Big Data, Little Wisdom
We can mine, massage and manipulate many more megabytes than ever before - but does it make sense..?
The righter you do the wrong things, the wronger you become - Dr Russell Ackoff (1919-2009)
Russ Ackoff was a pioneer of applying systems thinking to complex, systemic challenges in organisations and a former professor of management science at the Wharton School, University of Pennsylvania.
Throughout a career consulting to more than 400 organisations and 75 government agencies in 17 different countries, he concluded that:
A pound of data is worth an ounce of information
A pound of information is worth an ounce of knowledge
A pound of knowledge is worth an ounce of understanding
A pound of understanding is worth an ounce of wisdom
In other words, wisdom is worth 65,536 times its weight in data.1
With all the big talk about the promise of big data, that’s a ratio worth remembering.
Ackoff frequently referred to the hierarchy of the above five types of content of the human mind. At the most basic level, data consists of symbolic representations of properties of objects, events, and environments captured through observations.
He likened data to iron ore – not much use until it’s processed into a usable, relevant from - i.e. information.
Since most data gets processed into information by computers, it’s wise to bear in mind an old computing acronym: GIGO - Garbage In, Garbage Out.
In other words, if the data fails to adequately capture important aspects of what it’s supposed to represent, no amount of mining, manipulating, or massaging will magically morph it into valid, worthwhile, genuinely useful information.
The third type of mental content is knowledge.
When I was a digital systems engineer back in the 1980’s, there was a lot of interest in knowledge management (KM) systems.
Large organisations had lots of experienced people approaching retirement. The idea behind KM was: “How can we capture people’s institutional knowledge (store it in computer systems) before they retire, so it remains available for the organisation’s future use”?
IBM – then the world’s leading computer systems and software vendor – invested heavily in trying to find out.
But it became apparent that the practical knowhow required to do things that create value in the real world is not just contained in explicit knowledge.
Explicit knowledge is ‘head’ knowledge - the kind of thing that can be articulated, written down, codified, stored, and retrieved by computers.
But the practical knowhow that actually creates value in the real world always and inevitably involves a significant amount of tacit knowledge.
Tacit knowledge is ‘embodied’ knowledge, possessed by the knower in the form of skill, produced in action, and which the knower cannot articulate explicitly. 2
So, whereas explicit knowledge is readily acquired through study, tacit knowledge - skill - is only acquired through practice.
Common examples of tacit knowing are driving a car, riding a bicycle, playing a musical instrument, or even recognising someone we know.
We see a familiar face and immediately recognise who it is. But we cannot say what data we use to recognise them.
We know it’s them but we don’t know how we know it’s them.
It’s vitally important to recognise that this transition from information to knowledge is inherently, unavoidably human.
In other words, we can’t fully capture knowledge (useful knowhow that can be used to create value in the world) in a computerised form.
That’s why the KM revolution never happened but was replaced by a growing interest in organisational learning - an inherently human capacity that can be supported, but never fully replaced, by information technology. 3
The fourth type of mental content in Ackoff’s hierarchy - understanding - is based on knowledge, so it too is inherently human-centric. 4
One important conclusion we can draw from the above is that no matter how shiny the apps, systems, and digital dashboards various IT vendors keep dangling in front of us, metrics can never, on their own, provide adequate understanding for effective organisational sense making, decision making and action taking. 5
The fifth type of mental content, wisdom, is qualitatively different from the other four.
In explaining this, Ackoff cites his close friend and long-time associate Peter Drucker: “There’s a big difference between doing things right, and doing the right thing”.
In progressing from data, through information, via knowledge to understanding, we use intelligence to increase the efficiency of the means we use in pursuing our ends.
But without wisdom, the ends we pursue will be ineffective in creating genuine value in the world and will often create the opposite.
Many of the crises we face as a human race are ones we’ve created for ourselves by becoming much more efficient at doing unwise things.
As Ackoff said, in his inimitable style: “We are largely devoted to doing the wrong thing right. That’s very unfortunate because the righter you do the wrong things, the wronger you become.”
“By contrast, doing the right thing wrong allows you to error correct and improve”.
“The distinction is absolutely critical. And we as a society are simply drowning in the pursuit of efficiency concerned with the pursuit of the wrong ends.” 6
In the 1990’s, several of the main product lines of a global consumer goods company were under threat from Asian competitors. In response, they started a crash programme to develop a new, more competitive product line, and hired me to help them ensure they got to market faster.
One of the first people I met was Peter, the Product Development Manager, based at the company’s main product development centre in Western Europe (manufacturing and marketing were both in China).
Peter told me that their inability to reduce time to market was not down to his Product Development team but because manufacturing and marketing were in China which, he said, was “thirty years behind the West” (remember this was the 1990’s, before China became the global powerhouse it is today).
At one of our team meetings in China a few weeks later, Peter refused a request from the Chinese Production Manager - “JJ” - to air freight a component they needed.
JJ said this would eliminate a two week shipping delay from the programme but Peter refused as it would cost his department’s budget $10,000 in extra air freight charges.
I asked JJ how much revenue the organisation would lose due to this two week delay in production start.
Now this was way before we all had smartphones, and very few people in the West had even seen a handheld computer.
Silence fell as JJ pulled a handheld computer from his pocket and tapped a few figures into the business model he’d programmed.
Peter was gobsmacked when JJ - someone he regarded as “thirty years behind the West” - held out his pocket computer and showed Peter that his $10,000 ‘saving’ would cost the organisation more than three million dollars in lost production.
Wisdom most often emerges when you bring together the combined insights of multiple people with different perspectives in practical ways like this.
It’s how “none of us is as smart as all of us” shifts from idle rhetoric to lived reality. 7
You won’t get that by mining, massaging and manipulating more megabytes.
Only by doing less of the wrong things righter can you hope to see more clearly the right things to do - and how to do them.
In the US Customary System of Weights and Measures, one pound (1lb) = 16 ounces (16oz)
Michael Polanyi coined the term tacit knowledge in his 1958 book Personal Knowledge, pointing out that “We believe more than we can prove” and “We know more than we can tell”.
That’s why we still call it information technology and not knowledge technology.
To understand literally means to stand on, by, near, over, or amongst our knowledge. The theory of understanding - epistemology - derives from the Greek epistasthai - from epi "over, near" + histasthai "to stand”.
For more on this see Killing Performance Inadvertently and The Dark Side of Measurement.
See the first ten minutes of this Ackoff speech from the 1990’s
This 6 minute video describes how to unleash the combined insights of multiple people with different perspectives by unlocking innovative 2D3D mindsets.