The knowledge walking out your door
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At Drop Bio Health, I was convinced of something simple. If people could take a blood sample at home, from their finger, and post it back to our lab, they’d do it more often. And if they did it more often, we could see the changes that matter, like the early signals of chronic disease long before symptoms arrived. Convenience was what made early detection possible, and early detection was the point.
That conviction rested on a difficult problem. A small blood sample taken at a kitchen table and posted in an envelope is not the same as one drawn in a clinic and analysed within 24 hours. Hormones and proteins start degrading the moment the sample leaves the body, and they keep degrading in transit. For the result to mean anything and for a doctor to act on it, the results we returned had to be as trustworthy as one from a clinical draw. Everything depended on closing that gap.
We developed the science, the systems, and the scientific rigour to close it. But the part I keep coming back to is what that knowledge was. It was a thousand small judgements held across my team: how samples behaved, what degradation looked like, what to correct for, what to trust, and what to throw away. Most of it never made it into a document. It lived in the people doing the work, and in the calls I had to make about what we’d stake a result on.
That was the advantage. Anyone could hold the belief that people would sample at home. Far fewer could build the operating knowledge that made the belief deliverable, and that was ours. It was the kind of asset I’d have struggled to write down if you’d asked me to.
So let me ask you the question I ask CEOs. Could you describe your own tacit knowledge?
I’m talking about the unwritten ‘know-how’ you’ve gained through experience and intuition that’s led to the ways you and your business create value for others.
It’s harder than you might think.
And there’s a significant risk hiding within that question that senior leaders didn’t have to contemplate before 2022.
The invisible asset
The deepest advantage a company holds is usually the hardest for the person running it to name.
The people who do the brilliant work in your organisation often can’t tell you how, because it stopped being a decision and became instinct a long time ago. The judgement that took fifteen years to build now happens in seconds without conscious thought. And that makes it close to impossible to describe to anyone who doesn’t already have it.
There’s no line item on the balance sheet called know-how. We take it for granted because we have the people, and the people have it.
Here’s what makes this idea harder if you’re an enterprise business leader reading this: you don’t own the business you run.
You were handed something other people built. It holds decades of know-how you didn’t create and can’t fully see. It sits in the heads of long-tenured staff, encoded in how decisions get made and almost invisible, the way water is to fish. And a natural response is to treat that deep know-how as someone else’s concern, like the domain of the team who have been there longest.
But in my experience, that’s a costly instinct, because the unnamed know-how you’re standing on is the most valuable and most vulnerable thing in your care. What you can’t name, you can’t protect. And right now, it’s on the way out of your organisation.
Two kinds of capital
In a recent conversation with LinkedIn co-founder Reid Hoffman, Microsoft Chairman and CEO Satya Nadella framed the coming years around two kinds of capital every company now runs on.
The first is human capital. The judgement, taste, and the tacit know-how held in your people. The second is what he calls ‘token capital’. The know-how that gets captured and encoded into AI models. His argument is that the interplay between the two becomes the central question for every company, whether you are a century-old bank or a six-month-old startup.
The part that should hold a CEO’s attention is what happens when human capital becomes token capital without your knowledge or approval.
Nadella points out that the AI companies are already building training environments staffed by people who used to work at companies like yours. The know-how your business never wrote down is being reconstructed from the memories of people who walked out your door. The judgement you assumed was yours is being turned into something your competitors can rent. He calls it ‘a one-way door’. Once it leaks, it doesn’t come back, and you’re left competing against a version of your own capability.
This is the part most CEOs haven’t registered. The leak isn’t a future risk to plan for. It’s a current condition to manage.
The instinct, reading this, might be to feel cornered but the good news is that you have options, and you can start working on them today. They come down to two pieces of work. The first is surfacing the know-how you can’t currently see and describing it so you can point to it. The second is deciding how that know-how compounds inside your organisation, rather than it leaking into one that you don’t own.
Name what you’re best at
You can’t protect what you can’t describe. The good news is that the clues about what you’re best at live in the markets you have dominated. Think of it as the places you win repeatedly where your competitors can’t work out why. Tacit knowledge often hides inside outcomes you can’t fully explain, so the work is to trace those outcomes back to the judgement that produced them.
This handful of questions will get you most of the way:
Where do we win deals we arguably shouldn’t, and what does the customer tell us when they choose us over someone cheaper or larger?
What decisions does my team make quickly and correctly that would paralyse a capable outsider dropped into the same seat?
What takes a new hire the longest to learn, the part that lives in no document and no process map?
When something goes wrong, who do people go to, and what does that person know that has never been written down?
This is your baseline. Next stop, doubling down to compound those strengths.
Compound it, don’t leak it
Once your know-how is well understood, you can decide how it compounds and curb the leakage.
Nadella’s version for a company with Microsoft’s resources is to have AI improve inside a system you control, fed by your own context, with the know-how staying yours. Here’s what this means regardless of the size or industry vertical of your business:
Capture the judgement, not just the data. Your know-how lives in how decisions get made, not in the outcome alone. Start recording the reasoning behind the calls your best people make, because that reasoning is the asset.
Watch where your people pour their thinking. Every time your sharpest team member empties their judgement into a generic chatbot, they’re helping train someone else’s capability. Use the tools with your eyes open about where the know-how lands.
Build the loop you own. For an enterprise, that means your own context and data feeding systems you control, with care taken over what stays in-house. For a mid-size business, it can be as straightforward as a well-structured internal knowledge base and disciplined use of tools that keep your data private. For a startup, the secret sauce usually sits in the founders’ heads, so the work is to encode it deliberately as you grow, before it dissolves in the fight to scale.
Match the tool to the problem. Nadella’s rule of thumb is to save the most powerful and most expensive models for the hardest problems, and use cheaper, well-tuned systems for the repeatable work. Knowing the difference is its own form of advantage.
What changes when you can name it
Go back to where I started. The advantage at Drop Bio Health was never the part we could explain to an investor. It was the operating knowledge held across the team, the judgement I could only name clearly once I went looking for it.
That’s the work for you too. You can’t build deliberately on something you can’t see, and you can’t defend it either. Name it, and the advantage you’ve half-noticed for years starts to look like something you can repeat, and protect.
For those of you running a business you don’t own, this is where the work pays off in a way that matters to you specifically. You may never hold equity in the place. You can still be the leader who finally named its deepest asset and stopped it leaking out the door.
Most leaders can describe their strategy, their numbers, and their org chart without pausing. Far fewer can say, in a few short sentences, what their company knows that makes it hard to beat.
If you can’t name it, you can’t protect it. And somewhere, right now, it’s being learned by the people who used to work for you.
So here’s the question to take into your week: What does your company know that no one has ever written down, and who’s already learning it from the people who left?
PS If this essay helped, Episode 218 (The AI question most leadership teams are missing) from my podcast is worth a listen. Tune in on Apple Podcasts, Spotify or wherever you get your podcasts.
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