Modern organisations employ professional coin flippers to make decisions.
Deming, Seddon and Checkland all advocate making decisions and making change based on knowledge – but what exactly is knowledge, and how to do you know when you have it?
Russell Ackoff wrote of a hierarchy of content in the human mind starting at the lowest level with data, moving up to information, knowledge, understanding and ending with wisdom. He also rather helpfully calculated that given the adage that an ounce of information is worth a pound of data, an ounce of knowledge is worth a pound of information, an ounce of understanding is worth a pound of knowledge and an ounce of wisdom is worth a pound of understanding, an ounce of wisdom is worth approximately 42,000 ounces of data.
Knowledge type content sits in the middle of this hierarchy, so what is knowledge and how do you know when you have got it about a subject?
Rather helpfully Deming gave us a pretty good clue in his System of Profound Knowledge, a set of four interacting principles for operating and improving organisations. The four principles are as follows;
- Knowledge of Variation
- Appreciation of a System
- Theory of Knowledge
- Knowledge of Psychology
What does the Theory of Knowledge say about how to know when you know?
Theory of Knowledge is another name for a branch of philosophy; epistemology.
Epistemology has origins as far back as the socratic dialogues, and philosophers to this day continue to debate what it means to have knowledge. However, there appears to be some well established arguments that have sufficient merit to work as a test for knowledge for practical rather than academic purposes. Let’s take a look;
Three Types of Knowledge
Epistemology recognises three types of knowledge;
To have acquaintance knowledge is to know someone, for example, I know people in my family, I know my friends and my colleagues. You can have acquaintance knowledge of other things such as places (I know Paris), or sensations (I know the taste and smell of brussel sprouts).
To have how-to knowledge its to have the knowledge of how to do something. I know how to tie my shoelaces and how to ride a bicycle and therefore I have this knowledge.
To have propositional knowledge is to know that a proposition, argument or assertion is true. For example I know that water in its liquid form is wet and that the earth is round not flat.
Given the above definitions, it can be seen that knowledge based decision making is concerned with Epistemic, Propositional Knowledge.
What is the Epistemic Definition of Propositional Knowledge?
Here it all gets rather woolly and since the academics have been debating this for millennia, I’m not holding my breath for anything conclusive. However, amongst numerous tests or definitions of propositional knowledge, the prevailing test appears to be the test for Justified True Belief – JTB.
The JTB test tests for knowledge of a proposition on the following three bases;
- The proposition must be true
- The proposer must believe the proposition to be true
- The proposer must be justified in the belief that the proposition is true
I know that rain is the tear-drops of fairies
- Is this true? (no – rain is made from water) *
- Do I believe it to be true? (no)
- Is my belief justified? (this is a moot point since i don’t believe it but if I did it wouldn’t apply because there is no evidence to support the idea that rain is the tear-drops of fairies)
Given the above I cannot have knowledge that rain is made from the tear-drops of fairies.
* Note the paradox in the test for TRUE – how can you determine whether a proposition is true without knowledge? I’ll leave that to the philosophers – its beyond me!
I know that rain is made from water
- Is this true? (yes – paradox of test for truth aside)
- Do I believe it? (yes)
- Is my belief justified? (yes, our own experiences plus scientific analyses of the content of raindrops show beyond reasonable doubt that rain is made from water, at least primarily)
Therefore, I have knowledge that rain is made from water.
These rather facetious one dimensional propositions are all very well but things get a little more interesting when you add in the dimension of time;
I know that tomorrow morning I am going to be hit by a bus, I just know it
….. fast forward 24 hours…..
….. AND indeed, the next day I am hit by a bus
Did I have knowledge that I was going to be hit by a bus?
- Was it true? (yes, I was hit by I bus) (I wasn’t really)
- Did I believe it? (yes, at the time I believed it was going to happen the next day)
- Was I justified in believing it? (no – I had no evidence or reason to believe it, I just believed it)
The fact that I believed I was going to be hit by a bus did not mean that I knew I was going to be hit by a bus. Belief alone is not sufficient without justification.
Therefore I did not have knowledge that I was going to be hit by a bus.
Very interesting. I believe that if you have read this post to this point you have found the post interesting, and the fact that you have done so, is some justification to my belief that you have found it interesting. I cannot have knowledge of you finding this post interesting or not. So if you didn’t, or for that matter even if you did, here is why it is important;
Making Decisions Based on Knowledge
People make thousands of decisions every day. We decide when to get out of bed, what to wear and what to have for breakfast. These decisions are based on experience and intuition.
We also make instinctive decisions about how to react to the external environment; for example, what would you do if you accidentally bump into someone in the street? Apologise to them or admonish them? These decisions can be made with little if any conscious analysis.
In organisations, as staff and leaders, people are called upon to make decisions that can carry far reaching consequences, both internally and externally. We generally accept that level of decision making is highly considered, informed and not taken lightly. At least that is the belief….is it true?
My proposition is that some of the most critical, impactful decisions made in organisations are made in the absence of knowledge, that in other words, they do not pass the test for justified true belief;
“Our costs are too high, we need to reduce the amount we pay for widgets by 10%” – how do we know our cost problem is related to widgets? how do we know their cost is “too” high? what is the “right” amount? what is the delta? where is the data to give us justified true belief?
Every day in every organisation, decisions are being made without knowledge – they are being made based on assumptions that can only pass the belief test, they are often not justified and are often not true. But this is just a proposition, and one that you would have to test for yourself to determine whether you know it applies to your organisation or not. So why not give it a try? The next time you observe some decisions being made on the basis of a proposition, why not test that proposition for justified true belief, but remember to consider the other elements of Deming’s System of Profound Knowledge in the test for justification;
- Does the proposition consider the impact of variation? If the proposition is based on data expressed as averages or grades – probably not
- Does the proposition consider the wider systemic variables? If the proposition is based on a linear cause = effect argument – probably not
- Does the proposition consider psychological/human variables? Just probably not!
Would you make life changing decisions without knowledge of the variables? Why would you not apply the same rigour to organisation changing decisions?
There is no substitute for knowledge.
W Edwards Deming
Best efforts? We’d be so much better off if some people just took turns going to work.
W Edwards Deming