Tuesday, May 24, 2005
The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation
The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation
© 1995 by Ikujiro Nonaka, Hirotaka Takeuchi
Human knowledge is two kinds: explicit knowledge and tacit knowledge. Tacit knowledge is personal knowledge embedded in individual experience and involves intangible factors such as personal belief, perspective, and value system.
Organizational knowledge creation takes place at individual, group and organizational levels.
Japanese companies excel at bringing about innovation continuously, incrementally, and spirally. Knowledge is the ultimate replacement of all other resources.
Tacit knowledge is highly personal, hard to formalize, subjective insights, intuition, hunches. For tacit knowledge to be shared, it has to be converted into words or numbers that anyone can understand. This is the transformation from tacit to explicit.
Having an insight or hunch that is highly personal is of little value to the company unless the individual can convert it into explicit knowledge, thus allowing it to be shared with others in the company.
Senior managers provide a sense of direction by creating grand concepts. In Bushido, Inazo Nitobe (1899) pointed out that in samurai education knowledge was acquired when it was integrated into one’s personal character.
Drucker says that organization must be prepared to abandon knowledge that has become obsolete and to create new things through: 1) continuing improvement of every activity; 2) development of new applications from its own successes; and 3) continuous innovation as an organized process.
The key to knowledge creation lies in the mobilization and conversion of tacit knowledge. The key to acquiring tacit knowledge is experience. Honda holds brainstorming camps outside the workplace.
For explicit knowledge to become tacit, it helps if the knowledge is verbalized or diagrammed into documents, manuals, or oral stories. The organization has to mobilize tacit knowledge created and accumulated at the individual level. The mobilized tacit knowledge is organizationally amplified through the knowledge spiral. Socialization and externalization are necessary for linking individual’s tacit and explicit knowledge.
Fluctuation and creative chaos: Fluctuation is different from complete disorder, it is an order whose pattern is hard to predict at the outset. Ryuzaburo Kaku, chairman of Canon, often says ” The role of top management is to give employees a sense of crisis as well as a lofty ideal.” Top management often employs ambiguous visions “strategically equivocal” and intentionally creates a fluctuation within the organization.
Sharing redundant information promotes the sharing of tacit knowledge because individuals can sense what others are trying to articulate.
Five phases: sharing tacit knowledge, creating concepts, justifying concepts, building an archetype, cross-leveling knowledge.
The team was given full autonomy. Requisite variety existed because each person came with their own knowledge base. There was redundancy of information. Creative chaos was introduced after the three divisions were integrated. The concept was the organization “intention” which served to integrate their purpose.
A practitioner is front-line employee and line manager. Knowledge engineer is middle manager and knowledge officers are top managers of the knowledge creating crew. Knowledge operators accumulate and generate rich tacit knowledge in the form of experience-based embodied skills. Knowledge specialists mobilize well-structured explicit knowledge in the form of technical, scientific, and other quantifiable data.
A hypertext organization is suggested. Organization oscillates between bureaucracy and task force. Author suggests combination of both. Bureaucracy is effective in bringing about combination and internalization, while the task force is suitable for socialization and externalization. The former is good for exploitation and accumulation of knowledge while latter for sharing and creation of knowledge.
In matrix organization, you report to two functions at once. In hypertext, you report to only one function at a time - the project team during the project period and the business system during “normal times.” The key characteristic of a hypertext organization is the ability of its members to shift contexts, moving easily in and out of one context into another.
Knowledge moves in a spiral when creating organizational knowledge. Seven guidelines: create a knowledge vision, develop a knowledge crew, build a high-density field of interaction at the front line, piggyback on the new product development process, adopt a middle-up down management, switch to a hypertext organization, and construct a knowledge network with the outside world.
Middle up down management leaves top management to articulate the vision or dream for the company, while front-line employees down in the trenches look at reality.
Japanese companies have taught us that innovation can be achieved by continuously creating new knowledge, disseminating it widely through the organization, and embodying it quickly in new technologies, products, and systems.
Amazon: http://www.amazon.com/exec/obidos/ASIN/0195092694
© 1995 by Ikujiro Nonaka, Hirotaka Takeuchi
Human knowledge is two kinds: explicit knowledge and tacit knowledge. Tacit knowledge is personal knowledge embedded in individual experience and involves intangible factors such as personal belief, perspective, and value system.
Organizational knowledge creation takes place at individual, group and organizational levels.
Japanese companies excel at bringing about innovation continuously, incrementally, and spirally. Knowledge is the ultimate replacement of all other resources.
Tacit knowledge is highly personal, hard to formalize, subjective insights, intuition, hunches. For tacit knowledge to be shared, it has to be converted into words or numbers that anyone can understand. This is the transformation from tacit to explicit.
Having an insight or hunch that is highly personal is of little value to the company unless the individual can convert it into explicit knowledge, thus allowing it to be shared with others in the company.
Senior managers provide a sense of direction by creating grand concepts. In Bushido, Inazo Nitobe (1899) pointed out that in samurai education knowledge was acquired when it was integrated into one’s personal character.
Drucker says that organization must be prepared to abandon knowledge that has become obsolete and to create new things through: 1) continuing improvement of every activity; 2) development of new applications from its own successes; and 3) continuous innovation as an organized process.
The key to knowledge creation lies in the mobilization and conversion of tacit knowledge. The key to acquiring tacit knowledge is experience. Honda holds brainstorming camps outside the workplace.
For explicit knowledge to become tacit, it helps if the knowledge is verbalized or diagrammed into documents, manuals, or oral stories. The organization has to mobilize tacit knowledge created and accumulated at the individual level. The mobilized tacit knowledge is organizationally amplified through the knowledge spiral. Socialization and externalization are necessary for linking individual’s tacit and explicit knowledge.
Fluctuation and creative chaos: Fluctuation is different from complete disorder, it is an order whose pattern is hard to predict at the outset. Ryuzaburo Kaku, chairman of Canon, often says ” The role of top management is to give employees a sense of crisis as well as a lofty ideal.” Top management often employs ambiguous visions “strategically equivocal” and intentionally creates a fluctuation within the organization.
Sharing redundant information promotes the sharing of tacit knowledge because individuals can sense what others are trying to articulate.
Five phases: sharing tacit knowledge, creating concepts, justifying concepts, building an archetype, cross-leveling knowledge.
The team was given full autonomy. Requisite variety existed because each person came with their own knowledge base. There was redundancy of information. Creative chaos was introduced after the three divisions were integrated. The concept was the organization “intention” which served to integrate their purpose.
A practitioner is front-line employee and line manager. Knowledge engineer is middle manager and knowledge officers are top managers of the knowledge creating crew. Knowledge operators accumulate and generate rich tacit knowledge in the form of experience-based embodied skills. Knowledge specialists mobilize well-structured explicit knowledge in the form of technical, scientific, and other quantifiable data.
A hypertext organization is suggested. Organization oscillates between bureaucracy and task force. Author suggests combination of both. Bureaucracy is effective in bringing about combination and internalization, while the task force is suitable for socialization and externalization. The former is good for exploitation and accumulation of knowledge while latter for sharing and creation of knowledge.
In matrix organization, you report to two functions at once. In hypertext, you report to only one function at a time - the project team during the project period and the business system during “normal times.” The key characteristic of a hypertext organization is the ability of its members to shift contexts, moving easily in and out of one context into another.
Knowledge moves in a spiral when creating organizational knowledge. Seven guidelines: create a knowledge vision, develop a knowledge crew, build a high-density field of interaction at the front line, piggyback on the new product development process, adopt a middle-up down management, switch to a hypertext organization, and construct a knowledge network with the outside world.
Middle up down management leaves top management to articulate the vision or dream for the company, while front-line employees down in the trenches look at reality.
Japanese companies have taught us that innovation can be achieved by continuously creating new knowledge, disseminating it widely through the organization, and embodying it quickly in new technologies, products, and systems.
Amazon: http://www.amazon.com/exec/obidos/ASIN/0195092694
