Unknown known

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There are five types of known.

The Rumsfeld three:

And the Jolly Contrarian three:

Index: Click to expand:

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Those who cannot remember the past are condemned to repeat it.

George Santayana

Unknown known
/ʌnˈnəʊn nəʊn/ (n.)

One type of unknown that doesn’t appear in Donald Rumsfeld’s taxonomy of “knowns”, but which should, since it is the source of more catastrophe in our time than any of the others, is the “unknown known”.

Unknown knowns are the things you do know, but you don’t know you know — or, at least, conveniently forget you know — at just the point it would have been most prescient to remember them.

Things that, courtesy of that tremendous fiction, the corporate veil, an institution may be deemed to know, but about which none of its present representatives has the faintest clue; things which one might have once known but forgotten; things which one is in total denial about; generally, the unpleasant realities of our modern, complex world to which one is not, presently, facing up.

They are as Slavoj Žižek puts it:

“the disavowed beliefs, suppositions and obscene practices we pretend not to know about, even though they form the background of our public values.”

Unknown knowns are a source of catastrophic risk, as the repeal of the Glass-Steagall Act in 1999 by the Financial Services Modernization Act of 1999 — hello, global financial crisis[1] — and the continued use, even now, of the Black-Scholes option pricing methodology — goodbye, LTCM, Lehman, Bear Stearns, — which worked serviceably well to model the price of options except in times of market stress, when you most need it — demonstrates.

Contract databases as unknown knowns

Unknown knowns include the pandaemonium of devils in your detail: the great preponderance of legal terms in your contract portfolio that still bind the firm but are neither reflected in any risk system nor alive in the minds of a single soul in the organisation, but which were once, by someone, agreed to — here we use the passive deliberately, for no-one knows by whom — and thus they lurk there, known but at the same time not known, buried deep in the organisation’s systemantic sediment.

These are, in corporate theory, known, or deemed known: courtesy of each, the firm is short an option — out-of-the-money, no doubt, but volatile and liable to swing suddenly, should a customer pitch up unexpectedly and insist upon them, or should a regulator, in the aftermath of a disaster, require a hindsight audit of your portfolio.

But until someone actively pulls the document in question and crawls through it — and that means wanting to look through it, when the institutional wisdom of plausible deniability counsels sharply against asking hypothetical questions to which you don’t know the answer — the sum total of information in your contract database comprises “unknown knowns”.

Management truisms

Then there are articles of management dogma which everyone knows perfectly well are stupid, useless, and damaging, but which when gathered together, the collected contrives to pretend are sensible ways of managing risk: offshoring and outsourcing, prioritising cost over organisational simplicity, preferring form and process to skill and experience, notwithstanding well-established principles of design and lean production management, and the great saws of human resources: forced ranking, natural attrition, 360° Performance appraisals and SMART goals that are derived from them — articles of faith which continue to not just cling to the dwindling autumnal cadence of a bad idea in its twilight years as you’d expect, but remain in rude, fecund, fruity summer health, despite compendious research that they are ineffective,[2] prone to abuse,[3] widely resented,[4] and as a promotion strategy that they suffer in comparison to promoting staff at random.[5]

See also

See also

  1. Yes, yes — I know it wasn’t just the repeal of Glass-SteagallDavid Bowie was also partly responsible — but it didn’t help, did it?
  2. So sayeth the Harvard Business Review.
  3. So sayeth the New York Times.
  4. So sayeth me.
  5. So sayeth The Leadership Quarterly.