Know-How Moves Markets
In early 2018, Brian Roberts, CEO of Comcast, a $155bn US media company, began an attempt to take over the Sky satellite television business. In such a large transaction lots of advisors are involved. There is lots of analysis to be done to understand the right price to offer and the payoff of such a deal.
Visiting the UK, Roberts spent the weekend not huddled with his bankers and consultants. Instead he jumped in a black taxi and headed off to a shopping centre to spend time talking to Sky salesmen working out of pop-up stalls. En route, a talkative taxi driver regaled him with the differences between Virgin and Sky. Later, with the salesmen in the shopping centre he saw their immense pride in and passion for their product.
That weekend he decided to go for the deal. By July 2018 Roberts had claimed his prize.
This is a simple example, but it demonstrates that an army of investment bankers and corporate advisors is useful when you’re doing a $22bn takeover but sometimes you need a different, ‘on-the-ground’ perspective.
When we started Stripe Partners our goal was to ‘do’ research differently and offer a different form of strategic advice.
One of our first projects involved taking a team of senior Duracell executives camping in a US national park with some outdoor enthusiasts. The execs quickly learned how not to pitch a tent and that collecting firewood is illegal. They picked up campcraft, like digging a shallow hole beneath a water tank to prevent muddy puddles developing in the cooking area. A visit to the bushes in the middle of the night drove home the worth of a good torch under the dark sky of a new moon.
We’ve always focused on what sort of knowledge is useful and not just in some editorial ways in what knowledge needs to be communicated and how. We’re interested in what knowledge is and how, and why, it compels or supports business to act. Our evolution as a business has led us to question different types of knowledge.
Our practice has been influenced by the British philosopher Gilbert Ryle’s distinction between ‘knowing that’ and ‘knowing how’. Knowing that is formal and factual knowledge – like a recipe in a cookbook. Knowing how is the ability to knock that dish together – it’s practical, fluid and intuitive knowledge. Both forms of knowledge complement each other. Roberts was seeking out know-how to inform the knowledge that his bankers could give him.
Developing know-how requires a hands-on approach. It might not always involve camping but it does mean putting yourself in others’ shoes. And it’s worth the effort. The campaign we developed with Duracell was one of most successful in Procter and Gamble’s history. The reason, the marketing director contended, was that the team really got what the outdoors means to people who take it seriously. They had knowledge bred of familiarity. They had a feel for the outdoors.
Five years into our journey we’ve reflected on these types of knowledge and are putting know-how at the centre of our mission.
Time for Know-How
Too many organizations rely only on ‘knowledge that’. The lust for big data illustrates this.But ‘knowing that’ doesn’t always enable organizations to make the best decisions. Abstract models, averages and aggregates allow organizations to know things but not to have a feel for them. This is a brittle knowledge, it’s stripped of empathy and emotion. It tends to view the world mechanistically – as something that conforms to rules. The financial crisis, polling failures, political earthquakes and business missteps show the dangers of relying only on this sort of knowledge. The world is too unpredictable.
There can be no complete playbook in business. The environment and market landscape changes too often and unexpectedly. Data about the past is little guide to the future. It’s like the middle game in chess when the formulaic moves of the opening sequence have been made. At this point players rely on spotting patterns, recognising the situation that’s unfolding and identifying an opportunity. They need to depend on a ‘feel’ for the situation they’re in. This is helped by, but extends way beyond, a formal analysis of their situation.
Smart businesses have good data and a good feel for what it is saying.
Our structured approach to client engagements is designed to give business leaders access to the world and to develop the emotionally rich, practical, culturally rooted know-how on which the best decisions are made.
When you’re making new products, for a future that is yours not to predict but to invent and when the past is a poor guide to the future you need know-how.
Stripe Partners: Know-how to invent the future.