The Importance of Information Increases Directly with Distance and Cost

The Importance of Information Increases Directly with Distance and Cost

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This is a maxim that I’ve generally found to be true in my many years of consulting experience. Although I’ve seen it in the technology industry, I have no reason to believe that it’s any different in other specialties. As a matter of fact, if you’ve ever worked in or with a large organization, you’ve probably observed it yourself. It may even happen in your personal relationships!

Companies spend a lot of money to attract, screen, and hire top-notch employees. I think it’s safe to say that most organizations make an honest effort to hire the highest quality people they can find. So why is it that when a critical decision needs to be made about the business, the company values the input of an over-priced consultant half-way across the globe over the expert that they invested so much time in to attract, screen, hire, and employ?

I wonder if the mindset is something like: “Our employees can’t be that good, because if they were, they’d be working for <insert external firm here>.” Or possibly that by working side-by-side with the employees, we learn that they’re everyday people that make mistakes…just like us, whereas someone we don’t know must be more competent, simply because we’re unfamiliar with them. I think we can find a bit of evidence to support this second hypothesis by simply looking at the air of authority that celebrities bring to any topic they decide to discuss, even if they’re not an expert in that topic at all.

I think a corollary to this maxim might be the interest of organizations to mimic the practices of their competitors even when those same competitors are trying to mimic them! It seems to be a lack of self-confidence on the part of the organization, even if that organization currently dominates its industry.

I know that I’m not the only person to observe these behaviors. What have you seen in your experience?

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  • This is hilarious - but also true. I'm going through it right now. I was just hired on to a large organization (any reader would recognize the company) as the first in the IT staff with any .Net experience (primarily j2ee company). I've got the certifications to prove it, but still am sitting with little to do while our contractors and consultants gladly take care of any .Net needs. I'm beginning to think that, since I can do what the folks that work for <insert external firm here> can do, maybe I should be working for <insert external firm here>...
  • Mark 6:4 - Jesus said to them, "Only in his hometown, among his relatives and in his own house is a prophet without honor."

    There is something about working with a group of people day-in and day-out that sometimes causes them to look externally when problems of a certain magnitude or complexity occur. This is probably because they believe that if the problem could be resolved internally that it would already have happened. And/or they want someone to take the heat (and perhaps the blame) as things unfold. And the more they pay for the answers, the more likely they are to be correct.

    It could also be the phenomenon in the classic "Unskilled and Unaware of It: How Difficulties in Recognizing One's Own Incompetence Lead to Inflated Self-Assessments" article (http://www.apa.org/journals/psp/psp7761121.html) that basically says that people who are ignorant about a certain topic lack the skills even necessary to recognize their own incompetence and therefore could not see the right answer in front of them.

    So it is probably a combination of human nature, psychology and just plain ignorance. Consultants of the world rejoice :-) there will always be work for you in large organizations.
  • I would be very curious to know what spawned this post, Mike... considering that I am working in the same general vicinity as you. ???
  • Mark...I'm afraid there was nothing juicy that inspired this post. I maintain a list of topics that come up in conversation that I think would be interesting to blog about. The time had come for this one.

    And Bruce, I like your take on things. Perhaps the behavior can be partially explained by perspective and accountability.
  • I totaly agree with your post Michael,
    im Portuguese and we have a saying in Portugal, "The neigbours Chicken I allways fatter than ours" :)
  • When I taught at a college we were always fascinated (read irritated) with this phenomenon. In education to be an expert you needed to be at a rival college or from a larger institute. I was one of the first to use multimedia in the classroom in our area, but obviously not an expert. So of course for in-service we had to have someone from another university introduce us to multimedia. It worked out fine in this case, since I went to the other institute as an expert and presented <s>.
  • I've seen this from both sides of the fence (as a consultant and as a manager retaining consultants). I do agree that this maxim generally holds true. In my consulting days I was always amazed that my ideas somehow held more merit just because I was a consultant.

    That said, there are times when looking outside is appropriate. When do I look for outside help?

    1. When priorities merit my internal resources' time and development is more valuable than the task at hand. i.e. it ain't worth having my team do this work, let someone else handle it
    2. For Diversity of thought. Outside resources aren't bound by the same politics and culture as internal resources. I once worked with a client that had hired a great Oracle DBA. Problem was the DBA wanted to put all application logic in the database (everything was a stored proc, including code for presentation). I was not successful in convincing the client that a different architectural approach was more appropriate to the problem at hand. In the end the group sunk under its own maintenance nightmare.
    3. When external resources have been through the battles. Cutting your teeth is an expensive proposition. As smart as my team might be, I realize that there is always an expensive adoption curve in developing/deploying new technologies.

    One of my theories for American companies to be globally competitive is that those companies that figure out the right balance of internal and external resources to deliver product/services to the marketplace. Not just consulting, but identifying those external companies with the right competencies that compliment your company's competencies.

    Interesting note on a company's "self-confidence", Mike. I am amazed at the number of companies that do something just because a competitor does it. If an idea is worth doing, it's worth doing whether a competitor does it or not.
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