A Workgroup member eagerly hired an Analyst to channel their untamed river of data into information that would power decisions and generate confidence. But it turned out pollution was a problem: the Analyst spent a year cleaning data before making their first chart.

We’re told we’re in the Information Age. Actually, we’re still in the Age of Drowning in Bad Data.

Data is a turbulent river fed from a hundred sources. How can managers channel that river into a steady flow of reliable information and management knowledge?

3 Big Ideas

  • You can easily drown by collecting bad data or by collecting the wrong data
  • Data becomes the information that shapes small and large decisions as well as culture
  • Channel your knowledge management toward the questions you need answered

Participants

  • Susan Dineen
  • Bob DeVita
  • Bryon Johnson
  • Michelle Harris
  • Tim Lerdahl
  • Bill Mitchell
  • Tom Oakley
  • Valerie Renk

But First, Definitions

Information is a useful arrangement of data. Knowledge is a useful arrangement of information.

The standard definition of 4.4.3 Knowledge management is, “How to easily collect, remember, and apply important information of different kinds.” The Workgroup covered a wide range of topics, but this post focuses on “collecting and remembering.” The group decided to tackle “applying knowledge” in the next Workgroup. (To try a Workgroup, contact The Center at info@theindex.net.)

A member described their need for good information: “My first boss said, ‘In God we trust. Everyone else brings data.’”

As our Member’s Analyst story made plain, collecting and storing good data isn’t trivial. Knowledge is built on a foundation of data, and there are limitless types of data. Data (and, therefore, information) are formal or informal, qualitative or quantitative. And data and information are subjective and relative. A market study is a unit manager’s information set, but a CEO’s data point. Data is also ephemeral: its value fades with time and evolving circumstances. But a clean, consistent data set lets managers repeat successes.

The Value of Following Best Practices

Knowledge management has practical benefits beyond daily decision-making. Good knowledge management means gap-free succession, onboarding, and training. It means avoiding frustrating reinvention. It’s useful for do-or-die “information events,” like refinancing, business sale, integration, or disaster response.

Trusting the data carries over to trusting the organization. Sharing data is part of “transparency.” But that fails if the data’s bad.

It’s not enough for your data to be accurate. It also has to be complete. Many businesses have gone under because they only collected comforting information. It’s natural to avoid bad news and contrary perspectives, so it’s important to ask sharp questions. See the Question Craft posts in our blog to avoid this trap.

What’s the solution to the problem of the flood of dubious data? The Approved Resources at 4.4.3 Knowledge management describes best practices.

Start with the end in mind. Too much information is almost as bad as too little information or bad data. When designing a knowledge management system, know what questions you need the information to answer. Create a table of questions that are important for different time scales: Hourly, Daily, Weekly, Monthly, Quarterly, Annually, and Horizon.

Questions are characterized by how they can be answered. Some are answered with either Yes or No (“Did the servers have any breaches yesterday?”). Others are answered with a single number (“What was our market share in the US last year?”) Another type of question is answered with one of two alternatives (“Is plant turnover increasing or decreasing?”) Some “horizon” questions prompt discussion (“How are each of our project managers performing?”).

Be a data skeptic. A Workgroup member pointed out that their project database gets tapped over 100 times a day: so one bit of bad data could infect 100 decisions daily. Assume your data is inaccurate, incomplete or biased. Take the time to ensure your data is accurate, complete and objective. But data skepticism isn’t just a clerical task. Even dubious facts can prompt really valuable questions.

Prepare for data hoarders and resisters. Some employees see information as power, so they hoard it. They feel that sharing their information will reveal that their work isn’t that valuable. This view is backwards: sharing valuable information actually proves the value of your work. Managers should clap loudly for those who make sure their co-workers aren’t working in the data dark.

Sharing data and knowledge indicates an open and collaborative culture. Managers can set an example by being open-handed with information, including bad news. Few people have found that sharing summary financial information backfires. Instead, it lets people know what’s happening in their world, so they have the context for management decisions.

Building a system for collecting, cleaning and storing clear data can produce a steady stream of great decisions. It builds trust in the managers. It boosts confidence and that means people will be eager to try new things as a team.

Related posts

Next: “How to Lie with Charts.” Really, how to create the smallest deck of reports, tables and charts that will help people make good routine and non-routine decisions.