Does your company have current knowledge and facts?

 What is the purpose of this article?

• This article enables a discussion about the value and creation of knowledge, facts, and data.
• The audience for this article includes: investors, board oof directors, and C-Suite
• This article applies to all companies, ranging from pre-revenue through to long established global companies.
• This article does not provide tax, legal or financial advice.
• You must do your own research and fact-based analysis using current and relevant information.
• AI did not write this article. 100% human written.

You can download a PDF of this article from:Does you company have current knowledge and facts

How is this article structured?

• Decisions and actions are based on knowledge. Knowledge is derived from facts. Facts are derived from data.

What are the critical learnings in this article?

• Your company’s survival and success depends on having better knowledge than your competitors and better ability to learn.
• Knowledge explains why things happened. Your decisions and actions are based on knowledge.
• Facts describe behaviour at a point in time and are validated. Facts are what people believe to be the truth.
• In today’s turbulent, fast changing, and unpredictable world knowledge, facts and data often become obsolete quickly.

What is knowledge?

Knowledge explains why things happened. Your decisions and actions are based on knowledge. For example:

• The facts could be that sales dropped last quarter. Knowledge is knowing why customers decided to buy from your competition rather than from your company.

What are the two types of knowledge?

• Explicit knowledge is what resides in documents and electronic files.
• Tacit knowledge is extremely difficult to document e.g. how to calm an angry customer, how to reorganize talent to cope with an unexpected crisis. Tacit knowledge resides in peoples’ brains.

 Why is current knowledge critical to your company’s survival and success?

Your company’s survival and success depend on having better and more current knowledge than your competitors in key areas.

• Some of the key areas include: Why customers make buying decisions. Why your solution more is more profitable than the competition. Why star employees decide to join your company or leave your company.
• You must have current knowledge. Why? For example, knowing how customers made buying decisions 10 years ago is not helpful in today’s world.
• Why customers make buying decisions may change within days. E.g. fashion
• The average half life of professional skills and technical knowledge is below 5 years.¹

What are facts?

Facts describe behaviour at a point in time and are validated. Facts are what people believe to be the truth.

• Facts are truthful at a specific point in time in a specific situation.
• Facts describe behaviour at a point in time e.g. 80% of revenue comes from 20% of customers.
• Facts by themselves are not the rationale for making decisions about actions to take.

Everyone needs to have a common understanding and agreement on what the facts are.

 How does your company create knowledge from facts?

• Analytical techniques and software, including AI, help identify potential knowledge from facts.
• The creation of knowledge in the brains of your board directors, C-Suite, and employees requires physical changes in their brains.

Do facts need to be validated?

Facts without validation are not facts. Assumptions, opinions, hopes, etc. are not facts. Some types of validation may include:

• Separating correlation from causation e.g. smoking and lung cancer are correlated. But it’s false to conclude that lung cancer causes smoking.
• Getting different data e.g. the statement that the new software is great success because there were 100,000 downloads in a month is not fact when the different data shows that 99% of people uninstalled after a week, and that after a month only 10 people were cash paying subscribers.

Facts need to be constantly validated in today fast changing, unpredictable world.

How does your company create facts from data?

• You must have a common definition of facts and data. Create a glossary for defining facts and data.
• Create data from variety of sources.
• Analytical techniques and software, including AI, help identify potential knowledge from facts.
• The final step is people in your company agreeing on what are the facts.

Why are current facts critical to your company’s success?

Facts are constantly changing in todays turbulent and unpredictable world.

• There is the risk that your company continues to believe out of date or unvalidated facts as the truth.
• Your decisions and actions are then based on out-of-date or unproven knowledge.

What is data?

• Data is a huge pool of unprocessed – unvalidated and without business meaning.
• Examples include: 1,000s of customer invoices and payments, sensor readings in a factory, raw survey responses, social media posts, logs of customer phone calls and emails, etc.

Why is current data critical to your company’s success?

New and changed data often appear in todays turbulent and unpredictable world.

• Current and relevant facts must be based on current and relevant data.
• Current relevant knowledge must be based on current and relevant facts.
• Your company decisions must be based on current and relevant knowledge.

What are the challenges in your people learning to create new knowledge?

It is mentally difficult and psychologically stressful to make the biological changes in your brain required for learning and creating new knowledge and new facts.

• You will very naturally, and often unknowingly, utilize a broad range of cognitive and psychological bias to resist unlearning, and to resist new knowledge which is different from the past.
• You will unconsciously favour decision making and planning processes from the past and which are no longer useful today.
• Your information technology systems continue to support the old way of doing thing.

What are your next steps?

• Define the words/concepts you are using, in a glossary. I have seen major confusion when the same words mean different things to different people.
• Identify the key areas where your company must have competitively differentiated knowledge.
• Identify the links between your company’s performance and your company’s knowledge.
• Assess your company’s knowledge and facts.
• Assess your company’s planning and decision-making links to knowledge.
• Identify your company’s process for creating fact from data.
• Assess your company’s leadership capabilities to quickly learn and unlearn. Start with the Board of Directors, CEO and C-Suite.

Footnotes:

¹ Boston Consulting Group “Reskilling for a rapidly changing world.https://www.bcg.com/publications/2023/reskilling-workforce-for-future

 

What further reading should you do?

• What is learning? Koor and Associates

https://koorandassociates.org/creating-business-value/why-have-your-minimized-your-talent/

• Are you solving the right problem? Koor and Associates

https://koorandassociates.org/avoiding-business-failure/are-you-solving-the-right-problem/

• Is you company planning to fail? Koor and Associates

https://koorandassociates.org/avoiding-business-failure/is-your-company-planning-to-fail/