Information vs. Meaning

We must find 'meaning' to succeed in business.

In our quest to deliver outperformance (and in our musings here) there are a few words that we frequently use:

The Good

Some of the 'good' words are "strategy", "innovation", "change", "information", "science", "art", "milieu", "iterative", "bottom-up", "pivoting", "leadership" and "scenius".

A correct understanding and a correct implementation of each of these words are necessary to ensure business success.

The Bad

Some of the 'bad' words (and phrases) are "cargo-cult", "mediocrity", "mythical man month", "dictates", "rent-seeking", "bureaucracy" and "we are not a start-up anymore" [ed - this is one of our personal favourites. An ex-client of ours almost fired us on the spot when we dared to label their two store operation a start-up. Hilarious]

The bad words are succinctly described in this short quote from Machiavelli’s “The Prince” (written around 500 years ago, already):

“It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them.”

The Ugly

Nope, no 'ugly' here today.

Information

Today we will briefly focus on just one of these 'good' words - a word that we use often: "information".

Most of us have probably seen an incarnation of the DIKW pyramid (Data - Information - Knowledge - Wisdom) where each subsequent step 'up' the pyramid adds more value to the data. This is one way to position 'information'.

In his book "Why Information Grows", Cesar Hildago has a more fundamental view. The Prologue to his book starts with the words;

"The universe is made of energy, matter and information, but information is what makes the universe interesting. Without information, the universe would be an amorphous soup ... Yet information is rare. It hides in pockets as it battles the universe's perennial march to disorder: the growth of entropy".

Despite the science-based extract above (and rest of Hidalgo's book is underpinned by science too), this is actually a book about Economics. I.e., the book is about the production, distribution, and consumption of goods and services (money, business, human behaviour, etc.).

The following is from the amazon.com description of the book:

"What is economic growth? And why, historically, has it occurred in only a few places? Previous efforts to answer these questions have focused on institutions, geography, finances, and psychology. But according to MIT's antidisciplinarian César Hidalgo, understanding the nature of economic growth demands transcending the social sciences and including the natural sciences of information, networks, and complexity."

Meaning

Hidago references the (1949) work of Claude Shannon and Warren Weaver. Their work underpins some parts of what we today call IT (Information Technology), namely Information Theory. He quotes Weaver's words: "information must not be confused with meaning" and states "meaning is the interpretation that a knowledge agent, such as a human, gives to a message."

The "meaning" referred to here is not just "meaning" in the philosophical (ontological) sense of the word (as in questions such as the Meaning of Life). It is the more prosaic "what does this actually mean?"

Conclusion

What can we conclude from this all-too-brief discussion?

Well, it should be clear that (1) if you don't have a way to get the required information, or if you (2) then just leave it there - "I now have the information" - but you don't do the work to find a meaning, then the "economic growth", that Amazon refers to, will not be yours. Your competitors (even those that you don't yet know about) might not be so silly.

Information must lead to meaning.
Meaning must lead to opportunity.
Opportunity must lead to an approach.
The approach that we propose will lead to outperformance.