The Importance of Information Increases Directly with Distance and Cost

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?