Complex Made Simple

Are you battling infobesity?

An epidemic is plaguing the corporate world and people have already coined a word to describe it: infobesity. Companies have overindulged in information. Some are finding it more difficult than ever to decide and deliver.

Like conventional obesity, infobesity has many sources. The never-ending stream of emails and voicemails. The PowerPoint presentations that dominate so many meetings. The endless reports from finance, marketing, cross-functional teams and external researchers.

Useful information creates opportunity and makes for better decisions. But the torrent that flows through most organisations today acts like so much bad cholesterol, clogging their arteries and slowing their reactions.

Why does infobesity compromise performance? It’s mostly because we human beings can process only so much data. An uncontrollable flood of it overwhelms us, and we feel stressed. Our systems shut down, and our capacity to absorb additional information actually decreases.

To cope with the flood, our brains develop tricks and habits. We rely more on information that is closer to home than on information from a distant source. We remember data presented in one format and forget data presented in another. We even squirrel away bits of information for our own private use. (Maybe that’s why local offices know things that the corporate centre doesn’t, and vice versa.) All such reactions hamper our ability to make decisions based on the best available evidence and performance suffers accordingly.

The decision solution

Fixing the infobesity problem requires stepping back from the daily flood of data. It requires reexamining how an organisation operates and what kind of information it really needs.

At the root, a company’s performance is simply the sum of the decisions it makes and the actions it takes every day. The better its decisions and its execution, the better its results. However, some of those decisions matter more than others.

Successful companies know which decisions are most important, and they establish well-understood processes for making and executing them. They also know who plays the key roles in each one.

The goal, then, is to generate the data required for critical decisions – no more and no less. This information should get to the right people at the right point in the process, in a format designed for maximum understanding and ease of use. This kind of decision-based approach is a sure cure for infobesity, sort of analogous to eating less and exercising more.

There are really just four requirements:

Focus. Companies today generate data that no one needs and put it into reports that no one reads. The business units at one energy company, for instance, used to report performance on some 400 individual line items. Then the company mounted a “focused information sets” initiative, which reduced the number of line items to 30 and lowered reporting costs. Since those 30 covered the vast majority of items that truly add value, the move led to better business decisions while saving everyone’s time.

Standardisation. Is the data you need for decisions in the same format and easily accessible? A major gaming company relied in the past on each of its facilities to decide on promotions to customers and then analyse the results. When it centralised and standardised that function, it discovered that patterns that seemed valid for a single property did not hold up in the aggregate. The standardised information was not only cheaper to provide; it also led to better marketing decisions.

Timing. Companies sometimes think that decision makers need all available information at the beginning of a decision process. That’s not always the case. In certain situations, companies can save  a considerable amount of money when they provide decision makers with only the data relevant to a given decision.

Quantity and source. In the quest for Big Data, companies mine electronic warehouses for insights about customers, transactions and products. Some manufacturers even use Big Data to help frontline employees make production decisions and Big Data often provides executives and managers with highly useful information for making key decisions.

The test for Big Data is whether its output is relevant to key decisions. And it should complement rather than replace other sorts of information. “Small data”, such as customer feedback – direct and often qualitative – is particularly helpful for the everyday decisions made by frontline employees, which often add up to considerable value over time.

Information is cheap and easily available today, so it is probably no surprise that many companies suffer from too much of it. But organisational infobesity undermines performance and demoralises the employees who have to cope with it, leaving people feeling like they are trapped inside an “endless runner” video game.

Smart companies will address infobesity sooner rather than later – by tailoring their information flows to their most important decisions.