November 1 1989 by Chief Executive
To the Editor:
In “The Information Edge,” by Alexander D. Jacobson, chairman and CEO of Inference Corp. (March/April 1989), the author proposes that “the information edge” is attainable through using information technologies. He also maintains that to assure the adoption of new technologies, the CEO should be the driving force.
I fully agree with Mr. Jacobson’s second contention: that the adoption of innovations, technological or otherwise, are enhanced immeasurably when the CEO places a stamp of approval on the change. I ardently disagree, however, with his first contention: that the information edge in modern business is achievable through technology alone. Another word for technology is tool. Information technologies are merely tools that allow humans to augment the performance of certain repetitive information-processing tasks. It is important not to be overawed by the speed of large modern computers. The tasks they are performing rapidly and in large volume are still simple tasks.
The real information edge in modem business derives from a prudent understanding of your organization’s information resources. You can outpace the competition only by using information resources to your maximum benefit. Truly efficient utilization of information resources means putting the right information in the right hands at the right time in the right form.
Unfortunately, this seemingly simple goal is hard won, especially when some of the unique characteristics of information are not fully grasped by decision makers. Five examples of these characteristics are: intangibility, reproducibility, ephemerality, processing dependency, and veracity.
Information, per se, is intangible; that is, it is not composed of matter and energy. The report on your desk is not information, but rather contains information encoded in a language. To paraphrase Mr. Jacobson, information management is concerned with what people know rather than what they do.
Because information is intangible, the use of information is unlike any other type of organizational resource. With most resources, to use some of your stock of that resource reduces the amount of the resource that you have. This is not true of information. In fact, to use information can often enhance your stock of information. A simple example is when you use data to produce summaries or trends. You have not lost the original data and have gained summary or trend information. This principle can also operate in less obvious ways. You may retrieve some of your information resources, think with them, and come up with a new and innovative idea.
All information is ultimately ephemeral. It comes into existence at some point in time, is shared with others, stored for future use, but eventually it is either forgotten or discarded as no longer valuable enough to retain. This is a particularly important characteristic when evaluating which information resources are worthy of the expense of retention and which should be discarded.
Information must be continuously processed during its life cycle to exist. Have you ever made an appointment over the phone, failed to note it on your calendar, and had it slip your mind? The most important process acting upon information to ensure its preservation is storage. The second most important process is adequate retrieval pointers. If you cannot retrieve it, storing information is in vain.
Information also has veracity. This is sometimes interpreted in terms of accuracy and sometimes in terms of truth value. On the negative side (i.e., false information), it is useful to distinguish between misinformation (inaccurate but without malice or intentional deception) and disinformation (malicious and intentional deception). The importance of the distinction arises when considering what to do (e.g., whether to assign blame).
These are just a few ways in which information is a unique resource. Managing information resources entails taking into consideration these and other characteristics when developing strategies and policies. Effectively, efficiently, and intelligently managing information resources, regardless of the types of tools used to assist the human mind, is the only true way to achieve the information edge in modern business, politics, economics, or everyday life.
Richard AV Diener, Ph.D.
Information Management Group Macro Systems, Inc.
Alexander D. Jacobson replies:
Dr. Diener feels I am overly concerned with the technology of information systems and not concerned with information per se that the technology manipulates. He asserts that “some of the unique characteristics of information are not fully grasped by decision makers,” implying that businessmen do not understand what information is and as a result, cannot even begin to apply it to gain competitive edge.
I believe it is academic whether businesspeople understand the nature of information from an abstract, technical standpoint. Businesspeople know what information they seek and when they have obtained it. The difficulty is not understanding what information is; rather, it’s getting the requisite information in a timely, accurate and useful way.
In this era of enormous databases and complex computer systems, most business-people are glutted with unnecessary facts and starved for knowledge about the business issues they deal with. I definitely do not think their problem is naivete about the nature of information. Nor do I believe that those who do understand the abstract nature of information are better positioned to provide the specific knowledge needed by management.
The problem, I believe, is that the information needed by businesspeople, even though definable by them, cannot be had at the time they need it, in the form they need it, at the place they need it, and at a cost their company can afford. In addition, these things cannot be accomplished often enough and over enough job functions within the company for the company to be as competitive as it could be were such vital information available.
I further claim that the information technology that is needed to provide information on this basis is available today, but its effective use is impeded by institutionalized barriers within our companies. And in my opinion, this is the real problem: Culture gaps exist in large corporations, and these gaps must be bridged.
In fact, Dr. Diener’s rebuttal itself is, to me, clear evidence of these cultural problems. Dr. Diener seems to speak from the standpoint of technical professionals. I do not sense in his rebuttal a posture that integrates pure business considerations with his clearly articulated technical argument.
Only the CEO is capable of bridging culture gaps-that is, encouraging technologists like Dr. Richard Diener to use their experience and knowledge of information and its technologies to provide the pragmatic, focused business knowledge businessmen require to make their companies more competitive.
To the Editor:
It was very refreshing to see someone who has looked at this whole hazardous waste cleanup issue and come up with a sensible proposal to handle the problem. I refer to the proposal of M.R. Greenberg, chairman, president and CEO of American International Group, which I saw in the CEO Brief an addendum to the July/ August issue of Chief Executive magazine.
I couldn’t agree more that we have to quit spending all of our time and money fighting over who will pay rather than spending that same time and money in correcting the problem. Greenberg has hit the nail squarely on the head.
My congratulations to you for presenting some very clear thinking!
Robert J. Dineen
President and CEO
The Marley Company
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