Knowledge-Creating Company Analysis and Implications

Knowledge-Creating Company

Analysis and Implications of Concepts from the Knowledge Creating Company by Ikurjiro Nonaka

The most consistently reliable, resilient and valuable competitive strength any company has is the ability to create knowledge and transform it into innovative products and services. In the article, The Knowledge-Creating Company (Nonaka, et.al.) the author provides a series of useful frameworks and constructs anchored in examples from the Japanese manufacturing industry. The most noteworthy is that of the transformation of a home bread-making machine that defied improvement through traditional methods of analysis and conventional product enhancement. Matsushita Electric's development team decided to study how the Osaka International Hotel created their bread, known to be the best in that region of Japan. This example is allegorical to many of the observations and insights the author makes throughout the remainder of the article. Matsushita Electric successfully combined the explicit knowledge of their latest home bread-maker with the tacit knowledge and expertise of the best bakers at the Osaka International Hotel to create one of the best-selling bread-makers the company had even produced. Tacit knowledge is innate and often difficult to capture because it has become engrained in how skilled professionals and organizations deliver value and service customers, while explicit knowledge is captured, structured and easily communicated. The knowledge of the bakers at the Osaka International Hotel is tacit knowledge and learned through experience. The ability of Matsushita to capture that knowledge made a major difference in how the company proceeded with the final development and production of its bread-maker. This combination of explicit and tacit knowledge, so powerful as an innovative force in a company's culture, leads to the development of the SECI (Socialization, Externalization, Internalization, and Combination) Model, specifically the combining of implicit and explicit knowledge (Li, Gao, 6 -- 14). Figure 1 in the appendix provides a graphical representation of the SECI Model.

Enabling Knowledge Creation in Enterprises

Creating knowledge as a core strength of a company requires more than just integrating tacit and explicit knowledge deliberately as the examples shown by Nonaka (et.al.) show. There is also the need for creating a high level of collaboration through redundancy of roles, shared role assignments, and the opportunity for designers, developers, engineers, marketers and managers to attain autonomy in their work, mastery of specific tacit knowledge, and purpose (Stern, 14). The attainment of autonomy, mastery and purpose on the part of key contributors throughout an organization strengthens tacit knowledge capture and the ability to integrate it into projects that were initially based on explicit knowledge. Long-term organizational learning is possible when autonomy, mastery and purpose are engrained into an organization (Stern, 14).

The use of metaphors to combine initially incongruous knowledge elements, both tacit and explicit, into an entirely new concept is illustrated by examples throughout the research Nonaka (167, 168) and from the extensive analysis completed of the Toyota Production System (Dyer, Nobeoka, et.al.). In both the research completed by Nonaka and Dyer, Nobeoka (et.al.) the use of metaphors, allegories and heavy reliance on redundancy throughout supply chain partnerships leads to levels of trust and transparency that make the transfer of tacit knowledge easily transferred to the Toyota supplier partners (Dyer, Nobeoka, 314).

Progressing from metaphor to analogy further galvanizes the connections between explicit and tacit knowledge in a new project, service and product effort (Nonaka, 167). The effects of duplication or redundancy serve to further integrate these two types of knowledge, yet it does much more than that: it transforms trust into an accelerator of shared knowledge throughout an organization. This is especially evident from analyzing how Toyota encourages its suppliers to collaborate with one another, sharing best practices in managing the many aspects of the Toyota order management, order quantity management and supplier management workflows, as all must be completely integrated to before they can fulfill their first order from the auto company (Dyer, Nobeoka, etl.al.). What Toyota is doing by enforcing such a high level of cooperation and collaboration is ensuring that the connections between suppliers at the process and worker level are so strong that tacit and explicit knowledge will flow freely. What Toyota is after is not necessarily pricing performance gains or time-to-market; they are after transforming knowledge into their greatest competitive strength (Dyer, Nobeoka, 301). The greater the level of trust across suppliers, or in a broader context, a network, the greater the knowledge sharing, both tacit and explicit, and realizing this can take time to develop, Toyota places the "fast track" at 1 year (Dyer, Nobeoka, et.al). This is comparable to the timeframes Nonaka mentions (et.al.) of the Matsushita study of software engineer Ikuko Tanaka studying the ways bakers stretched the dough and kneaded it. Tacit knowledge capture takes consistent time and focus commitment.