Each of these stories left many executives (industry insiders and outsiders alike) scratching their head and mouthing some equivalent of "Wha...?" as they tried to make sense of developments. Are Jetblue, Southwest and other cut-price airlines about to have their business model upended? Is the concept of broadcast TV--the nuclear family watching blockbuster shows together around the screen each evening--digging its own grave? Is the Kindle going to take news distribution to a new plane? Will fossil-fuel-powered cars be around for considerably longer than even their most ardent defenders ever imagined?
All big questions, all from left field, and all seemingly unanswerable. And yet, answering questions just like these--specifically, whichever similar imponderables will emerge, unforseen, in your industry--is at the heart of not just your business's continued growth, but in fact, its very survival.
If the circle represents everything you need to know to successfully grow your business, then the trick lies in knowing the importance and relevance of each of the three segments:
1. KK: What You Know You Know
Most of the time we live and work in KK-- what we know we know. If you're a business founder, the business is almost certainly predicated on your KK (yo-yo manufacturing, car detailing, whatever). If you're a business leader, your area of mastery (sales, accounting, inventory control--whatever your core skill is) is almost certainly your KK.
Working primarily in an area that isn't KK leads pretty quickly to tension and frustration, for everyone involved. But for most of us, for most of the time, KK is like water to a fish. It's what we spend most of our time in, and there are very few surprises while we're there.
2. KDK: What You Know You Don't Know
As a business leader you're pretty much constantly battling KDK, the things you don't know, but which you know you don't know (stick with me here).
As a sales person, for example, you might be aware that you don't know enough about accounting; a VP of R&D may find themselves wishing they understood more about sales; a business owner may spend a lot of time wondering if the competition will cut prices or if their commodity raw materials cost will rise dramatically in the next year--all examples of things we know we don't know.
With KDK, we don't know the answers (yet), but we can frame the questions. What we "know we don't know" loom ahead as obvious pitfalls on the road to achieving our strategic growth goals - and more fool us if we don't at least try to anticipate and overcome those pitfalls.
There are no brownie points for overcoming KDK. As a leader, that's what you're there to do.
3. DKDK: What You Don't Know You Don't Know
DKDK is where the dragons lie. Unlike KDK, by definition, in DKDK we can't know anything about those things we don't know we don't know.
Consequently, this is where the surprises emerge, sudden disruption - the stuff that blind-sides us, the stuff that leaves us saying "Where did that come from"? New business models that we never could have imagined. Major competitors suddenly devouring each other. Red-hot technology, rendered useless overnight by a new, white-hot competing technology.
Rarely do businesses perish because of something in KDK. It's from here, the uncharted territory of DKDK, that the 800lb gorillas emerge that threaten your business. It's here, in DKDK, that existential threats lurk.
The question, therefore, is how do you minimize DKDK-- or at least shrink it to manageable proportions? The answer, of course, is that you can't eradicate it entirely (by definition), but observing two important principles will get you much of the way there:
Eradicate as much of your KDK as you can. When you turn some portion of KDK into a KK (a sales manager learning the principles of accounting for example, or a research scientist gaining an understanding of marketing) something interesting always happens: a portion of DKDK solidifies into KDK (the sales person gains a whole new perspective on margin control; the research scientist understands the importance of predictable product cycles). The more you master your KDK, the smaller the area of your DKDK becomes.
Play well with others. My blind spots are not yours. Much of what's in my DKDK is almost certainly in your KDK, if not your KK. Surround yourself with a strong cadre of differently-thinking individuals (yes-men or women don't help), talk often, muse a lot, speculate and ponder. You'll find that your group DKDK is much smaller than any one individual's.
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