One of the most frequent and frustrating occurrences I see among corporate managers is the failure to understand the cost-benefit ratio of information. This is the idea that it costs a certain amount to obtain each bit of information, and that cost rises as you approach 100% of the information you might need (or think you need) while the value of each bit of information falls. To relate it to the Pareto principle, in almost any situation you can get 80% of the information for 20% of the cost, but the other 20% of the information will cost you four times as much. This is perhaps a bit of an overstatement, but illustrates the concept. Read the rest of this entry »
Posted by timprosser 
