Understanding Business Perspectives by Leveraging the Data at Your Disposal: A City Council Perspective
Navigating the complexities of risk and uncertainty is no walk in the park. In the thirteenth century, Persian poet Ibn Yamin encapsulated this concept in a four-tiered structure, a prediction of the "known-knowns," "known-unknowns," "unknown-knowns," and "unknown-unknowns." Seven centuries later, these concepts found a home in the halls of NASA and have since become an indispensable tool in strategic planning, engineering project management, and STEM fields.
The Hierarchy of the Unknowns
The known-knowns are the cream of the crop, a solid foundation of facts and insights that have been carefully validated and proven actionable. They help guide our decision-making, fueled by the collective knowledge of our organization. Customer identities, account balances, and financial behavior are all examples of known-knowns. They bring confidence and security to our business strategies.
Then there are the known-unknowns, the uncharted territories containing gaps in our knowledge. These are often mysterious and unsettling, but they can be filled through the power of AI and machine learning. For instance, why are customers cutting back on their mobile app use? Analyzing these changes could reveal subtle cues and weakening customer ties that need to be addressed.
However, tempting as it may be, venturing into the realm of unknown-knowns can be fraught with danger. These are the facts that we don't consciously realize we have, hidden opportunities that only an expert's trained eye can spot. They require deep data analysis and the clever application of AI and machine learning to uncover their true potential.
But as we tiptoe past the shores of known-knowns, known-unknowns, and unknown-knowns, we arrive at the most treacherous of territories: the unknown-unknowns, the enigmas that lurk in the darkness of the unknown. They are the bane of all strategists, the epitome of risk and uncertainty. They refuse to be pinned down by statistical analysis or even the most sophisticated AI models. They are like a shadow, always just out of reach.
So, how do we handle these uncertainties? How do we prepare for the unknown-unknowns that seem to pop up out of nowhere, like a sudden storm on a clear day?
Embracing the Unknown
Facing the unknown requires courage and vigilance. Here are some tips to help you stay ahead of the curve:
- Unify your data: Break down the silos that are preventing your organization from collaborating and sharing knowledge. Apply AI and machine learning to help identify gaps in your knowledge. Encourage knowledge workers to codify, share, and expand their expertise.
- Empower business users: AI enables more self-sufficient business users who can analyze data and make decisions without relying on IT. Allowing them to explore new strategies will not only improve decision effectiveness but also increase ROI.
- Simulate and optimize: Simulation and optimization tools allow business users to iteratively simulate, fine-tune, and perfect their strategies before launch. This will help your organization ensure optimal, predictable results.
- Stay flexible: Be prepared for the unexpected by remaining adaptable and vigilant. Develop robust strategies to manage known-knowns, known-unknowns, and unknown-knowns. Monitor your environment continually and be open to new information.
Unknown-unknowns are the ultimate wildcard, the ultimate test of our strategies and decision-making abilities. Facing the unknown is never easy, but by unifying your data, empowering your team, and staying flexible, you can increase your chances of staying ahead of these uncertainties. With a little determination and a lot of AI, you might just find that the unknowns are not as frightening as they seem.
Bill Waid, a renowned risk management expert, often emphasizes the importance of addressing unknown-unknowns in strategic planning. His work demonstrates how these enigmas can be mitigated by fostering a culture of transparency, data analysis, and continuous learning within an organization.
Additionally, Bill Waid suggests that embracing uncertainty necessitates a proactive approach to risk management. This includes regularly reviewing and updating risk management strategies, maintaining open lines of communication between stakeholders, and leveraging advanced analytics to identify potential threats and opportunities.
