What is High Value Information?

07/Oct/17 17:17
In the context of strategic risk management and governance, we've thought a lot over the years about how to distinguish truly valuable information in a world of data overload, fake news, etc., as well as increasingly scarce attention. In essence, decision makers have to simultaneously search through “sensemaking space” and “option space" — the former to reach a better understanding of the dynamics of the situation they confront, and the latter to determine how to most effectively and efficiently achieve their goals.

The first three type of valuable information pertain to the sensemaking challenge, which is our primary concern at Britten Coyne Partners:

  • New causal theories — that enable you to either better understand and explain the past or better forecast and anticipate the future. Causal theories that highlight positive feedback loops and critical thresholds that drive non-linearity are particularly valuable.

  • Indicators — high likelihood information (in the Bayesian sense) that enables you to better discriminate between different hypotheses — e.g., between multiple scenarios that could develop in the future. In Bayesian terms, information that reduces uncertainty and thus enables you to substantially adjust your prior probabilities across some range of hypotheses.

  • Surprises — information that triggers the feeling of surprise, usually because it is outside the range of outcomes your existing mental model would predict. Statistically, it tells you that the variance of possible outcomes is larger than you had thought. In Bayesian terms, may trigger expansion of the range of possible outcomes you had previously considered, as well as an adjustment in their probabilities. In Shannon terms, it is information with high entropy, because it increases your degree of uncertainty. 

The next three types of valuable information pertain to the search through option space and the selection of a course of action to pursue:

  • New Action Options — that enable you to achieve your goals with some combination of more effectiveness, more efficiency, or more flexibility (i.e., adaptability).

  • New Goals or Decision Criteria — that enable you to better evaluate and tradeoff the options you have.

  • New Time Updates — that tell you how much time is left before you must decide and act.
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