Author Archive
The unspoken life of information in organisations
Introduction
Many activities in organisations are driven by information. Chief among these is decision-making : when faced with a decision, those involved will seek information on the available choices and their (expected) consequences. Or so the theory goes.
In reality, information plays a role that does not quite square up with this view. For instance, decision makers may expend considerable time and effort in gathering information, only to ignore it when making their choices. In this case information plays a symbolic role, signifying competence of the decision-maker (the volume of information being a measure of competence) rather than being a means of facilitating a decision. In this post I discuss such common but unspoken uses of information in organisations, drawing on a paper by James March and Martha Feldman entitled Information in Organizations as Symbol and Signal.
Information perversity
As I have discussed in an earlier post, the standard view of decision-making is that choices are based on an analysis of their consequences and (the decision-maker’s) preferences for those consequences. These consequences and preferences generally refer to events in the future and are therefore uncertain. The main role of information is to reduce this uncertainty. In such a rational paradigm, one would expect that information gathering and utilization are consistent with the process of decision making. Among other things this implies that:
- The required information is gathered prior to the decision being made.
- All relevant information is used in the decision-making process.
- All available information is evaluated prior to requesting further information.
- Information that is not relevant to a decision is not collected.
In reality, the above expectations are often violated. For example:
- Information is gathered selectively after a decision has been made (only information that supports the decision is chosen).
- Relevant information is ignored.
- Requests for further information are made before all the information at hand is used.
- Information that has no bearing on the decision is sought.
On the face of it, such behaviour is perverse – why on earth would someone take the trouble to gather information if they are not going to use it? As we’ll see next, there are good reasons for such “information perversity”, some of which are obvious but others that are less so.
Reasons for information perversity
There are a couple of straightforward reasons why a significant portion of the information gathered by organisations is never used. These are:
- Humans have bounded cognitive capacities, so there is a limit to the amount of information they can process. Anything beyond this leads to information overload.
- Information gathered is often unusable in that it is irrelevant to the decision that is to be made.
Although these reasons are valid in many situations, March and Feldman assert that there are other less obvious but possibly more important reasons why information gathered is not used. I describe these in some detail below.
Misaligned incentives
One of the reasons for the mountains of unused information in organisations is that certain groups of people (who may not even be users of information) have incentives to gather information regardless of its utility. March and Feldman describe a couple of scenarios in which this can happen:
- Mismatched interests: In most organisations the people who use information are not the same as those who gather and distribute it. Typically, information users tend to be from business functions (finance, sales, marketing etc.) whereas gatherers/distributors are from IT. Users are after relevant information whereas IT is generally interested in volume rather than relevance. This can result in the collection of data that nobody is going to use.
- “After the fact” assessment of decisions: Decision makers know that many (most?) of their decisions will later turn out to be suboptimal. In other words, after-the-fact assessments of their decision may lead to the realisation that those decisions ought to have been made differently. In view of this, decision makers have good reason to try to anticipate as many different outcomes as they can, which leads to them gathering more information than can be used.
Information as measurement
Often organisations collect information to measure performance or monitor their environments. For example, sales information is collected to check progress against targets and employees are required to log their working times to ensure that they are putting in the hours they are supposed to. Information collected in such a surveillance mode is not relevant to any decision except when corrective action is required. Most of the information collected for this purpose is never used even though it could well contain interesting insights
Information as a means to support hidden agendas
People often use information to build arguments that support their favoured positions. In such cases it is inevitable that information will be misrepresented. Such strategic misrepresentation (aka lying!) can cause more information to be gathered than necessary. As March and Feldman state in the paper:
Strategic misrepresentation also stimulates the oversupply of information. Competition among contending liars turns persuasion into a contest in (mostly unreliable) information. If most received information is confounded by unknown misrepresentations reflecting a complicated game played under conditions of conflicting interests, a decision maker would be curiously unwise to consider information as though it were innocent. The modest analyses of simplified versions of this problem suggest the difficulty of devising incentive schemes that yield unambiguously usable information…
As a consequence, decision makers end up not believing information, especially if it is used or generated by parties that (in the decision-makers’ view) may have hidden agendas.
The above points are true enough. However, March and Feldman suggest that there is a more subtle reason for information perversity in organisations.
The symbolic significance of information
In my earlier post on decision making in organisations I stated that:
…the official line about decision making being a rational process that is concerned with optimizing choices on the basis of consequences and preferences is not the whole story. Our decisions are influenced by a host of other factors, ranging from the rules that govern our work lives to our desires and fears, or even what happened at home yesterday. In short: the choices we make often depend on things we are only dimly aware of.
One of the central myths of modern organisations is that decision making is essentially a rational process. In reality, decision making is often a ritualised activity consisting of going through the motions of identifying choices, their consequences and our preferences for them. In such cases, information has a symbolic significance; it adds to the credibility of the decision. Moreover, the greater the volume of information, the greater the credibility (providing, of course, that the information is presented in an attractive format!). Such a process reaffirms the competence of those involved and reassures those in positions of authority that the right decision has been made, regardless of the validity or relevance of the information used.
Information is thus a symbol of rational decision making; it signals (or denotes) competence in decision making and that the decision made is valid.
Conclusion
In this article I have discussed the unspoken life of information in organisations – how it is used in ways that do not square up to a rational process of decision making. As March and Feldman put it:
Individuals and organizations invest in information and information systems, but their investments do not seem to make decision-theory sense. Organizational participants seem to find value in information that has no great decision relevance. They gather information and do not use it. They ask for reports and do not read them. They act first and receive requested information later.
Some of the reasons for such “information perversity” are straightforward: they include, limited human cognitive ability, irrelevant information, misaligned incentives and even lying! But above all, organisations gather information because it symbolises proper decision making behaviour and provides assurance of the validity of decisions, regardless of whether or not decisions are actually made on a rational basis. To conclude: the official line about information spins a tale about its role in rational decision-making but the unspoken life of information in organisations tells another story.
On the statistical downsides of blogging
Introduction
The stats on the 200+ posts I’ve written since I started blogging make it pretty clear that:
- Much of what I write does not get much attention – i.e. it is not of interest to most readers.
- An interesting post – a rare occurrence in itself – is invariably followed by a series of uninteresting ones.
In this post, I ignore the very real possibility that my work is inherently uninteresting and discuss how the above observations can be explained via concepts of probability.
Base rate of uninteresting ideas
A couple of years ago I wrote a piece entitled, Trumped by Conditionality, in which I used conditional probability to show that majority of the posts on this blog will be uninteresting despite my best efforts. My argument was based on the following observations:
- There are many more uninteresting ideas than interesting ones. In statistical terminology one would say that the base rate of uninteresting ideas is high. This implies that if I write posts without filtering out bad ideas, I will write uninteresting posts far more frequently than interesting ones.
- The base rate as described above is inapplicable in real life because I do attempt to filter out the bad ideas. However, and this is the key: my ability to distinguish between interesting and uninteresting topics is imperfect. In other words, although I can generally identify an interesting idea correctly , there is a small (but significant) chance that I will incorrectly identify an uninteresting topic as being interesting.
Now, since uninteresting ideas vastly outnumber interesting ones and my ability to filter out uninteresting ideas is imperfect, it follows that the majority of the topics I choose to write about will be uninteresting. This is essentially the first point I made in the introduction.
Regression to the mean
The observation that good (i.e. interesting) posts are generally followed by a series of not so good ones is a consequence of a statistical phenomenon known as regression to the mean. In everyday language this refers to the common observation that an extreme event is generally followed by a less extreme one. This is simply a consequence of the fact that for many commonly encountered phenomena extreme events are much less likely to occur than events that are close to the average.
In the case at hand we are concerned with the quality of writing. Although writers might improve through practice, it is pretty clear that they cannot write brilliant posts every time they put fingers to keyboard. This is particularly true of bloggers and syndicated columnists who have to produce pieces according to a timetable – regardless of practice or talent, it is impossible to produce high quality pieces on a regular basis.
It is worth noting that people often incorrectly ascribe causal explanations to phenomena that can be explained by regression to the mean. Daniel Kahneman and Amos Tversky describe the following example in their classic paper on decision-related cognitive biases:
…In a discussion of flight training, experienced instructors noted that praise for an exceptionally smooth landing is typically followed by a poorer landing on the next try, while harsh criticism after a rough landing is usually followed by an improvement on the next try. The instructors concluded that verbal rewards are detrimental to learning, while verbal punishments are beneficial, contrary to accepted psychological doctrine. This conclusion is unwarranted because of the presence of regression toward the mean. As in other cases of repeated examination, an improvement will usually follow a poor performance and a deterioration will usually follow an outstanding performance, even if the instructor does not respond to the trainee’s achievement on the first attempt…
So, although I cannot avoid the disappointment that follows the high of writing a well-received post, I can take (perhaps, false) comfort in the possibility that I’m a victim of statistics.
In closing
Finally, l would be remiss if I did not consider an explanation which, though unpleasant, may well be true: there is the distinct possibility that everything I write about is uninteresting. Needless to say, I reckon the explanations (rationalisations?) offered above are far more likely to be correct 🙂
Projects as networks of commitments – a paper preview
Mainstream project management standards and texts tend to focus on the tools, techniques and processes needed to manage projects. They largely ignore the fact that projects are conceived, planned, carried out and monitored by people. In a paper entitled, Towards a holding environment: building shared understanding and commitment in projects, Paul Culmsee and I present a viewpoint that puts people and their project-relevant concerns at the center of projects. This post is a summary of the main ideas of the paper which is published in the May 2012 issue of the International Journal of Managing Projects in Business.
Conventional approaches to project management tend to give short shrift to the social aspects of projects – issues such as stakeholders with differing viewpoints regarding the rationale and goals of a project. Our contention is that problems arising from stakeholder diversity are best resolved by helping stakeholders achieve a shared (or common) understanding of project goals and, based on that, a shared commitment to working towards them. Indeed, we believe this is a crucial but often overlooked facet of managing the early stages of a project.
One of the prerequisites to achieving shared understanding is open dialogue –dialogue that is free from politics, strategic behaviours and power games that are common in organisations. Details of what constitutes such dialogue and the conditions necessary for it are described by the philosopher Juergen Habermas in his theory of communicative rationality. Our paper draws extensively on Habermas’ work and also presents a succinct summary of the main ideas of communicative rationality.
The conditions required for open dialogue in the sense described by Habermas are:
- Inclusion: all affected stakeholders should be included in the dialogue.
- Autonomy: all participants should be able to present their viewpoints and debate those of others independently.
- Empathy: participants must be willing to listen to viewpoints that may be different from theirs and make the effort to understand them.
- Power neutrality: differences in status or authority levels should not affect the discussion:
- Transparency: participants must be completely honest when presenting their views or discussing those of others.
We call an environment which fosters open dialogue a holding environment. Although a holding environment as characterised above may seem impossible to create, it turns out that an alliance-based approach to projects can approximate the conditions necessary for one. In brief, alliancing is an approach to projects in which different stakeholders agree, by contract, to work collaboratively to achieve mutually agreed goals while sharing risks and rewards in an equitable manner. There are a fair number of large projects that have been successfully delivered using such an approach (see the case studies on the Center for Collaborative Contracting web site).
Once such an approach is endorsed by all project stakeholders, most of the impediments to open dialogue are removed. In the paper we use a case study to illustrate how stakeholder differences can be resolved in such an environment. In particular we show how project-relevant issues and the diverse viewpoints on them can be captured and reconciled using the IBIS (Issue-based information system) notation (see this post for a quick introduction to IBIS). It should be noted that our concept of a holding environment does not require the use of IBIS; any means to capture issues, ideas and arguments raised in a debate will work just as well. The aim is to reach a shared understanding, and once stakeholders do this – using IBIS or any other means – they are able to make mutual commitments to action.
It should be emphasised that an alliance-based approach to projects takes a fair bit of effort and commitment from all parties to implement successfully. In general such effort is justifiable only for very large projects, typically public infrastructure projects (which is why many government agencies are interested in it). It is interesting to speculate how such an approach can be “scaled down” to smaller projects like the ones undertaken by corporate IT departments. Unfortunately such speculations are not permitted in research papers. However, we discuss some of these at length in our book, The Heretic’s Guide to Best Practices.
In their ground-breaking book on design Terry Winograd and Fernando Flores describe organisations as networks of commitments. We believe this metaphor is appropriate for projects too. As we state in the paper, “Organisations and projects are made up of people, and it is the commitments that people make (to carry out certain actions) that make organisations or projects tick. This metaphor – that projects are networks of commitments – lies at the heart of the perspective we propose in this paper. The focus of project management ought to be on how commitments are made and maintained through the life of a project.
Eight to Late 