Forget about “information overload.” Instead, reexamine your assumptions. The return on your time and attention investment will be worth it.

I recently read an interesting blog entry from Thomas Davenport, who co-authored Competing on Analytics (Harvard Business School Press, 2007) and works as a professor at Babson University.

In his blog, Davenport makes a compelling case for ignoring our universal “information overload” problem. He identifies some surprising benefits of information overload as well as one crippling obstacle: the fact that few, if any of us, are willing to regularly invest our time “to save our attention” (i.e., change our information consumption habits).

Instead, I believe that we can make greater process improvements in business, as well as in our lives, by focusing on the assumptions we make about all of the information we use. Far too often, our assumptions range from “outdated” to “dead wrong.”

In Competing on Analytics, Davenport wisely identifies assumptions as the linchpin to any sound analysis:

“Of course, any quantitative analysis relies upon a series of assumptions. When the conditions behind the assumptions no longer apply, the analyses should no longer be employed. For example, Capital One and other credit card companies make analytical predictions about customers’ willingness to repay their balances under conditions of general economic prosperity. If the economy took a sharp downturn, the predictions would no longer apply, and it would be dangerous to continue using them.”

Davenport and his co-author, Jeanne Harris, were certainly ““Future Ready” on that point, if I do say so myself. The economy took the sharpest downturn in 70 years shortly after their book appeared, and we all know how this has impacted Capital One and other financial services companies.

The financial pain and suffering stems not from information overload, but from the Assumption Fallacy: We fail to examine, and reexamine, our assumptions deeply and frequently enough.

And since our assumptions have their roots in the ever-changing conditions of our extremely volatile economic system, they’re likely to become outdated and inaccurate very quickly, which in turn requires us to frequently update our forecasts of the future.

Yet with the stark reality of 2008-2009 still fresh in our minds, I see many organizations blindly following outdated budgeting processes with laborious negotiation of assumptions. There is an old saying I often discussed with my brother Mike. He would warn, “It’s not what you don’t know that hurts you. It’s what you think you know that isn’t so that hurts you.”

Think about the most important assumptions that govern your business and your life, and then ask yourself if you may be succumbing to the Assumption Fallacy. ###