Knowledge
Knowledge is more than data, facts or information; it’s about applying understanding and know-how profitably to improve results. Societies are most prosperous when knowledge is plentiful, easily accessible, relevant and inexpensive. Such knowledge results from openness, free speech, challenge, free association, mutually beneficial trade and market signals, including prices and profit/loss. Anything that restricts the creation and use of knowledge distorts reality and hinders progress.
One of society’s greatest sources of knowledge is what each individual knows about their specific needs, preferences and circumstances, what they are good and not good at, and how they can best contribute. Because this knowledge is widely dispersed, it is impossible for one person or small group to make optimal decisions for everyone else. That is why prosperity and progress require a bottom-up approach in which individuals are empowered to develop and apply their abilities.
No matter how capable our employees may be, our company cannot possess all the knowledge necessary to succeed long term. To overcome entropy and at least match the creative destruction of our best competitors, we need a culture that values lifelong learning and innovation. This includes:
- Building broad knowledge networks to enable us to acquire the most valuable knowledge from any and all sources (Republic of Science).
- Employees developing the personal knowledge that enables them to solve problems, identify opportunities and discover better ways of doing things.
- Internally sharing our ideas and knowledge, soliciting and providing challenge (Scientific Method and Challenge), and identifying and closing gaps.
- Developing reality-based measures and doing marginal analysis to help us learn what works, improve results and increase our rate of transformation.
- Conducting well-designed experiments (Experimentation and Experimental Discovery).
Hayek recognized that human progress is not the result of human design but of experimentation and centuries of accumulated knowledge. The institutions, customs and traditions we take for granted reflect far more wisdom than any one person can possess. As Sir Isaac Newton said: “If I have seen further, it is by standing on the shoulders of giants.” Likewise, the organizational knowledge embodied in our principles and processes developed over time. Today’s employees benefit from the culture, know-how and practices developed over the years by employees they never met.
Principles such as integrity, humility and openness are vital to, and promote respect for, this organizational knowledge. At the same time, our principle-based framework encourages us to continually challenge our paradigms and update our vision of what is possible so we can innovate, transform and succeed long term.