Managers and information : have times changed ?

“The way mana­gers pro­cess infor­ma­tion seems to be locked inside their brains, like a black box,” Hen­ry Mintz­berg wrote in 1984. Do we know more now ? Not real­ly, and that lack of unders­tan­ding could lead us to ignore deep shifts that rede­fine the manager’s very role, through what they do with information.

What is infor­ma­tion for ? Making deci­sions, of course. As Auguste Comte said, “Forek­now­ledge is power”. But the role of infor­ma­tion in deci­sion-making is per­haps overs­ta­ted, and it’s not always very clear. Are all deci­sions real­ly well-informed ?

More sim­ply, we could say that infor­ma­tion helps to reduce uncer­tain­ty. Uncer­tain­ty is eve­ryw­here and infor­ma­tion is the anti­dote, as well as one of the main goods pro­vi­ded by the eco­no­my, Frank Knight, the eco­no­mist who intro­du­ced the dis­tinc­tion bet­ween risk and uncer­tain­ty, explains. This also opens up fun­da­men­tal ques­tions such as free­dom of the press and plu­ra­lism, as well as tech­ni­cal, high-impact ques­tions such as finan­cial infor­ma­tion and the qua­li­ty of public statistics.

Infor­ma­tion can also help solve pro­blems, advance on a pro­ject, for­mu­late results or main­tain skills. This relates to the big ques­tion around indi­ca­tors and, more gene­ral­ly, feed­back when stra­te­gies are being imple­men­ted. Infor­ma­tion can help improve an organisation’s performance.

It’s also connec­ted to the future. Infor­ma­tion seems cru­cial to steer a com­pa­ny in a world where playing catch-up is no lon­ger an option. In this Schum­pe­te­rian world, inno­va­tion can make all the dif­fe­rence and, ulti­ma­te­ly, enable com­pa­nies to sur­vive. It allows them to adapt to their envi­ron­ment, assess ongoing changes, avoid errors, save time and conserve not only the organisation’s resources, but the manager’s as well. “Grea­ter know­ledge allows you to save your power,” Phi­lippe Bau­mard wrote in his pio­nee­ring work on eco­no­mic intel­li­gence, Stra­te­gy and Sur­veillance of Com­pe­ti­tive Envi­ron­ments (1991). The role of moni­to­ring new deve­lop­ments can be dele­ga­ted or even exter­na­li­sed, but it must stay connec­ted to the deci­sion-maker, as a major ele­ment of stra­te­gic orientation.

Infor­ma­tion allows mana­gers to adapt to their envi­ron­ment, assess ongoing changes, avoid errors and save time.

In an oft-quo­ted article (“The Desi­gn School : Recon­si­de­ring the Basic Pre­mises of Stra­te­gic Mana­ge­ment,”¹ 1990), Hen­ry Mintz­berg esta­bli­shed that mana­gers dis­tin­guish bet­ween three kinds of infor­ma­tion : first­ly, one-off pieces of infor­ma­tion that shed light on a par­ti­cu­lar pro­blem ; second­ly, infor­ma­tion nee­ded to steer a com­pa­ny ; and, third­ly, gene­ral infor­ma­tion to unders­tand what’s going on in the com­pa­ny and beyond, and place the com­pa­ny with rela­tion to stra­te­gic evo­lu­tions and power redis­tri­bu­tion processes.

Hum­bert Les­ca crea­ted ano­ther typo­lo­gy, clas­si­fying infor­ma­tion accor­ding to their pur­pose on the one hand, and their ori­gin and tra­jec­to­ry on the other. In the first cate­go­ry, he inclu­ded infor­ma­tion that is essen­tial to the run­ning of a busi­ness, influen­tial infor­ma­tion that posi­tions how various players act, and anti­ci­pa­to­ry infor­ma­tion through which deci­sion-makers can fore­see cer­tain changes in their envi­ron­ment. In the second cate­go­ry, he dis­tin­gui­shed bet­ween infor­ma­tion with tra­jec­to­ries from one part of a com­pa­ny to the other, inter­nal-to-exter­nal tra­jec­to­ries and exter­nal-to-inter­nal trajectories.

A third clas­si­fi­ca­tion by Bengt-Åke Lund­vall breaks down eco­no­mic infor­ma­tion into “know-what” (facts), “know-why” (scien­ti­fic know­ledge) and “know-how” (tacit knowledge).

Final­ly, a fourth clas­si­fi­ca­tion esta­bli­shed by Bru­no Hen­riet and Mau­rice Imbert² dis­tin­guishes bet­ween ope­ra­tio­nal infor­ma­tion, which enables action to be taken, and evo­ca­tive infor­ma­tion, which enables a company’s repre­sen­ta­tion to be built.

That last clas­si­fi­ca­tion seems to be the most effec­tive. Com­pa­ny mana­gers must ope­rate on two levels, and two alone : the day-to-day and the future. They must take care of the most tri­vial details rela­ting to the run­ning of the com­pa­ny but also think ahead. So, they need both ope­ra­tio­nal infor­ma­tion and evo­ca­tive infor­ma­tion. Hen­riet and Imbert’s clas­si­fi­ca­tion fits the rea­li­ty of the manager’s role. It also has the bonus of com­bi­ning Mintz­berg and Lundvall’s categories.

Ope­ra­tio­nal infor­ma­tion com­bines Mintzberg’s first two cate­go­ries (one-off pieces of infor­ma­tion to shed light on a par­ti­cu­lar pro­blem and infor­ma­tion nee­ded to steer a busi­ness) and Lundvall’s first two cate­go­ries (know-what and know-why). Evo­ca­tive infor­ma­tion comes under Mintzberg’s third cate­go­ry (gene­ral infor­ma­tion to unders­tand what’s going on in the com­pa­ny and beyond) and Lundvall’s third cate­go­ry (know-how).

These clas­si­fi­ca­tions demons­trate the link bet­ween infor­ma­tion and the three tasks tra­di­tio­nal­ly assi­gned to com­pa­ny mana­gers : main­tai­ning connec­tions with sha­re­hol­ders, orga­ni­sing the com­pa­ny to suc­cess­ful­ly com­plete pro­jects, and defi­ning a stra­te­gy. Clas­si­fying roles in this way shows the dif­fe­rence bet­ween CEOs and mana­ger (even senior ones) when it comes to infor­ma­tion. Exe­cu­tives also receive, pro­cess and use a consi­de­rable amount of infor­ma­tion. But, unlike CEOs they do not have a deci­sion-making role in these three tasks (if they are invol­ved in them). While this simple obser­va­tion may seem tri­vial, it changes the entire pers­pec­tive on information.

Mana­gers must present spe­cia­li­sed, confir­med infor­ma­tion to sha­re­hol­ders to convince them. For a com­pa­ny to run smooth­ly, infor­ma­tion needs to be regu­lar­ly pas­sed on to moni­tor what is going well, but also (main­ly) what is not. The aim of this poli­ti­cal role is to assess the company’s ope­ra­tion. The key point is clear­ly to build com­pa­ny stra­te­gy, which can only be per­cei­ved by plan­ning for the future, using infor­ma­tion acqui­red in the past and pro­ces­sed in the present.

The infor­ma­tion nee­ded by mana­gers must cor­res­pond to the year-long pers­pec­tive (e.g. laun­ching a new mass consump­tion pro­duct), years-long pers­pec­tive (e.g. com­pa­ny pur­cha­sing and restruc­tu­ring) and even decade-long pers­pec­tive (e.g. buil­ding a jum­bo plane). Mana­gers need to be able to anti­ci­pate events through this infor­ma­tion. Some­times, it comes from the com­pa­ny or from research, of course, but also, per­haps more impor­tant­ly, from high­ly varied data, col­lec­ted in uncer­tain contexts.

This varied data can be igno­red. It only exists through the will of com­pa­ny mana­gers, Les­ca stresses. On the other hand, infor­ma­tion with high added value, which is very dif­ferent to that floo­ding the entire orga­ni­sa­tion, shows mana­gers’ proac­tive work to acquire, pro­cess and make use of information.

The way infor­ma­tion is being used has evol­ved and, with it, theo­ries that under­pin its ana­ly­sis and pro­ces­sing. Infor­ma­tion that is use­ful for mana­gers is no lon­ger an imme­diate tar­get, as it was in the past and still is for lower levels of an organisation.

Tru­ly use­ful infor­ma­tion will pro­voke a change in how the mana­ger sees the rea­li­ty sur­roun­ding them, James G. March noted. “Infor­ma­tion is used more for vague changes in optics rather than to have a direct impact on deci­sions. Most infor­ma­tion gathe­red and recor­ded in orga­ni­sa­tions is not used to pro­vide direct assis­tance in deci­sion-making as a prio­ri­ty, but rather as a foun­da­tion to inter­pret facts and edit them into a coherent sto­ry. As a mea­ning­ful struc­ture emerges from infor­ma­tion and deci­sion-making pro­cesses, each par­ti­cu­lar deci­sion becomes a part of it. Modern research on data pro­ces­sing seems to show that explo­ra­to­ry ana­ly­sis of data col­lec­ted without a spe­ci­fic use is clear­ly more com­mon than deter­mi­ning needs for infor­ma­tion beforehand.”

March high­lights the conse­quences of this ana­ly­sis – infor­ma­tion gives mea­ning to a deci­sion-making situa­tion and changes the way both options and sought pre­fe­rences are struc­tu­red. It becomes a conver­sa­tion topic and even­tual­ly contri­butes to chan­ging deci­sion-making strategies.

A good infor­ma­tio­nal stra­te­gy moves for­ward “infor­ma­tion, desires, options” in a pro­duc­tive direc­tion by simul­ta­neous­ly deve­lo­ping ideas of what is “pro­duc­tive” and the tools to get there. Infor­ma­tion pro­vides a know­ledge and mea­ning base that can be used for pos­sible actions, or to explain expe­rience. It’s an invest­ment in col­lec­ting know­ledge and an aid in defi­ning and choo­sing pre­fe­rences and options.

But does the manager’s use of infor­ma­tion ful­ly fit into this ana­ly­sis ? Isn’t the main advan­tage of infor­ma­tion to help pre­dict the organisation’s future and give it mea­ning ? We could rephrase things thus­ly, in a way that may seem para­doxi­cal : the mana­ger doesn’t pro­cess infor­ma­tion to make deci­sions, but rather to turn this infor­ma­tion into know­ledge, to say it and make it part of the orga­ni­sa­tion and its crea­ted future. Nowa­days, and even more so into the future, the manager’s role is to pro­vide an ever-chan­ging over­view of what is coming.

This column is the repost of an article that was ori­gi­nal­ly publi­shed in the Paris Inno­va­tion Review on 14/03/2018.