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.