You Don't Know What You Don't Know

“Sometimes strategic risks are so pervasive, they are overlooked as risks.”

--Mike Delurey, Booz Allen Hamilton

Do you want to know how Booz Allen Hamilton defines "strategic risk"? According to the consulting firm the characteristics of strategic risk include:

• Complexity
• Potential to impact multiple business units
• Potential to affect short-and long-term value

That's according to an article now appearing in "News & Ideas" section of its website titled: "Simulation Demonstrates that an Integrated Perspective is Important to Social Risk Management." It's about a simulation Booz Allen Hamilton conducted with Harvard's Kennedy School of Government of what happens when a company faces major public protests against its activities.

Among the findings: that social risk is not just a PR problem, but fits this definition of strategic risk and should be treated that way. Furthermore, one of the things that makes social risk risky is that it will be not be recognized for what it is. If you connect the dots, that's what makes strategic risk risky as as well — that you don't know what you don't know (YDNKWYDK).

In fact, YDNKWYDK seems to me to be one of the most general risks of all — and potentially an area of research that could bear all kinds of fruit — and in areas far a field of corporate social responsibility. It's already a focus where computational linguistics meets search.

If you don't know what you don't know, what do you type into Google? My client, Basis Technology, makes a product that bolts onto a search engine that lets you enter words like "person" or "date" to retrieve instances of those classes regardless of spelling or punctuation. It's a practical metaphor for the bigger issue of how to get answers to questions you don't know enough to ask in the first place.

YDNKWYDK also speaks volumes about innovation. For one thing it tends to preclude absolute assertions. Take for example Geoffrey Moore's comment a couple of months ago that trying to be the best at something makes you a sucker. I agree with Brent Edwards who said in his blog, Innovation Science" that: "Like most rigid declarations, in some cases Moore’s theory holds and and in some cases it doesn’t."

Or take Harvard Business School professor Andrew McAfee's comment that there are no recent tech breakthroughs that make SOA more achievable.

In each case, the absolute assertion kills the discussion (and by extension innovation) because there's no room for YDNKWYDK. That's taking a really big risk.