Next time you’re out walking, do the following. Stop and look around. Notice the details you have likely missed despite walking by a location countless times. You might see a patio that you didn’t know was there or you’ll see a restaurant hidden away from view.
It’s impossible for us to notice every little thing in the world around us. That’s why we are often surprised when we see something amazing that has been right under our nose the entire time.
The same dynamic applies to companies. The best companies are constantly looking for fresh ideas, innovative approaches or the next big thing. This isn’t groundbreaking news.
The amazing thing is that these ideas are often staring at executives right in the face.
All companies have employees who have great ideas that aren’t known widely enough. Think of the hotel doorman who has noticed how customers tend to struggle to find the reception when they first walk in. Or the retail employee who knows that certain items are really popular but there’s never enough of them.
I call these ideas “hidden knowledge”. It’s all there but companies aren’t able to consistently convert it to visible and useful knowledge. This means that executives are making important decisions with a partial understanding of what is going on. Imagine how much better decisions could be if they could access all of the possible knowledge.
The sizes of the visible and hidden knowledge boxes are different for each company. Dillard’s, an ultra-successful retail chain in the US, has done a great job at surfacing hidden knowledge. Executives visit stores on a weekly basis to understand what is working and what isn’t. Their laser focus has created fanatical customers and incredible stock growth.
Bed, Bath and Beyond offers a counterexample. I wrote about their disastrous strategy that dismissed the ideas of store employees. They outright rejected the process of seeking hidden knowledge and simply made decisions based on what they thought they knew.
The key for companies is constantly working to unearth the hidden knowledge and convert it into raw materials for better decisions. It can’t be just a one-time event because knowledge is being created every day. One time events are basically the pitch for TV shows like Undercover Boss, which may help in the short term but you’re bound to find yourself in the same position if there isn’t a systematic approach to finding hidden knowledge.
Photo by Stefan Steinbauer