Strategy Blog

Known Knowns and Other Unknowns

Several years ago, Donald Rumsfeld, then Secretary of Defense, spoke eloquently about Known Knowns, Known Unknowns, and the dreaded Unknown Unknowns. Mr. Rumsfeld omitted one category, however, and that is Unknown Knowns.

These four sets of simple word-pairs convey powerful conceptual ideas with relevance to developing marketing plans and marketing strategies—as well as military strategies. Marketing decisions based on Knowns—truth, facts, and evidence—are far more likely to succeed than those based on hopes, wishes, and mythology.

Let’s take a look at these four sets of word-pairs as they relate to marketing and marketing strategy.

Known Knowns

In a perfect world, Known Knowns would be facts and evidence based on scientific research and scientific methods (like marketing research, controlled experiments, actual test markets, product testing, advertising testing, historical sales results, and customer records). Known Knowns would provide reliable and valid facts and evidence that business decisions and marketing decisions could be based on. However, most Known Knowns are not really Known Knowns. For every one scientific fact in the marketing world, there must be at least 99 myths, half-truths, illusions, and wishes. Compared to 30 years ago, or 50 years ago, corporations are spending a smaller share of sales on scientific research and scientific methods to answer marketing and strategy questions. Moreover, corporate marketing research budgets are increasingly fragmented as new technologies, new tools, and new marketing fads drain resources away from core scientific and marketing research spending. Known Knowns is a small category of knowledge, and Known Knowns is very likely a smaller category now than it was in the past.

Known Unknowns

These are questions and variables that we have no reliable and valid data or information about, but of which we are fully aware. This is a large category, especially if we are completely honest with ourselves about what we really know and do not know. The human race tends to be over-confident about its knowledge and abilities, and tends to bumble along in a blissful state of unknowing ignorance. Therefore, we are very likely to underestimate the number of Unknowns that surround us. Some Unknowns are easy to admit: we don’t know what the weather will be like in the future; we don’t know what the economy will do next year; and we don’t know how long we will live. Other Unknowns are more difficult to admit: do we really know about our customers and their behaviors? Do we really know if our advertising is working? Do we truly understand the variables that drive the success of our brands?

Unknown Unknowns

These are the blind spots, the problems, issues, and variables we have no awareness of. These are often the most dangerous variables and situations we ever face because they can catch us completely by surprise. Unknown Unknowns arise from lack of awareness, information or knowledge, and from psychological or cultural blindness. Strong emotions, religious beliefs, rigid educational training, societal norms, cultural values, and rigid opinions can blind us to obvious truths. The world of marketing is full of Unknown Unknowns. Every CEO should observe wide-ranging focus groups about his or her industry and company every year or two, without any consultants or employees around to taint and contaminate these revelations of unvarnished truth. CEOs with thin skins might not be able to handle such an exposure to Unknown Unknowns, but CEOs who can listen, accept, and learn would find that such research can reveal many of the Unknown Unknowns.

Unknown Knowns

There are things we know, but don’t know we know. This is a strange category, and one might argue is an impossible category, a contradiction. When someone points it out to us, we say, “of course, I know that.” Over the years, I’ve met with and discussed upcoming research projects with hundreds and hundreds of senior executives, marketing directors, and marketing researchers. These preparatory project discussions are intended to uncover what the company already knows, or thinks it knows. When the research project is completed and the results are presented to the same executives, a not uncommon reaction is “We are already aware and know all of this,” even though they did not mention any of these “facts” during the meetings before the research. This relates back to an earlier assertion that the human race thinks it knows more than it actually knows, and it’s easy after the answers are presented to delude ourselves into thinking that we “already knew” the answers. This is only part of the story, however. In many cases, executives are aware of the findings “after the fact” in that they have heard employees or customers mention some of the issues previously. However, the executives’ awareness never reached a threshold level or decision level. The executives were not sure enough about the information to base any decisions on it. We can know things, but not realize how important they are. We can know things, but not understand how the pieces fit together or know what is causing what. We can be blind to the obvious, or blind to the implications of the obvious. Unknown Knowns are commonplace.

What this article hopes to convey is that Knowns are fewer and more rare than the human race (including senior executives) believe, while Unknowns are ubiquitous; they surround us on all sides. Senior executives tend to think that they know more than they actually know; after all, they are members of the human race. The ultimate quest of marketing research is the scientific search for truth, facts and evidence that executives can confidently base decisions on. The ultimate prize is understanding cause and effect so that executives know which buttons to push and which levers to pull to change the trajectories of their companies and brands.

Jerry W. Thomas

Chief Executive Officer

Jerry founded Decision Analyst in September 1978. The firm has grown over the years and is now one of the largest privately held, employee-owned research agencies in North America. The firm prides itself on mastery of advanced analytics, predictive modeling, and choice modeling to optimize marketing decisions, and is deeply involved in the development of leading-edge analytic software. Jerry plays a key role in the development of Decision Analyst’s proprietary research services and related mathematical models.

Jerry graduated from the University of Texas at Arlington, earned his MBA at the University of Texas at Austin, and studied graduate economics at SMU.

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