The knowledge-principle-action framework is a way to take mere data or information and turn it into substantial change. Developing a framework to deal with new information is vital to learning and retaining information for future usage and application. By starting with knowledge, you capture every piece of information that comes in the door to convert it into something of greater value. Turning it into principle provides long term learning that can be applied elsewhere. Action makes it all worth it. A simple example of gaining knowledge, turning that into principle and then moving forward with action:
Let's say you run a company that manufactures and sells pens. Your company as of right now only offers one type of pen: a black ballpoint pen, and you are trying to sell this one pen to your friends, family, and other companies.
Knowledge: As you're out in the would being a salesman for your pen, you keep hearing that people wish they could buy a pen just like it, but that had red ink. This is new knowledge: there is a proven demand for a red pen. Alone, this knowledge isn't worth very much. You won't sell more pens simply by knowing this fact.
Principle: Knowing that people want red pens is not learning in itself, and that's what principle is all about. What does this mean for your business? If people want red pens, it means that there is untapped demand that you can fulfill, and thus that you should produce a product to fit this market of people who want the product. That's a small but important principle, extracted from the simple data that you discovered in your sales process.
Action: All of this is useless still unless you take action. If producing red pens will increase sales and fits your vision, then do it. As simple as it may seem while you read it here, there are plenty of examples in our lives that we have all of the knowledge and principle that we need, and completely refuse to act on it. Refusing to take action and tell somebody how we feel, refusing to get rid of distractions, refusing to act on our intuition that tells us to leave a bad situation: it's constant, and it's detrimental.
Three words, and they're not even (that) hard to spell: Knowledge, principle, action.