The Small Worlds data measure applied to business innovation

In my book, Information-Driven Business, I introduce the concept of the “Small Worlds” test on information.  In summary, this measure determines the relationship between complexity and separation in any data.  One of the best ways to apply this test is to use it to determine how innovative a new product or business idea actually is.

There are two things we can learn from the past two decades.  The first is that new and truly disruptive businesses almost always use information in a new way (examples include the way new credit card issuers use loyalty schemes and Amazon’s ability to recommend purchases).  The second is that the information associated with truly disruptive businesses more closely adheres to the Small Worlds principle that separation and complexity have a logarithmic relationship.  That is, adding more complexity in the information only results in users having to navigate a small number of extra steps.

For instance, the telephone network of the early twentieth century was requiring a linear growth in telephone operators to keep growing, but by the second half of the twentieth century it had innovated to ensure that moving from the simplest transaction (calling next door) and the most complex (calling the other side of the world) only added a small number of exchanges.  Similarly, iTunes doesn’t just allow you buy music online, rather it innovates by reducing the number of steps required to relate information on your iPod to the artist and album that you are interested in.

You can preview through Google Books the chapter of Information-Driven Business defining the “Small Worlds” measure.

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About infodrivenbusiness

Robert Hillard is the author of Information-Driven Business, available through John Wiley & Sons. Find out more at www.infodrivenbusiness.com. Robert was an original founder of MIKE2.0 which provides a standard approach for Information and Data Management projects. He has held international consulting leadership roles and provided advice to government and private sector clients around the world. He is a Partner with Deloitte with more than twenty years experience in the discipline, focusing on standardised approaches to Information Management including being one of the first to use XBRL in government regulation and the promotion of information as a business asset rather than a technology problem. Find out more at www.infodrivenbusiness.com. The opinions expressed in this blog are entirely his own.
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One Response to The Small Worlds data measure applied to business innovation

  1. Pingback: Information overload and innovation | Information-Driven Business

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