Unknown Unknowns and Knowing What to Do About Them
“There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns - the ones we don’t know we don’t know.”
— Donald Rumsfeld
Founder-led and lower middle market companies often scale successfully for years through a combination of deep market knowledge, a unique or exceptional market proposition, hard work, outstanding customer service, and relentless execution. Revenue grows as does a loyal customer base, and the organization develops tenured, trusted employees. Over time, the company’s decision-making processes, reporting structures, and operating rhythms emerge as a recognized culture that works well.
While the business may be operating well, the hidden danger for such companies is often not the problems leadership is aware of. It is the issues the organization never realized were developing beneath the surface.
The management approaches and operating structures that successfully supported a business at $10 million in revenue often will not scale effectively to $25 million or beyond without evolving operationally. If those companies only continue to do as they have done and fail to improve people, processes, practices, technology, and organizational knowledge, they will eventually reach an unforeseen inflection point at which the company becomes vulnerable - both to competition and to scaling beyond its intellectual and operational capacity.
Smart leaders, investors, and owners understand that blind spots can create serious risk and that waiting for problems to fully surface isn’t acceptable. In many situations, companies do not require dramatic intervention. Instead, they may benefit from an outside perspective and ongoing operational guidance in the form of operating reviews that would include:
A session generally focused on the hard sciences of the business: financial performance, including cash flow and margin trends, operating metrics, and execution against key initiatives
A session generally focused on the soft arts of the business: leadership alignment, organizational structure, focus and effectiveness, communication, talent development, and company culture
Inter-session independent analysis, review, and communication to promote continuity, follow up on active issues and initiatives, and address important developments arising between meetings
v3.0 brings experience with lower middle market and Fortune 100 enterprises across finance, operations, leadership, execution, organizational effectiveness, and other key areas of business performance. If you are concerned that your firm, a client, or a portfolio company may only know what it knows and could benefit from such experience, we would be happy to discuss whether ongoing, lighter-touch monthly operating reviews may be appropriate.
All the best,
Bob Fitts
CEO
v3.0
Miami, Florida
bob@v3llc.co
212-300-5568
About v3.0
Founded in New York in 2008 and headquartered in Miami since 2011, v3.0 helps founder-led and lower middle market B2B companies across the U.S. and beyond navigate complex challenges. We specialize in situations that demand broad, hands-on leadership across multiple functions for companies at major inflection points in growth, exit, integration, or turnaround. We serve as Interim or Fractional CEO/COO/CFO or as an advisor. Our work spans strategy and operations, finance and marketing, analytics and execution.