Do we really know?

Do you understand gravity? There might be multiple answers to this question. Some people might say that gravity is the curvature of space-time. Some who haven’t studied Einstein’s work might say that gravity is the force that pulls objects towards each other. Some people might say that it is the force which the Earth exerts on us and that is why everything is pulled downwards. All these are answers that are theoretical in nature. A toddler will not be able to explain gravity in any of these ways. But still they do understand that if we hold a ball up and drop it, it will fall down. All of us, before we learn about gravity in physics class, understand it in this very practical way.

You see, we have discussed two different kinds of knowledge here. The first one is knowledge that is easy to articulate, write down, and share with others, like a scientific definition. This is called “explicit knowledge”. The toddler, on the other hand, with the intuitive knowledge of gravity, also has some knowledge about gravity but it is not explicit knowledge. It is what we call “tacit knowledge” (a term coined by philosopher Michael Polanyi). It is knowledge that is much harder to fully explain because it is embedded in our ability to do something, recognise patterns and make judgments.

You can explain to someone how to ride a bicycle. You can tell them where to put their hands, how to pedal and how to maintain their balance. But none of those instructions completely transfer the ability to ride a bicycle to them. At some point, they have to get on the bicycle. They have to wobble, fall, correct themselves and gradually develop an intuition for balance. The explanation and the ability are not the same thing.

At this point you might think that explicit knowledge is theoretical and tacit knowledge is based on practical experience. But there is a crucial distinction here. A few years back, I was obsessed with a specific kind of YouTube channels which posted short 10-20 minute explainers of business case studies. These videos explained how big businesses work. One of the videos was a case study on Nike. The host said something like, “Nike has an incredible superpower, its distribution network!” I used to find these business case studies very interesting and I thought that these were teaching me a lot about how business works in the real world. My father runs a small business as well. He has been running it for 20 years now, and I was once talking to him about how distribution works in his industry. He gave me an extremely long and detailed lecture on it. There are distributors to deal with. Regional, national and international regulations. Transport costs. Packaging and shipping. Negotiations with vendors and customers. Certifications. Taxation. Insurance against natural calamities, fire and theft. Product quality checks. Warehouse management. Inventory tracking. And hundreds of other small things that have to work together before a product can reach a customer. The YouTube video gave me theoretical knowledge but my father had practical insights. But he was able to articulate these practical insights. His practical knowledge was explicit, not tacit. But during the discussion, we were discussing a specific customer and the payment terms we had set for that customer. My father said that this customer had a reputation for defaulting on payments or paying very late. So the payment terms explicitly stated that we would receive the payment upfront, before dispatching the goods. And he knew this without browsing the internet for the credit history of the customer. It was his 20 years of experience that had given him the “gut feel” of which customers would pay on time and which would default. When I asked him how he knew this, he said, “I know from experience”. And that is tacit knowledge. Explicit knowledge can be theoretical or practical.

There are many things in life that we cannot fully understand without having firsthand experience doing it. Building a business is one of them. There are many other examples of such things. One of them is being in a long-term relationship. These things require us to dive right in without any experience, make mistakes, feel the burden of making decisions, live with their consequences, and ride the roller-coaster of emotions that accompany it. Explicit knowledge alone does not work in these cases. The intuition or the “gut feel” is developed by feeling the emotional weight of the decisions we make.

But shouldn’t knowledge be objective? You might argue. If tacit knowledge is based on personal experience, it is bound to be limited, and even biased a lot of times. And you are correct. The toddler who understands gravity intuitively would never be able to define gravity as space-time curvature. They would also never be able to define gravity as the force that pulls any two objects towards each other because their experience just says that the Earth pulls us due to gravity. I don’t pull this desk in front of me. That is not intuitive at all. The sample size of the toddler’s observations is simply too narrow to understand the full reality. Similarly, my father has run just a single business for 20 years. He might never be able to understand the nitty-gritty of some other business or industry. Hence, the goal is not to reach the objective truth with tacit knowledge. It is more concerned with getting things done in the real world rather than being accurate. And that is when explicit knowledge comes in. It is used to evaluate whether the tacit knowledge we built from experience is accurate or not.

Real expertise is built when both explicit and tacit knowledge work together in a feedback loop. Knowing a bunch of facts will give us a lot of explicit knowledge, but to actually accomplish something in the real world, tacit knowledge is essential. Having tacit knowledge alone will make you biased, and you may not be able to see things in some context that is not your own.

Hope you liked this one! See you next time!