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Noise! Noise! Noise! Noise! Noise!

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Is Twitter the New Quality Circle?

Like most Mondays, L. Gordon Crovitz has a column in today’s edition of The Wall Street Journal about information: Information Overload? Relax. We generally enjoy what he writes but don’t always agree with him.

Today, we have only a minor quibble with his column: what he refers to as “information” are, in fact, mere details, and as we like to point out in a variety of contexts, including when we discuss information system design and cost system design, Details Are Not Information. (See these search results for other internal links, too.)

Mr. Crovitz writes about the anxiety that many folks experience when they are “unplugged,” and don’t have access to e-mail or text-messaging or someone’s latest post or whatever. We attribute those feelings to their personal insecurity and their desire not to be “left-out” rather than any true and insatiable need for information. (We ask: what exactly will one do differently with the details.) Be honest, very few folks are making that many real-time, tactical decisions in which they need minute-to-minute updates about anything.

In our mind, the signal-to-noise ratios of such chaff are not much different than the ratios for most text messages sent by teenagers, i.e., close to zero.

Moreover, the higher a person rises within an organizational pyramid, the less critical–and less valuable–such tactical information should be. (If you are at a relatively high level within your organization, and you find such minutia crucial, then it it it highly likely that you are a busybody, and very likely that you are a nuisance to your subordinates and others. See Common Managerial Mistakes in Decentralized Organizations for a primer.)

Of course, senior managers are usually the first ones to get the new toys, but at a level of management where long-term strategy and careful thought and contemplation should be one’s preoccupation, insecure managers often fixate on reports of minor, if not completely trivial, details. Now, that’s one way to fill the long, corporate days and it may seem like proper work to some and it may give the appearance of work to others, but there’s little value that derives from such fixations and fascinations.

As a senior manager, your rightful–but possibly ignored–role is to determine the strategy and control mechanisms–like information systems and incentive schemes–needed to successfully implement that strategy and achieve the organization’s objective. Moreover, if your organization lacks those policies and systems and mechanisms, it’s not your subordinates’ fault. It is yours whether they’ll tell you or not; they probably won’t.

Likewise, the fixation on Twitter and such sites completely escapes us. Perhaps it’s our wordiness, but we can’t imagine saying much worth reading in the equivalent of a text message other than things like, “By the way, your hair is on fire.”

So, while such sites may provide entertainment for the easily amused, they’re not informative in any meaningful sense of the word. There is value in entertainment. If an otherwise nuisance is entertained electronically, he or she is less likely to annoy others and reduce the organization’s output. That’s why the reader is less likely to see chain e-mails from that friend that always sends them when that person is actually busy or on vacation. The truth be told, it is one of the reasons why we blog (and it’s why the Chairman permits us to do so). However, other than in those circumstances, consuming (free) entertainment rarely creates economic value or gross domestic product.

That’s why we don’t view Twitter and most of the social-networking infrastructure to be particularly valuable. Has someone benefited from one or more of them at some time by contacting someone they may not have otherwise known about? We’re sure the answer is yes. However, does that justify the cost and time commitment? We doubt it.

Another way to ask the question is: how much business is transacted that would not otherwise have been transacted without the presence of such sites? Our answers remains: we doubt that it is very much, particularly if the time wasted at those sites had been used constructively. (We’d argue that auction sites that bring together geographically-diverse buyers and sellers of small-volume products and services like computer programming are very different in nature and that such sites are valuable to both sides of those transactions.)

A third way to answer the question is to ask: is it economical? Do the benefits justify the costs? That’s something that will take a few years to determine, but the reader knows how we’d bet on the proposition.

Finally, as the post’s title alludes to, it’s quite possible that we are merely and crankily aging and turning into a slimmer, less green version of the Grinch who stole Christmas–prior to his epiphany and miraculous heart enlargement, that is. (As you may recall, it grew by three sizes that Christmas day while ours remains quite small and black.) Why we even have a dog that we dress like a reindeer in hope of profiting from all of the who’s in Whoville (and anywhere else for that matter).

So, while we may be missing out on extraordinary opportunities that being “networked” provides, we think most of these services will go the way of quality circles and total quality management and activity-based accounting and zer0-based budgeting and (the broad application) of just-in-time inventory and the misuse of overly-general performance measures and the securitizations and double-securitizations of things that no one quite understands and many of the must-have hedging activities that don’t quite immunize one from uncertain events and on and on. We imagine that in a few years, we’ll be able to update the post and include most things “green.”

So, perhaps it is just us, but we doubt it.

By the way, shortly we’ll publish a post on the similarities between teenage girls with low blood sugar and daily and intra-day changes in equity prices. It’s the exact same notion as we criticize above, i.e., the over-reaction to noise, rather than information.


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