Are you suffocating your business with information?

Much is said about needing information – of both a financial and non-financial nature – to run your business. And the usual message is that businesses don’t have enough information.

But this week I was reminded about the other side of the coin, the businesses that are suffocated by information.

In preparation for a meeting I was attending this particular business had printed out a ton of reports. There was way too much for me to look at so I asked the team to direct me to the reports that they most often looked at. I was flabbergasted when they said they looked at all of them.

Not wishing to spend the best part of my life wading through the reports I tried a different tack and asked them which reports they found most useful. After the laughter died down (Reports? Useful?) they got serious, and stuck. They really couldn’t decide which information was useful and which wasn’t.

So I suggested that they look at the information and colour code it one of four ways depending on whether it they found it useful for:

1. planning the direction of the business. Such as budgets and forecasts.
2. getting a view on how the business was tracking right now (such as, in their case, a daily report on employee billable hours and daily cash).
3. indicating how the business would be tracking in the next few months (such as sales calls made, proposals sent out).
4. understanding how the business had actually performed (for example, actuals against budget).

At the end of this exercise there was left, on the table, a heap of reports that hadn’t been colour coded. The information didn’t seem to fit in any of the four criteria. At first the team were loathe to discard these reports “they must be useful for something”, but eventually, after trying a number of permutations, the team agreed that, in fact, the reports didn’t fit any useful purpose. The reports were binned. A great result!

Having too much information is as bad as having too little. It becomes impossible for your brain to extract, assimilate and respond to the important information when it is buried in, well, crap. Our brains are excellent at pattern recognition but we need to provide them with simple consistent information to enable them to do just that.

What information can you jettison today?

Julia Bickerstaff’s expertise is in helping businesses grow profitably. She runs two businesses:Butterfly Coaching, a small advisory firm with a unique approach to assisting SMEs with profitable growth; and The Business Bakery, which helps kitchen table tycoons build their best businesses. Julia is the author of “How to Bake a Business”  and was previously a partner at Deloitte. She is a chartered accountant and has a degree in economics from The London School of Economics (London University).