Data vs Information

May 17, 2024

Every executive needs to get relevant information to be able to manage their company well. Many get data, not information. Information is data organized for decision-making. The accounting system, the way the bookkeeping method works, it appears to me,  provides data not information. It gives us data on how much money was spent. For example, 1000 on transportation, 2000 on office expenses, and 5000 on labor.

But why we spent that money and who spent it, who is accountable for justifying the expenditure, is not provided. If you had to put a name next to the numbers on the consolidated report, revenues, and expenses as to who is responsible for every income and expense, you will get the name of the CEO. If you ask the CEO, what to do if the profits are too low, the usual decision might be to cut across the board a certain percentage of the expense.

Why across the board?

Because the CEO has no knowledge and thus control over what happens several levels below in the organizational structure. That is why the organization is called the back box. You know what resources are being put in. You know what is the output, but what happened inside the box is hidden to the eye. Thus, it is all data. not information.

The Adizes  Executive Dashboard App spells out why we spent how much, and who is accountable for every single dollar spent. The black box becomes transparent and if expenses need to be cut, one can drill down the organization chart and analyze the financials of every unit and cut expenses one item at a time and not across the board.

Here is the video on Adizes  Executive Dashboard:

Written by
Dr. Ichak Adizes