Knowledge mismanagement

The public sector’s obsession with capturing information and data creates an illusion of control and a naïve belief in predicting the unpredictable. We must stand firm against the tide of knowledge management

When I was younger I used to be a trainspotter. I am now an accountant, so it is a miracle I have ever seen a naked woman in the flesh let alone fathered five children.

Anyway for those of you who don’t how train spotting works, it is as follows; locomotives have numbers on the side that tell you their type and the number of each type. Somebody somewhere had the bright idea of bringing out a book of these numbers with pictures of the locomotives, and spotty youths like me spent their weekends collecting all the numbers. It’s a bit like bird spotting with trains, although twitchers tend to baulk at this comparison.

I was reminded of those heady days of standing at Clapham Junction in the rain when a well meaning chap in my office, Phillip, politely asked me to fill out a form. Now, my job is very simple; I find clients, I work for them, I send them a bill and most of them pay it. You would think at most, this gives rise to three or four bits of information ie how much do I bill, to whom and did they send a cheque? You would be wrong. Phillip’s carefully constructed spreadsheet asks for 15 separate pieces of information to be filled out for every client every month.

Throughout my career, I have been assailed by nice guys like Phillip asking me to fill out forms. In my twenties, I spent a brief period working at the Audit Commission for a team that devised a system for recording time spent by our staff on audits. Each client had a code. We then invented codes for activities, so we had a code for mundane things like resource planning meetings. We then spawned sub codes for ‘planning for the resource planning meeting’. We even had a code for time spent travelling and sub codes for modes of travel.

So although most of the major financial scandals in the public sector blithely passed us by, we did know how many auditors traveled by bus whilst thinking about resource planning.

I think this desire to capture and record mundane information is becoming more endemic in corporate life. We make a fetish of information with a whole host of accompanying words like ‘information system architecture’ and ‘knowledge management’. We spend millions on data capture and storage systems. My daughters are not taught about computers, they are taught Information Technology. Nobody can make any decision until they have crunched the numbers, reviewed the data, and monitored the performance indicators.

This is not confined to the private sector and probably is even more acute in the public sector. Central Government is characterised by a desire to get more and more information from the tiers it controls. The media regularly crucifies ministers for not knowing the minutiae of every activity in their department. Every scandal requires a sacrificial lamb for the heinous crime of not having information about an event before it happens.

‘How could you not know?’ is the stock question on Radio 4. ‘Because you couldn’t know!’ is my stock retort shouted through a mouthful of toast crumbs.

This obsessive recording of data is all, of course, an illusion of control, a chimera of predictably and certainty about a future world that is ultimately chaotic and unknowable. Leading up to the crash, the world’s financial sector had more information and more computing systems then anybody had ever had in the whole of human history but still only a handful of people at best predicted what would happen.

The rest of us, unbelievably with hindsight, believed Gordon Brown when he said that he had single handedly eliminated boom and bust. In the same vein of thought, nobody saw 9/11 coming despite the hundreds of millions spent on intelligence gathering by national governments.

In my experience, this obsession with trying to predict the future by gathering information about the past also seems to track the performance of the wider economy. When things were buoyant, we were outward looking, events driven, big picture stuff. We didn’t try to guess the future because we were pretty sure it was going to be really good. We had a cursory glance at few numbers every now and then but hey, that stuff was the domain of the back-office boys, the bean counters in head office. We were more focused on going out into the world and making things happen because this was more fun and made us money.

When things got unexpectedly tough, we retreated like salted snails turning in on ourselves and intently studying the data to try and work out when it will be safe to go out again. But the trouble is we only measure the things we have always measured so other new stuff never makes it onto the radar and we are tempted never to venture out again.

We waste a lot of time capturing data about current and historical events and more importantly the act of collecting information diminishes the value of first-hand experience, of going out into the world and actually engaging with people. My car has lots of instruments that tell me loads of information in real time. My bicycle does not have any data measuring instruments at all, but I learn a lot more about my neighbourhood when I ride my bike than when I drive the car.

I think the challenge for all organisations in both the public and privates spheres is to stand firm against the tide of ‘knowledge management’. Pick a number, say 20 and use this to limit how many pieces of information you will manage the organisation by. The number does not matter. It’s the act of limiting the information collecting that is catalytic.

Pick 20 things that really count and say this is all we are going to collect and monitor. Think of each bit of information like a unit of currency and your job is to stop people printing more and more of it hence devaluing what you have. Stop people staying in the office measuring things and push them out into the world to actually do stuff.

So, in conclusion, I have moved on from my adolescent self who thought that collecting arbitrary data about locomotives was important. In the 25 intervening years, I have realised that most information collected in organisations contributes to a dangerous inward-looking complacency.

Obsessively measuring the present imposes a charade of control and order on an unreliable future. Organisations know a lot about what they think is important and the investment in collecting and reporting this information acts as self fulfilling prophecy, enhancing its fictitious value. We think what we measure matters because we spend a lot of time and money measuring it.

As a trainspotter I knew a lot about class 33 diesels but nothing about girls. Phillip knows a lot about our existing clients but nothing about what our potential new clients will do in the next six months. Neither of us is going to find the answers by writing down strings of numbers on spreadsheets.

Michael Ware is corporate finance partner at BDO