Is the big picture always the reason for a good strategy?

World Map. Credit: Wikimedia Commons
World Map. Credit: Wikimedia Commons

Strategy is a matter of forecasting. We establish a set of actions in order to anticipate those ones from the competence or the environment. Forecasting requires to recover information and to analyze it.

Modern technologies let to recover and process a huge amount of information; however, we usually forget that the amount of information is related to the result of the forecast. With a certain amount of information we select a certain action, with more information we can decide a completely different one. In Spain, people from the countryside have a proverb: “Choose the big donkey, either if it walks or even it does not walk”. This can be seen as the actual trend of information analysis too. Managers are very worried about the big picture, and they are usually interested in making decisions from the big picture, either if the final decisions are good or if they are not.

As information can be considered as power (in fact, energy is the capability to make a certain work), this can be the proper option. However, we must understand that in every natural activity not all the energy can provide work. Every system has a certain amount of energy that does not provide work. This energy is what physicists name entropy. Entropy is a concept used both in thermodynamics and information theory. The reason can be that in fact that information can be seen as a kind of energy (the capability to provide a work) truly.

The big picture is more useful to make decisions than a nearby one when we are in a very complex environment, however, we must find a way to get a good quality big picture instead of a myopic and fuzzy one.

In a complex environment, collected information can have a lot of entropy. This entropic information will do not provide any value for the decision maker. It will do not provide useful work for the organization although a lot of money and resources must be spent to get it. Although a big picture is better than a little one, a big picture obtained with a lot of uncertainty can be worse than a little one obtained nearby with certainty in order to make a better decision.

In nature all beings only have the capability to get data from very little nearby environment although humans have the capability to store that information in their brain in order to be used in the future. However, as times goes by, the probability that information can be outdated increases. Things can change and the uncertainty about the stored information is higher.

Today, in management, due to the new information systems we have the capability to recover information from a vast environment instantly. We can receive information from many far sources in order to build a big picture without temporal uncertainty. However, we must cope with the spatial uncertainty, for instance. In general, the farther the source of the information, the lower the certainty about that information. And it is even more important that we cannot trust equally in every information source. Information sources have different quality, and different level of trust, in the same way as we can have different perception of a distance from a single eye or from a stereoscopic vision with two eyes although the distance is the same.

A large multinational corporation can work much more effectively than a human in order to build a bigger picture, because, it reduces the distance to the information sources, however, here is where a new concept arises: complexity. Large multinational corporations are complex, and this means that they have internal uncertainty. The process of building the big picture can be under the influence of the internal uncertainty of the organization. The information can be degraded as the number of managing levels increases, because every manager processes and filters the information. This filtering process can contribute to improve the quality of the information but in a complex organization it can introduce more noise instead of reducing it. For instance, can the opinion of a neighboring undergraduate be better than the work of a highly expert engineer? Is it better the opinion of twenty colleagues at a company in competition for a promotion than a personal meeting?

Although a big picture can be a great advantage for the strategist, we cannot forget that a decision maker must consider both information and its quality in order to provide a good response. A manager should not choose a big donkey either if it moves or not. Many companies are searching for information at the wrong sources. The important characteristic of a big picture is its utility instead of the size of the data. Governments traditionally spied external menaces instead of their own people, and managers always have repeated and used the thoughts and works of their better analysts. The good practices to create a big picture can be preserved even with the capability to know and store a lot of things about all from a lot of untrusted sources due to IT technologies.

Fortunately, the quality of the big picture can be evaluated measuring its complexity, as complexity is related to forecasting. When complexity is high the scenario is strongly unpredictable.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s