Companies that read more perform better, researchers say

According to an Austrian study, the larger a company is, the greater the volume of information it consumes. Image: Shutterstock

The adage “tell me what you read, and I'll tell you who you are” applies not only to individuals, but also to companies. A study published in the Royal Society Open Science journal argues that a company's success is associated with the amount of information its employees read on a daily basis.

A research team from Vienna's Complexity Science Hub came to this surprising conclusion after analyzing the online reading habits of employees at millions of companies worldwide over a two-week period. These workers were accustomed to reading business dailies such as the Wall Street Journal, Bloomberg and Forbes, as well as more specialized media outlets such as Station ITCentral and Questex. "By getting a closer look on how firms consume information, we discovered new and previously unseen patterns of the knowledge economy," explains study coauthor, Eddie Lee, in a news release.

It appears that the larger the company, the greater the volume of information it consumes. Large groups seem to benefit from an economy of scale in the way they stay informed: they manage to read as much, or even more, than smaller structures, while mobilizing relatively fewer resources. But this phenomenon is not without its drawbacks. "Beyond a certain threshold, large companies read a greater number of unique pieces of news, which leads to a greater amount of redundancy," says Eddie Lee. In other words, the same information can be read by several employees, which can slow down the decision-making process. 

The study also reports that large companies tend to diversify their news interests, rather than limiting themselves to those that concern their business sector. This diversity works to their advantage. Indeed, Eddie Lee and colleagues claim that a company's media consumption habits could be a predictor of its innovation potential. The more information a company consumes, the more likely it is to explore new business horizons.

This can even have an impact on its financial performance. "Firms that consume more information than typical for their size tend to perform better financially," says Eddie Lee. As such, it seems that reading can be beneficial for work while also being an enjoyable pastime.