    If you want to assess risks to this heritage asset, we need to understand how its overall value is distributed among its parts.

    That is how and where we introduce this tool which is the "value pie".

    It's just a way to help us visualize and communicate how did the overall value of a heritage asset is distributed among its different parts.

    This is jumping to another example, but here would see, it's the "pie" diagram”.

    [Four Pie charts and their associated data tables (see: The ABC Method: a risk management approach to the preservation of cultural heritage

    José Luiz Pedersoli Jr.: “This is another example of a heritage asset that is composed of a building, a collection and it's in a heritage site.

    By assessing the relative importance of these three components, based on the mission of the organization, different criteria that I'm going to talk a little bit about later on.

    We can say the "building" represents 50% of the overall value of that heritage asset. "Collections" 40% and "Site" 10%.

    Just an example to illustrate how we present that and for instance inside the building there are different components which have different relative importance between themselves.

    So we have the "windows", historic, very important they represent 20% of the value of the building.

    The "exterior finish" corresponds to about 15% and the "interior finish" 15%.

    Adding them up, we have the 50% contribution of the building.

    We can do the same for the collection where we have textile treasures, textile objects of average value, mixed objects which are treasures and mix objects which are average.

    Each category represents 10% out of the 40% represented by the collection.

    In the site, we have landscape and some important sculptures, so we look at the components of the heritage asset and we assign, we quantify the relative importance of each one of them, because if we want to understand how big will be the impact of a certain risk that damage the windows of the building?

    This corresponds to about 20% of the value of the heritage asset being affected by that risk.

    We want to quantify, identify the relevant components and quantify their relative importance.

    We can also go a step further, this is the same information on the table that's in the diagram.

    Here we see the building, the collections and the site, with their contributions.

    In the building we had windows, finish, exterior and interior finish and their contributions.

    What we can do here is to quantify the relative importance of the single item.

    For instance, in the windows we have 12 of them, in this particular case.

    Because the set of windows represent 20% of the overall value of the heritage asset and we have 12 windows, so here in the last column, we see the contribution of each individual window to the overall value.

    For instance we are looking at the risk that there's a chance of one window being damaged.

    Because of it's taking a lot of rainwater, so this particular window, so there's the risk that's affecting one window.

    Which fraction of the value of the heritage asset is being affected, so we can look it up here, it's about one window corresponds to about 1.7 % of the value of the entire heritage asset.

    One object of average importance from the textile collection represents about this much, of the total value.

    Text appears on screen: “0.008%”

    So we have quantified the contribution of each item of this asset to its overall value.

    When we look at risks that affect the textile objects, or just the windows, or the sculptures.

    We are able to say this risk will impact on this fraction of the value of the total asset.

    Components, relative importance and then down to single item.

    For the risks that affect single items we are able to say, this risk will impact on this fraction of the value of the heritage asset.

    I will show you a concrete example, the recent work we did at the National Archives at Brazil”.

    [The front exterior view of the Brazilian National Archives]

    José Luiz Pedersoli Jr.: “Here we were looking at the components of this collection were archival fonds.

    “There was 1,276 fonds”.

    [Graph of the different types of fonds and the text: Relative importance of the fonds at the National Archives of Brazil (1,276 fonds)]

    José Luiz Pedersoli Jr.: “Here are the different: "moving images", "cartography", "iconography", "executive and legislative" documents, "private", "sound", "rare" documents, this is a branch in the capital, the "library" and then the "judiciary" fonds.

    We wanted to have an idea about how important was each fond for the collection.

    What you see here they're colour-coded by sector and each bar here is one fonds.

    We were able to, by discussing extensively with the colleagues at the archives.

    We have identified the criteria to do this value assessment, like legal value, historic value, aesthetic value, provenance, so there was a set of criteria defined by the institution.

    They after that, they ranked, so they went through each fonds and they analyzed the contribution of each criteria to each fonds, so that they could get an idea about the relative importance of each fonds in the collection.

    The numbers here, what you see in the vertical scale, this is the relative importance of one fonds in relation to the rest.

    So you can see like the judiciary they were the most important part of the collection, because the archives there is a lot of legal and probational value to have there.

    The documents from the government, from the executive and legislative part.

    Because of the mission of the National Archives and the criteria and the weights that were set, so these fonds they show that they are more important for the institution in relation, for instance to cartography.

    Each individual fonds has been assessed and quantified in consultation, because imagine many departments, many heads and everybody's like, "my collection is more important, or even, as important as yours".

    There's a lot of conflict, so the idea is to clearly defined criteria, like, what are the criteria here that determine the importance of these fonds?

    Historic value legal value, provenance and artistic value, static sometimes, if it was a low weight.

    They have identified the criteria they also have defined themselves what is historic value, because for me something, maybe for Stefan, and for you something else.

    That was also important thing to define together and to validate the criteria.

    So once that was clear, so you now let's look at the fonds and see how much each criteria exists in each fonds.

    There was a scale to score them.

    They did that together and this is the outcome and it's traceable, so you're not lost in loops and fights, we can trace that to the definition, to the scoring so it's all there.

    The output is, as I said, the relative importance of each fonds in relation to each other”.

    [A graph and its associated Pie Chart with the text: Value Pie for the collections of the National Archives of Brazil]

    José Luiz Pedersoli Jr.: “From there we can do a "value" pie, from each colour here on the pie, corresponds to the colours on the graph.

    For instance in red you see the contribution of the judiciary codes to the overall value of the archival collection.

    Light blue here 24.1 % is the contribution of the executive and legislative.

    All together these two represent 50% of the value of the entire archive collection.

    That's used as a tool to prioritize, to make decisions and also to look at the risks.

    From the value assessment we do a value pie, and it's also a tool to communicate, so with the "value" pie it's easier to visualize the relative importance of each part of the component”.

    [A bar graph indicating the spatial distribution of value among the storage rooms, floors, and buildings of the National Archives]

    José Luiz Pedersoli Jr.: “We also did things such as, how is the importance of this archive collection distributed in the different storage rooms?

    What you see the codes here “a, b, c”, so each one is one storage room in the archives and here on the vertical axis, this is how much of the value of that archive collection is stored in each room, based on the "value" pie.

    You can see the "F" rooms here, especially this one concentrates a lot, 12% of the value of the entire collection.

    If you look at the fifth floor here, and sixth, so the “F5, F6” together so these are important storage rooms to focus on, in terms of security if you want to make a high priority for climate control and maintenance, for emergency response.

    It was good to have an idea, also spatially, has is this value distributed spatially in the building.

    To make decisions about that and here for instance, very low, almost nothing there in terms of value in these storage rooms, they found that useful as well.

    That is one part, just to try to understand how the value of heritage asset, in our case specifically a collection, is distributed among its parts and we use that value pie, value assessment approach to quantify that, that used when we analyze the risk but it's also a communication tool to show that as a value pie.

    When we analyze the risks we also want to get an idea about how big is the loss of value in each item affected by the risks?

    Imagine you have the objects of a collection that can be damaged by fire, by water, by pests, or by light.

    In each case the degree of damage and the type of damage will be different.

    So we want to have also an idea about, if this event happens, if you have a water event, a pipe leak, hitting some of the objects in the collection.

    How big will be the loss of value in the affected objects?

    If we have light-sensitive objects exposed under certain conditions for 10 years in the future, after 10 years how big will be the loss of value in these objects because of their colour-fading?

    We want to quantify that as well, so that's another aspect and a useful exercise should have a set of the same type of objects, damaged by different kinds of things, such as, this is light-fading from, this is a reference original, light faded, partially burned, here we have contaminated by dirty water in a flood, attacked by insects or stolen”.

    [Photo montage of a unique fan damaged by different elements]

    José Luiz Pedersoli Jr.: “We want to get a feeling out for, in each case how big is the loss of value, if this happens compared to the current state?

    For instance theft will be total loss, theft is straightforward, but if we have a partial burn or colour-fading how big is that loss in relation to the current condition of the object?

    We also try to quantify that and we'll talk more about that in the afternoon.

    So just to give you an idea, some concrete situations, this has been in the Netherlands in 2011 a theft of seven paintings in a collection in a museum, but these paintings were Picasso, a Monet, and a Matisse”.

    [A police or security officer shown outside a gallery at night and the image of a pie chart is superimposed onto the photograph]

    José Luiz Pedersoli Jr.: “What has been the loss of value to this collection?

    If you are considering the entire collection and its seven items that have been stolen and given their relative importance, because they were paintings by very important artists.

    What has been the loss of value to this collection?”

    [Staff hanging up portions of the collection to dry and pie chart]

    José Luiz Pedersoli Jr.: “Then we can think of all kinds of mishaps, so this for instance is our National Library in Brazil.

    A water pipe from the air conditioning system has broken, this is three years ago, so lots of water coming down the stacks and affecting a part of the collection.

    Water damage is different from theft, in terms of loss of value in each affected item.

    So how do we assess, or what's the fraction of the value of the collection of the National Library that's been affected in this case?

    This I'm showing you things that have already happened, but when we talk about risks we try to imagine what can happen in the future?

    Similar to that, or to the risk that are recurring.

    Which part of our collection, or our heritage assets will be affected?

    How important it is and what the expected loss of value in the affected items?

    That reasoning helps us understand and quantify the risk.”

    [Photo montage of various fire damage, inside and outside of buildings, and a pie chart.

    José Luiz Pedersoli Jr.: “Fire, so different types of damage, different fractions of the heritage affected and to different degrees.”

    [Photo montage of pest damage to the collection, a rodent, and a pie chart.

    José Luiz Pedersoli Jr.: “We have pests, this is a library, some small damage by rodents on books.

    We can start to think about that, so think into the future.

    What are the things that can affect our heritage asset?

    From sudden catastrophic to slow, gradual and cumulative.

    Which part of the heritage assets will be affected?

    How important it is in relation to the rest of the asset and how big will be the last of value in the affected items?

    So that's just a teaser and I think we are we good here, so thank you very much.”


    [Canada wordmark]

    This video was created by the Canadian Conservation Institute as part of the workshop “Risk Management and Risk-based Decision Making for Museum, Gallery, Archive and Historic House Collections.” Learn more about risk management for heritage collections and view the risk management webcast recordings.

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