The more reporting, the less knowledge

NOTE! The views presented herein are those of the author only and do not necessarily represent my affiliations in any fashion whatsoever.

In the Garden of Eden, there was a tree of knowledge whose fruits were forbidden because they would learn the difference between good and evil. The serpent, however, lured Eve to take a fruit, and she gave it to Adam…

And the serpent said unto the woman, Ye shall not surely die: for God doth know that in the day ye eat thereof, then your eyes shall be opened, and ye shall be as God, knowing good and evil.

Unfortunately, knowing good and evil became a rather daunting task… and through centuries, if not millennia, we have killed each other in the name of right and wrong so clearly there has been significant disagreement over the matter. 

Apparently, corporations have in comparison a rather mundane task at hand – merely knowing itself. Yet, it turns out that knowing oneself is very difficult, or at least, more than difficult enough. As the ranks of corporations grow, the leader can no longer manage the corporation directly. It was said that Andrew Carnegie managed everything himself – indeed, he worked all the time and as such must have been one of the last managers of everything in a major corporation. Thus, the idea of reporting was born out of necessity in the late 1800s/early 1900s. One of the earliest annual reports was filed in 1903 by U.S. Steel whose financial accuracy was certified by Price, WaterHouse & Co. 

The purpose now, as then, is to create a tree of knowledge, so to speak, whose roots stretches inside and outside the corporation enlightening those enjoying the fruits of this tree. But like in the Garden of Eden, less is more. Despite this, many corporations are literally swamped in data and reports. 

This leads to two obvious questions. First, why is less more in reporting? Second, why do corporations ignore this?  ‘More is less’ is not just a catchy phrase, but it is crucial in reporting because human ability to absorb information and convert it to knowledge is limited. Indeed, Nobel laureate Herbert Simon said that

What information consumes is rather obvious. It consumes attention of its recipients. Hence, a wealth of information creates a poverty of attention.

Poverty of attention does not fly well with the mental efforts of converting information to knowledge because this must be done by the human being. No machine or system can create knowledge, it can create information and to some extent context but the job of getting to know, i.e. knowledge, is a human job. It is only in the Matrix trilogy and similar sci-fi movies that humans can upload knowledge and even skills. 

To overcome this problem, many corporations institute Key Performance Indicators, but there are many problems with that as discussed in an earlier post, and most corporations do not get it right, and they know. That is one of the reasons they ignore the less is more mantra believing that if they report enough they must surely have captured all that is essential. Another reason is that organizational complexity in multiple dimensions, even a few indicators in each dimension creates an overall overwhelming reporting. Organizational complexity will be expanded on more, but first we must look at another aspect. 

So far, the amount of reporting has been discussed, but equally important is the frequency of reporting. Some seems to think that the more frequent the better, but this is not the case. Psychological experiments have shown that during the descrambling of a picture, it was the group that did stepwise descrambling that did best – not the one with continuous descrambling. This is due to the fact that the brain seeks confirmation of preconceived notions, and a continuous flow of information makes the brain stick to these notions longer than the other group. Thus, it I what we think we see that prevents us from seeing. 

Furthermore, logically speaking, the reporting frequency should be adapted to the system reported. If the reporting frequency is shorter that the system response time of the phenomena, then the reporting is fundamentally misleading. If we act on these reports, we can actually make things worse… 

However, the most serious issue related to excessive reporting is that it creates fundamentally flawed organizations. One historian claimed that the principal reason the Roman empire lasted so long was that they did not have telephones. While this sounds comical, the truth is that by not having telephones the Emperor had to send governors and legions trusted to do the job. Remote reporting and intervention was not an option… We can argue about each and every instance the legions were employed, but the fact is that the Roman Empire has been the longest lasting in history of major size. 

The organizational flaws with excessive reporting is that not only do information fly up in the corporate stratosphere, where they lack the necessary context for interpretation, but it easily lends itself to meddling, interruptions and internal politics. The more complex the organizational structure, the worse the problems because the reporting will take place in many dimensions. 

Thus, not only do the knowledge levels sink with excessive reporting, but the corporate capabilities of dealing with it drops too. If this is not dealt with, corporate sclerosis can result where even the smallest project becomes an insurmountable task.  Again, with a complex structure this is amplified through well intended projects in all directions including project concerning handling failed projects and so it goes… Thus, excessive reporting fuels many negative byproducts and being caused by others.  

This is the closest you get to a corporate Gordian knot, but luckily – as in most cases – somebody has dealt with this before… Alexander the Great cut through the Gordian knot, and this is probably what must be done in severe cases. 

So, whenever we ask for a report we should think twice.  We hire people because they are capable – let them do their job.  This does not mean that reporting is out.  It means that reporting should take place only in two cases, in the right amount and relevant frequency.  First, if the reporting can help you do a better job by the superiors helping.  Second, if you can help your superiors do a better job.  All other reporting is waste.