Information is the Good, the Currency, and the Era

I’m reading “Business @ the Speed of Thought,” by Bill Gates.  (Chapters-Indigo Link Here)  He wrote it ten years ago, which allows me the critical distance I prefer when reading a book that prognosticates.

Say what you will about MS Windows, Mr. Gates knows business.  So I figured his views on business in the post-industrial age would be at least interesting if not wholly prescient or doctrinal.

Actually, I would suggest that we are now post-post-industrial.  I’m going to digress for a bit.  I’m not sure I will come back.  You’re probably not all that surprised.  During the industrial age, money was used to trade industrial output.  For a brief period, beginning with the expansion and deregulation of derivative markets and ending with the financial swan-dive-with-a-jet-pack-and-a-small-nuclear-device this past autumn, money was used to trade mathematical shadows of money.  Money became more than an instrument of trade, but the seed of massive abstracts that themselves became a primary good of the world economy.  What is interesting about that short era is that during the industrial age, as currency was used to evaluate and trade industrial output, it was still indexed to gold as that currency; during the money economy, the gold standard was removed.  During the industrial age, money was seen as abstract, and thus it required a tie to tangible gold.  Once money was no longer seen as an abstraction, the ties to gold seemed superfluous dead weight being dragged behind an explosive global economy.  With the ties severed, we had two forms of money defining the economy: currency and its derivatives.  Which of them was the post-industrial good and which was the post-gold standard?  Derivatives are not money; they are data and theories and probabilities about money.  But they were being bought and sold.  It would seem they were the good.  The deregulation of derivative markets, however, allowed them to be used as the currency for those trades.  It would seem that they were currency then, which as we’ve seen is an abstraction of a standard, which would in turn indicate that the standard was money itself, which is not a standard, but a metric indicating value.  Both derivatives and money are, themselves, information.  The markets have deflated, swallowing (by some measures) decades of economic growth.  But the existence of those derivative markets was symptomatic of the development of a new economic era wherein information underpins the economy.

The information survives, and has become an industrial good in and of itself.  In fact, one could see the currency and security derivative economy as one aneurismal manifestation of information economics – one that didn’t work due to its Ponzi-like tautological instability.  Nonetheless, information is what was pursued then, what is pursued now, can be traded for other information, can be an abstraction of other information, and though intangible, is not as fragile as money when unconnected to a standard or when dealt with in abstraction.

Perhaps being unconnected to a standard is not entirely true.  Information does have a standard to which it is tied, an absolute that gives it value regardless of its market status:  Language.  If information is not only the good but the currency, it has the innate stability and entropic tendency toward growth imbued by its indelible ties to language and human socialization.

The information age that dawns, an era in its own right, should not carry the same novelty-fright as the technology of its manipulation and trade.  Information as a good of appreciable value traces its roots at least as far back as Pheidippides’ legendary run across Greece with news of the invasion at Marathon.  Samuel Morse not only made information transient and ephemeral – qualities it had had for a long time already as smoke signals used by the indigenous peoples of the Americas – but also machine-transmittable, paving the way for the total removal of geographic barriers to information mobility.  Our age required one more element: machine-malleability.  The “in” and “out” parts of the telegraph were separated, and in between – in place of the transmission machine that would return in other information technology – sprouted the ENIAC.  Instead of simple translation and transmission, the machine now processed and rendered.  What went in was different when it came out; it was transformed and had acquired new meaning.

The point of Gates’ book is that the importance of information fluency and fluidity in an organization cannot be overstated.  All other things being equal, the way in which a company handles its information will dictate success of failure in the marketplace.  That is not to say that information is the last resort and otherwise insignificant tie-breaker.  Rather, Gates is assuming that you have a marketable product and a competent staff – the basics that make a business possible.  The most muscular body, if its blood is toxic or its vessels constricted, will always be outrun by someone of average or even minimal build if his blood is oxygenated and his arteries open.  The body is the company, the product, and the staff.  The blood is information.  It nourishes, heals, energizes, and grows the body; and it even allows body parts to communicate.  (Don’t underestimate the metaphor – body parts do communicate independently of the nervous system, for example with hormones.)

Gates however prefers the metaphor of the nervous system.  I’ll allow it, seeing as he wrote it a decade ago, but I’ll add this:  the way he extends the metaphor reveals a fundamental flaw in statistics-based business intelligence.  This flaw becomes a cancer in businesses that rely too heavily on it.  Not only does the flaw stunt growth, it eventually infects the entire corporation, destroying it cell by cell and bringing it down.

This flaw is the reliance on machine-based analysis and intelligence as an alpha-and-omega set instead of as one tool in a set of many.  The expeditious facility of numbers-based-data for numbers-friendly systems, like sales volumes for example, is wonderful and Bill Gates traces that application back to Alfred P. Sloan, Jr. and General Motors in the 1930s.

The expeditious facility of numbers-based-data for non-numbers systems, such as client feedback or human behaviour trends, tempts a company into an embittering journey through corrosion of goodwill, inter-departmental blame-gaming, souring of employee morale, and eventual corporate collapse.

Gates gets this too.  Despite some flaws in his description of a digital corporate nervous system, which I’ll try to elaborate on in a later post (I have some notes written…), he understands the value of human intelligence.  On page 12 he writes, “It’s brains that gives one or the other bank the edge.  I don’t mean just the individual abilities of bank employees.  I mean the overall ability of the bank to capitalize on the best thinking of all its employees.”

I talked about this in my last post.  The warehouse where I spent a couple of summers showed some ability to “capitalize on the best thinking of all its employees.”  I most recently worked for a global company specializing in online research products.  The products with which I worked were of course for the legal industry.  I was a trainer, showing our clients (judges, lawyers, etc.) how to make the most of these tools.  (A mixed background in adult education, IT, and law didn’t hurt.)  Anyway, the ability of the company to exploit its employees’ intellectual creativity was limited.  There were moments, and there was certainly lip-service paid to innovation.  They even threw a bit of cash at innovative projects though none of the cash was returned as incentive money to the employees who thought up or developed the projects.  But officialdom, deaf ears, rank, and almost fetishistic reliance on numbers-based-data for every movement and response of the company drowned any evolving new ideas.

I’m done for now.  More soon.