Several years after I began to talk to people about The 5 Secrets of Business Success, Donald Rumsfeld of all people helped me to popularise the idea that knowledge comes in several forms. He rather famously talked about the stuff you Don’t Know You Don’t Know, amongst other things, and this is a critical category of knowledge for any entrepreneur.
The reason that knowledge is so important is that the best business decisions are based on facts. There are a couple of types of “facts” – hard facts and soft facts. The hard facts are based on measurement, rational thought, analysis and objective reasoning, but there is also a very important and more subjective fact base (soft facts) which comes from direct experience. You need both to be able to make consistently good business decisions.
If this hasn’t passed the “so what” test for you yet, it is worth asking yourself how you make your decisions. To what extent is your decision making fact based? The alternative is belief based decision making, which is not supported by either data or experience, but it is a very popular approach.
If you think your decision making is fundamentally fact based, you are an exception because in most businesses the majority of decision making uses a somewhat less rigorous approach. The method that most organisations use when making decisions, and somewhat ironically perhaps particularly their most important decisions, is guesswork.
The decision makers don’t see it quite like that of course, but it is surprising just how often the decision making process does not involve people with lots of experience of making that type of decision, but also how often the hard facts are not pursued or evaluated thoroughly. Many people take the easy option and guess, basing their decisions more on beliefs than facts.
Of course I am using the word “guess” here a little provocatively, but think about how you do things. How often do you make decisions without much prior experience of that sort of decision, or without doing the sort of digging around that you know you could and probably should have done first?
This most often happens because people are just not aware that there is a whole heap of both hard and soft facts out there that could help them. They don’t know what they don’t know.
Next time I’ll elaborate on this idea as it is one of the most powerful ways of helping you to make more money, as well as being the piece of advice that you will find the most difficult to accept applies to you. However, if you can get that far you will be amazed at the impact it makes on your business.
Bye for now.