I heard this quote from an executive at a recent conference I attended: “If data were dirt and information were water, we would be buried alive and dying of thirst.” Unfortunately, I think many of us can relate. We always hear about the need to make decisions based on data. Nothing could be farther from the truth. We do not need more data, but we definitely need more information.
Sometimes, it doesn't feel like we've made it past this point when it comes to data (from extrabox via Flickr)
Tim Berry provides a simple, but profound, formula of value in his blog post from last Thursday. Professor Kreps was simply telling Tim that the value of information lies in how it will increase your company’s value. Professor Kreps used cash as a substitute for value, but the point remains valid. We all have incredible amounts of data at our fingertips. Google searches provide millions of results, spreadsheets can run hundreds of columns wide and thousands of rows long, but our quest for real information remains elusive. How do we move from data to information?
A good way to start your quest is to think of Professor Kreps’ formula in the form of a question. Does what you are seeing help you make a decision to increase the value of your company? If the answer is yes, then find out how much value that piece of information adds to your business.
We all need to move away from accumulating data. Too many of us have far too much data in hand, overwhelming our ability to make a decision. Too much data makes our brains look like some of the houses I saw on the NBC reality series “Losing It” this summer, where people hoarded everything. The key is to understand what is really information and how to obtain that information as quickly and efficiently as possible. Data is just clutter – information is what we really need to run our businesses.
