Mopsos

On ManyWorlds I downloaded Perfect Information and Perverse Incentives: Costs and Consequences of Transformation and Transparency from Michael Schrage
It is a truly brilliant paper, which argues, based on documented evidence both in the military and in finance that "the benefit of information superiority may be vastly overestimated".

The key idea is that in a world of information overflow, where more and more analysis is needed to interpret information, the natural tendency to distribute the burden of information analysis on many people often generates different interpretations, thus more disagreements and more decision-making problems. "Dramatically more information means dramatically more power and influence of analysts (...) it gives more ammunition to the disputants"

Even worse, more information and more transparency on what is really happening puts a new stressful burden on the management. "The more transparent investments are, the more accountable investors are. The more transparent the enterprise becomes, the more accountable management becomes. Verification increasingly substitutes for trust (...) Just as in finance, the rise of transparency creates perverse incentives for military decision-makers to take refuge in deliberate ambiguity, outright concealment and 'cover your ass' risk-averse behaviors. Individual accountability gets blurred into institutional accountability."
The conclusion in the form of a paradox: "The more choices you have, the more your values matter".

Indeed, if information analysts share a same set of values, it is likely that their interpretation of a same set of informations will be at least compatible and reinforcing one another if they are not similar. There was this dot-com era idea that "Information Wants To Be Free", and this debate over "if so, who's going to pay for it?". Michael's paper reinforces my personal conviction that "information wants to be free within communities", which by the way also answers the question about who's going to pay for it (communities!).

It makes me think of a paper by Alex Bennett former Chief Knowledge Officer (I think) of the Department of the (US) Navy, where she wrote, back in 2001:

"Closed system [industrial age] management thinking contains a world of walls, barriers and dividers, including functional stovepipes. While organizational structures are important, if they are constructed in a restrictively closed manner where individuals are not exposed to a larger view they provide limited perspective which can inadvertently lead to dead-end solutions. Like the caged bird, closed system organizations are at increased risk of not being able to adapt to changing conditions.

Today, there is a radical shift from closed to open system thinking taking place in a broad range of disciplines, which is increasing an organization's ability to remain adaptable in face of the changing environment. A key to understanding adaptability rests in understanding the two main differences between closed and open systems; flow across boundaries and flexible infrastructure. Flow across boundaries (in the context of the Knowledge Age) portrays the actual interconnectedness and transference of data, information, knowledge, patterns, models and ways of informing and learning. Infrastructure (in the context of the Knowledge Age) means not only the tangible physical organizational support structures, but also intangibles such as operating rules, regulations, culture and philosophical constructs. A balance between these two factors needs made, else breakdown will ensue."

No-one has commented on this entry (yet).

Thanks for signing in, . Now you can comment. (sign out)