08 October, 2014

A lot of knowledge is a dangerous thing

“There are known knowns. There are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don’t know. But there are also unknown unknowns. There are things we do not know we don’t know.” - US Defence Secretary Donald Rumsfeld, 2002
Gobbledygook or profound insight? I’m inclined to the latter. Boards and managers tend to manage the risks they think they know, not the ones they don’t. The quality of your own business processes. The quality of input, processes, outputs, logistics, channels - upstream and downstream from your business. The degree to which your business and brand is isolated from other people’s actions.

Chances are, you try to manage those elements which have a known impact in your value process. You know a lot about them. But what about something completely beyond your knowledge and control? What about a key supplier or customer going bust as a consequence of someone else going bust? How about a subcontractor running hidden, unacceptable practices elsewhere in the world? Someone using your product in new unintended dangerous applications? Or a logistic provider’s people subverting your process to run a scam, smuggle drugs, launder money?

At least on this, Rumsfeld had it right; but there’s no easy answer. Just be wary of what you think you know and don’t know. Assumptions are very dangerous. What are the things you take for granted in your business? And, given that you don’t know what disasters may sideswipe your business, what’s your generic crisis management process? When the organic fertilizer is sucked into the air conditioning system, how will you cope?

First posted  26 August 2009

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