RANDOM KNOWLEDGE

There's plenty of knowledge in your company. The
problem is telling who has it. For example, you're
at the big meeting to decide what to do about the
coming Flannel Crisis that threatens the very marrow
of your business. Maria says to lay in a supply.
Germaine says to move to synthetic flannel. Oscar
says to set fire to your competitors' warehouses.
Frances excuses herself and goes to call her stock
broker. Someone in the room undoubtedly is saying
the truth. Someone has knowledge. But who?

This is, in fact, the conundrum that gave rise to
the idea of knowledge. The ancient Greek
philosophers heard lots of people mouthing off --
Athens was a participatory democracy, after all ...
so long as you were a man, with money. But how do
you separate mere beliefs from knowledge? If you
could do that reliably, you'd be on the road to
Truth, Goodness and the Athenian Way.

In corporations, we generally do it in two related
ways. First, we look at the person's track record.
The fact that Maria was right about the the great
Steel Wool crisis of '93 and the great Marmite
crisis of '97 gives her some credibility when it
comes to the current flannel crisis. Second, we
listen to those above us in the hierarchy. Not only
do they have the authority to tell us what is
knowledge and what just sounds like a good idea, but
presumably they got there by having a track record
like Maria's.

My friend Stowe Boyd compares this to a particular
telephone scam. The way he tells it, you get a call
one day from someone who says, "Next week, ABC stock
is going to move up. I'm not asking you to buy any
stock from me, but just take a look." Sure enough,
ABC goes up. Next week the scam artist calls you
back with another pick: "DEF is going to go down."
Sure enough! For five weeks, this guy predicts the
behavior of stocks. The sixth time he calls he says,
"I've been right the past five times. This time I
have a stock for you and I do want you to buy some
shares through me. Waddya say?"

Here's the trick. This guy started in the first week
by calling 100 people. He told half that ABC would
go up and half would go down. When ABC went up, the
next week he called the ones for whom he'd predicted
accurately and he told half of them that DEF would
go up and half that it would go down. At the end of
five weeks, he has three people who think he is a
stock market god.

Stowe's point, as I understand it, is that the ranks
of management are filled with lucky people who
believe they got where they are because they were
smart enough to have made the right decisions. (By
the way, be sure to check out Stowe's new 'zine,
Message from Edge City, at http://edgecity.convey.com.)

We can lower the odds of picking the wrong
"knowledge" by considering who's saying it,
including the person's track record but also all the
other things we listen for: attitude, cynicism or
optimism, self-interest, tendency to exaggerate,
bravery, grasp of contexts, grasp of facts, sense of
humor. But the fact is that the world is terribly
complex, so thinking that we can make well-founded
decisions is itself a type of denial. The truth is
that knowledge is a lot closer to luck -- or worse,
a scam -- than we generally want to believe.