The Knowledge-Creating Company by Nonaka Ikujiro.;

Author:Nonaka, Ikujiro.; [Nonaka]
Language: eng
Format: epub
ISBN: 9781633691377
Publisher: Lightning Source Inc. (Tier 2)
Published: 2008-12-07T16:00:00+00:00

FROM CHAOS TO CONCEPT: MANAGING THE KNOWLEDGE-CREATING COMPANY

Understanding knowledge creation as a process of making tacit knowledge explicit—a matter of metaphors, analogies, and models— has direct implications for how a company designs its organization and defines managerial roles and responsibilities within it. This is the “how” of the knowledge-creating company, the structures and practices that translate a company’s vision into innovative technologies and products.

The fundamental principle of organizational design at the Japanese companies I have studied is redundancy—the conscious overlapping of company information, business activities, and managerial responsibilities. To Western managers, the term “redundancy,” with its connotations of unnecessary duplication and waste, may sound unappealing. And yet, building a redundant organization is the first step in managing the knowledge-creating company. Managers must challenge employees to reexamine what they take for granted.

Redundancy is important because it encourages frequent dialogue and communication. This helps create a “common cognitive ground” among employees and thus facilitates the transfer of tacit knowledge. Since members of the organization share overlapping information, they can sense what others are struggling to articulate. Redundancy also spreads new explicit knowledge through the organization so it can be internalized by employees.

The organizational logic of redundancy helps explain why Japanese companies manage product development as an overlapping process where different functional divisions work together in a shared division of labor. At Canon, redundant product development goes one step further. The company organizes product-development teams according to “the principle of internal competition.” A team is divided into competing groups that develop different approaches to the same project and then argue over the advantages and disadvantages of their proposals. This encourages the team to look at a project from a variety of perspectives. Under the guidance of a team leader, the team eventually develops a common understanding of the “best” approach.

In one sense, such internal competition is wasteful. Why have two or more groups of employees pursuing the same product-development project? But when responsibilities are shared, information proliferates, and the organization’s ability to create and implement concepts is accelerated.

At Canon, for example, inventing the mini-copier’s low-cost disposable drum resulted in new technologies that facilitated miniaturization, weight reduction, and automated assembly. These technologies were then quickly applied to other office automation products such as microfilm readers, laser printers, word processors, and typewriters. This was an important factor in diversifying Canon from cameras to office automation and in securing a competitive edge in the laser printer industry. By 1987— only five years after the mini-copier was introduced—a full 74% of Canon’s revenues came from its business machines division.

Another way to build redundancy is through strategic rotation, especially between different areas of technology and between functions such as R&D and marketing. Rotation helps employees understand the business from a multiplicity of perspectives. This makes organizational knowledge more “fluid” and easier to put into practice. At Kao Corporation, a leading Japanese consumer-products manufacturer, researchers often “retire” from the R&D department by the age of 40 in order to transfer to other departments such as marketing, sales, or production. And all employees are expected to hold at least three different jobs in any given ten-year period.

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