August 2009 Deep Insights

These four statements represent four conditions of strategy.

Knowing what you know
Know that you don’t know
Not to know that you know
Not to know that you don’t know

Each has its opportunities and dangers in the universe of strategy. In the current market, where speed of innovations and global transformations are swifter than ever, they take on a whole new meaning.

Knowing what you know. In past times knowing what you knew was enough to market intelligently; to keep pace with customers desires and develop products to satisfy them, because speed was not an important factor for success. The challenge was more in line with product improvements and serving the customer a product that did the same work more efficiently. Today the challenge is “Does anyone really know, that what they know, will provide a competitive advantage?”
Know that you don’t know. It once was the work of management to seek out new innovations for more market share and improve ROI. The danger was less of going out of business and more of becoming cash poor for a temporary period of time. The challenge was to seek out new markets for a current product or to seek out an acquisition to provide new products to your current customers. Today’s landscape is a much rougher terrain. The challenge is to admit there is more that is unknown than known. Urgency to act and learn is the operational mode that is now required.
Not to know that you know. Organizations could say ‘I knew that,” ramp up resources, produce the product for sale and maintain a strong position with good margins. Today warp speed is required to stay alive in markets. Late entries or “me too” products seldom penetrate the market. Margins are low and the product is dropped. If you have a gut reaction you must quickly seek out the opinions of others to determine if in fact the idea is worthy of action. A passive reaction to gut feelings will only put your company in a vulnerable situation. By the time you hear rumors or see print describing the idea, you and your company will have lost the edge needed for profitable margin. A company must challenge itself daily to identify what they know and how that knowledge will lead to profit and cash flow.
Not to know that you don’t know. Arrogance, ego, and pride were good virtues in past decades. Companies could create such a culture because the biggest competition came from within. They were able to motivate personnel to sustain their current level of performance, increase it, or to attain market share. Today HUMILITY is the strongest of virtues. There is no one who knows all and to think you do is a pact with the devil. Innovative ideas cross all existing boundaries, valueless ideas in one industry, country, or geographical area become the catalyst for innovation in another person’s world. Therefore a pact needs to be made with all personnel in a company to search out ideas from anywhere, be opened minded, and analyze these ideas: how would they fit together in your world, or in a new market outside your world, how could an alliance be structured to benefit all the stakeholders in the idea.

The transformation has begun. Organizations in the future will be driven by intellectual knowledge gathered from hidden sources with a common goal to produce a superior ROI for shareholders, life styles for employees, and a customer experience beyond expectations.