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INFORMATION THAT MANAGERS NEED FOR THEIR WORK Information for managersincluding all knowledge workersfor their own work may be a great deal more important than information for the enterprise. Information increasingly creates the link to their fellow workers and to the organization, and their network. It is information, in other words, that enables knowledge workers to do their jobs. By now it is clear that no one can provide the information that knowledge workers need, except knowledge workers themselves. But few managers so far have made much of an effort to decide what they need, and even less, how to organize it. They have tended to rely on the producers of dataIT people and accountantsto provide this information for them. But the producers of data cannot possibly know what data the users need so that such data can become information. Only individual knowledge workers can convert data into information. And only individual knowledge workers can decide how to organize their information so that it becomes their key to effective action. To produce the information managers need for their work, they have to begin with two questions: What information do I owe to the people with whom I work and on whom I depend? And in what form? And in what time frame? What information do I need myself? And from whom? And in what form? And in what time frame? These two questions are closely connected. But they are different. What I owe comes first because it establishes communications. And unless that has been established, there will be no information flow back to the manager. We have known this since Chester I. Barnard (18861961) published his pioneering book The Functions of the Executive, in 1938, seventy years ago. Yet, while Barnards book is universally praised, it has had little practical impact. Communication for Barnard was vague and general. It was human relationships, and personal. However, what makes communications effective at the workplace is that they are focused on something outside the person. They have to be focused on a common task and on a common challenge. They have to be focused on the work. And by asking, To whom do I owe information, so that they can do their work? communications are being focused on the common task and the common work. They become effective. The first question (as in any effective relationship), therefore, is not, What do I want and need? It is, What do other people need from me? and Who are these other people? Only then can the question be 350 MANAGERIAL SKILLS asked, What information do I need? From whom? In what form? In what time frame? Managers who ask these questions will soon find that little of the information they need comes out of their own companys information system. Some comes out of accountingthough in many cases the accounting data has to be rethought, reformulated, and rearranged to apply to the managers own work. But a good deal of the information managers need for their own work will come, as has been said already, from the outside and will have to be organized quite separately and distinctly from the inside information system. The only one who can answer the question, What do I owe by way of information? To whom? In what form? is the other person. The first step in obtaining the information that managers need for their own work is, therefore, to go to everyone with whom they work, everyone on whom they depend, everyone who needs to know what they themselves are doing, and ask them. But before one asks, one has to be prepared to answer. For the other person willand shouldcome back and ask, And what information do you need from me? Hence, managers need first to think through both questionsbut then they start out by going to the other people and asking them first to tell them, What do I owe you? Both questions, What do I owe? and What do I need? sound deceptively simple. But everyone who has asked them has soon found out that it takes a lot of thought, a lot of experimentation, and a lot of hard work to answer them. And the answers are not forever. In fact, these questions have to be asked again, every eighteen months or so. They also have to be asked every time there is a real change, for example, a change in the enterprises theory of the business, in the individuals own job and assignment, or in the jobs and assignments of the other people. But if individuals ask these questions seriously, they will soon come to understand both what they need and what they owe. And then they can set about organizing both. Organizing Information Unless organized, information is still data. To be meaningful it has to be organized. It is, however, not clear at all in what form certain kinds of information are meaningful, and especially in what form of organization they are meaningful for ones own job. And the same information may have to be organized in different ways for different purposes. Here is one example: After Jack Welch took over as CEO in 1981, the General Electric Company (GE) created more wealth than any other company in the world. One of the main factors in this success was that GE organized the same information about the performance of every one of its business units differently for different purposes. It kept traditional financial and marketing reporting, the way most Information Tools and Concepts 351 companies appraise their businesses every year or so. But the same data were also organized for long-range strategy, that is, to show unexpected successes and unexpected failures, but also to show where actual events differed substantially from what had been expected. A third way to organize the same data was to focus on the innovative performance of the businesswhich became a major factor in determining the compensation and bonuses of the general manager and of the senior management people of a business unit. Finally, the same data were organized to show how the business unit and its management treated and developed people which then became a key factor in deciding on the promotion of a manager, and especially of the general manager of a business unit. No two managers organize the same information the same way. And information has to be organized the way individual managers work. But there are some basic methodologies of organizing information. One is the key event. Which eventsfor it is usually more than oneare the hinges on which the rest of my performance primarily depends? The key event may be technologicalthe success of a research project. It may have to do with people and their development. It may have to do with establishing a new product or a new service with certain key customers. It may be obtaining new customers. What is a key event is very much the managers individual decision. It is, however, a decision that needs to be discussed with the people on whom the manager depends. It is perhaps the most important thing anyone in an organization has to get across to the people with whom one works, and especially to ones own superior. Another key methodological concept comes out of modern probability theoryit is the concept on which, for instance, total quality management is based. It is the difference between normal fluctuations within the range of normal probability distribution and the exceptional event. As long as fluctuations stay within the normal distribution of probability for a given type of event (e.g., for quality in a manufacturing process), no action is taken. Such fluctuations are data and not information. But the exception, which falls outside the accepted probability distribution, is information. It calls for action. Another basic methodology for organizing information comes out of the theory of the threshold phenomenonthe theory that underlies perception psychology. It was a German physicist, Gustav Fechner (18011887), who first realized that we do not feel a sensationfor example, a pinprickuntil it reaches a certain intensity, that is, until it passes a perception threshold. A great many phenomena follow the same law. They are not actually phenomena. They are data until they reach a certain intensity, and pass the perception threshold. For many events, both in ones work and in ones personal life, this theory applies and enables one to organize data into information. When we speak of a recession in the economy, we speak of a threshold phenomenona downturn in sales and profits is a recession when it passes a certain threshold, for example, when it continues beyond a certain length of time. Similarly, a disease becomes an epidemic when, in a certain population, its prevalence passes and exceeds a certain threshold. This concept is particularly useful in organizing information about personnel events. Such events as accidents, turnover, grievances, and so on become significant when they pass a certain threshold. But the same is true of innovative performance in a companyexcept that there the perception threshold is the point below which a drop in innovative performance becomes relevant and calls for action. The threshold concept is altogether one of the most useful concepts to determine when a sequence of events becomes a trend, and requires attention and probably action, and when events, even though they may look spectacular, are by themselves not particularly meaningful. Finally, a good many managers have found that the one way of organizing information effectively is simply to organize ones being informed about the unusual. One example is the managers letter. The people who work with a manager write a monthly letter to him or her, reporting on anything unusual and unexpected within their own sphere of work and action. Most of these unusual things can safely be disregarded. But again, and again, there is an exceptional event, one that is outside the normal range of probability distribution. Again and again, there is a concatenation of eventsinsignificant in each reporters area, but significant if added together. Again and again, the management letters bring out a pattern to which to pay attention. Again and again, they convey information.

NO SURPRISES No system designed by knowledge workers to give them the information they need for their work will ever be perfect. But, over the years, systems steadily improve. And the ultimate test of an information system is that there are no surprises. Before events become significant, managers have already adjusted to them, analyzed them, understood them and taken appropriate action. One example is the three or fourvery few indeedAmerican financial institutions that, in the late 1990s, were not surprised by the economic collapse of mainland Asia. They had thought through what information means with respect to Asian economies and Asian currencies. They had gradually eliminated all the information they got from within their own subsidiaries and affiliates in these countriesit, they had begun to realize, was just data. Instead, they had begun early in the 1990s to organize their own financial information about all emerging markets into country risk ratios, going from micro to macro financial and eco- Information Tools and Concepts 353 nomic information such as foreign debt-to-GDP ratios and debt-service ratios. For example, the ING bank had a very sophisticated risk analysis system for emerging markets, which was made available to client companies of the bank. In addition, in September 1996, the International Monetary Fund issued a report warning about potential problems in financial markets in Southeast Asia. Long before these economic ratios turned so unfavorable as to make a panic in mainland Asia inevitable, these managers had realized that it was coming. They realized that they had to decide whether to pull out of these countries for short-term growth or to stay for very long-term and very risky strategies. In other words, they had realized what economic data is meaningful with respect to emerging countries, had organized it, had analyzed it, and had interpreted it. They had turned the data into informationand had decided what action to take long before that action became necessary. By contrast, the overwhelming majority of American, European, and Asian companies doing business on mainland Asia and/or investing in it had relied on what their own people in these countries reported to them. This turned out not to be information at allin fact, it turned out to be misinformation. But only those managers who had spent several years asking the question, What information is meaningful with respect to our doing business in Thailand or Indonesia? were prepared. Managers have to learn two things: eliminate data that does not pertain to the information they need and organize the data to analyze and interpret it. Then managers must focus on the resulting information and take action. For the purpose of information is not knowledge. It is being able to take the right action.

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