The Knowledge Creating Company - Nonaka & Takeuchi

Topics: Knowledge management, Knowledge, Matsushita Pages: 6 (2095 words) Published: April 25, 2013
In an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge. When markets shift, technologies proliferate, competitors multiply, and products become obsolete almost overnight, successful companies are those that consistently create new knowledge, disseminate it widely throughout the organization, and quickly embody it in new technologies and products. These activities define the “knowledge-creating” company, whose sole business is continuous innovation. To Western managers, the Japanese approach often seems odd or even incomprehensible. Consider the following examples. - How is the slogan “Theory of Automobile Evolution” a meaningful design concept for a new car? And yet, this phrase led to the creation of the Honda City, Honda’s innovative urban car. - Why is a beer can a useful analogy for a personal copier? Just such an analogy caused a fundamental breakthrough in the design of Canon’s revolutionary mini-copier, a product that created the personal copier market and has led Canon’s successful migration from its stagnating camera business to the more lucrative field of office automation. - What possible concrete sense of direction can a made-up word such as “optoelectronics” provide a company’s product-development engineers? Under this rubric, however, Sharp has developed a reputation for creating “first products” that define new technologies and markets, making Sharp a major player in businesses ranging from color televisions to liquid crystal displays to customized integrated circuits. In each of these cases, cryptic slogans that to a Western manager sound just plain silly—appropriate for an advertising campaign perhaps but certainly not for running a company—are in fact highly effective tools for creating new knowledge. Managers everywhere recognize the serendipitous quality of innovation. Executives at these Japanese companies are managing that serendipity to the benefit of the company, its employees, and its customers. The centerpiece of the Japanese approach is the recognition that creating new knowledge is not simply a matter of “processing” objective information. Rather, it depends on tapping the tacit and often highly subjective insights, intuitions, and hunches of individual employees and making those insights available for testing and use by the company as a whole. The key to this process is personal commitment, the employees’ sense of identity with the enterprise and its mission. Mobilizing that commitment and embodying tacit knowledge in actual technologies and products require managers who are as comfortable with images and symbols—slogans such as Theory of Automobile Evolution, analogies like that between a personal copier and a beer can, metaphors such as “optoelectronics”—as they are with hard numbers measuring market share, productivity, or ROI. The more holistic approach to knowledge at many Japanese companies is also founded on another fundamental insight. A company is not a machine but a living organism. Much like an individual, it can have a collective sense of identity and fundamental purpose. This is the organizational equivalent of selfknowledge— a shared understanding of what the company stands for, where it is going, what kind of world it wants to live in, and, most important, how to make that world a reality. In this respect, the knowledge-creating company is as much about ideals as it is about ideas. And that fact fuels innovation. The essence of innovation is to re-create the world according to a particular vision or ideal. To create new knowledge means quite literally to re-create the company and everyone in it in a nonstop process of personal and organizational selfrenewal. In the knowledge-creating company, inventing new knowledge is not a specialized activity—the province of the R&D department or marketing or strategic planning. It is a way of behaving, indeed a way of being, in which everyone is a knowledge worker—that is to...
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