When does information actually become knowledge?
Few organisations lack data. Almost all of them lack a reading that says what to do next.
Organisations have never had so much information at their disposal. Dashboards, reports, performance indicators and management systems make it possible to follow almost every dimension of the business. Yet that abundance does not always translate into a greater capacity to understand what is happening, or to decide what to do next.
It is a situation we meet often: the information exists, but it is scattered across different systems, spreadsheets, reports and, frequently, the experience of a few individuals. The challenge is not necessarily to collect more data, but to relate it, interpret it and turn it into something genuinely useful to the organisation.
Having more information does not mean understanding better
When a company finds decisions hard to make, it is natural to look for new indicators, fuller reports or more sophisticated dashboards. But adding information does not always solve the problem. Sometimes it makes it more complex still.
An indicator can show that sales have fallen, that margin has deteriorated, or that a given process is taking longer than expected. But the number on its own does not necessarily explain what happened, why it happened, or what should be done.
That interpretation requires context. It takes understanding the activity, knowing the circumstances, and relating the information to what is happening elsewhere in the organisation. Otherwise we risk accumulating indicators without increasing our capacity to decide.
There is a further difficulty: the more information is available, the easier it can become to select only what confirms an interpretation already formed. The quality of an information system should therefore be judged not only by how much data it provides, but by how well it helps us question what we think we know.
From information to the capacity to act
We can think of this as a sequence of four moments: information, knowledge, decision and action.
Information lets us observe and compare. Once we add context to a number, we begin to see whether it represents a positive trend, a deviation, or a situation that deserves attention.
Knowledge appears when we can interpret that information and understand what it means in a particular reality. A fall in margin, for instance, can have very different causes depending on the client, the service, the team or the moment it occurs. Identifying those differences takes more than reading a report.
But understanding is not enough. That knowledge has to be turned into decisions, responsibilities have to be assigned, and the conditions created for those decisions to be carried out.
It is precisely at these transitions that many organisations run into trouble. They invest in producing and presenting the information, and give less attention to how it is interpreted, discussed and used.
A dashboard can be technically correct and still have little effect on management, if nobody knows which decisions it is meant to support or who is responsible for acting on them.
What are we actually measuring?
One of the questions I find most useful when looking at management information systems is a relatively simple one: which decisions are we trying to improve with the indicators we are tracking?
The answer is not always obvious.
Many reports continue to be produced because they were created to meet a need that existed in the past. Over time they become part of the organisation’s routine and stop being questioned. The information keeps circulating, even when nobody can clearly explain what it is for.
That does not mean every indicator has to produce an immediate decision. Some matter for following trends, spotting gradual shifts, meeting obligations or preserving historical information. But there should be an understandable reason to keep them.
It is worth asking who uses each piece of information, what for, and what would happen if it stopped being available. The exercise can reveal redundant reports, indicators of little relevance, or important information that exists but is not reaching the right people.
The aim should not simply be to produce less reporting. It should be to produce more useful information, and to free up time for what genuinely adds value: interpreting, discussing and deciding.
The knowledge that never appears in the reports
There is, however, a dimension that information systems cannot always represent.
In any organisation there are people who have developed an extraordinary ability to read situations, recognise patterns and anticipate problems. They do it from accumulated experience, knowledge of clients, an understanding of processes, and the relationships they have built over time.
A manager may spot signs of risk in a commercial relationship before anything has gone wrong. Someone in operations may anticipate a difficulty because they recognise circumstances similar to earlier ones. Many of these readings are undocumented, and not always easy to explain.
It is what we usually call tacit knowledge.
This knowledge has significant value, but it carries a fragility: it often depends on the person who holds it. When those people change roles or leave, part of the organisation’s ability to interpret and anticipate can go with them.
The answer is not necessarily to try to document everything they know. Some knowledge can hardly be translated into a procedure or a rule.
It may be more interesting to understand how those people think and decide. Which signals do they value? What questions do they ask? When do they distrust the indicators? What makes them recognise a problem before it becomes obvious?
Watching real decisions, discussing concrete situations and setting different readings against one another can help make some of those criteria visible.
And there is a particularly interesting opportunity when people’s experience and the available information point in different directions. Instead of assuming straight away that one of them is wrong, we can try to understand where the divergence comes from. Perhaps there is relevant information the systems do not capture. Or perhaps a conviction formed in the past no longer matches present reality.
Either way, the organisation has an opportunity to learn.
Turning information into organisational capability
The real challenge is not only to make information available, or to preserve what a few people know. It is for the organisation to build an ever greater capacity to understand what happens, learn from experience and improve its decisions.
That means looking at the information systems, but also at the processes, the responsibilities, the relationships, and the way knowledge moves between people.
Technology can help relate data, identify patterns and make certain readings more accessible. But its usefulness depends on the quality of the questions we ask, and on our capacity to understand the context in which the information was produced.
Perhaps, then, we should start less often by asking what new indicators we need to create, and more often by understanding which decisions we want to improve, what knowledge already exists in the organisation, and what is stopping us from using it.
It was also from this line of thought that one of the questions we explore in the Aetheris laboratory was born, through Arcane.Engine: how can we turn scattered knowledge, often dependent on individual experience, into a capability the organisation can develop, share and preserve?
It is a question we do not yet have all the answers to. But it strikes us as a particularly relevant place to start in thinking about the future of organisations.
