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.