WISDOMSOURCE NEWS

Vol. 2, No. 8
Monday, April 4, 2005

WisdomSource Book Club Review - Enabling Knowledge Creation: How to Unlock the Mystery of Tacit Knowledge and Release the Power of Innovation[1]

Enabling Knowledge Creation by Georg Von Krogh, Kazuo Ichijo and Ikujiro Nonaka is the sequel to the groundbreaking 1995 masterpiece, The Knowledge-Creating Company[2], hailed as the landmark text that defined the field of knowledge management and revealed the secrets of the Japanese multinational organizations. In this edition of WisdomSource News we explore some of the concepts of advanced knowledge management in terms of knowledge creation and how it applies to your organization’s ability to engage in innovation. We discuss the roadblocks to knowledge creation in organizational knowledge management initiatives and the means to get around these barriers to achieve new levels of innovation.

Since the publication of The Knowledge-Creating Company, most Fortune 500 and government agencies worldwide have a knowledge management initiative of some type as a goal or directive in-process. Enabling Knowledge Creation breaks further ground and reveals the leading-edge business and innovation concepts that are being used today by the World’s largest conglomerates to ride the leading edge of change and to bring to life the products that define the technological age of today and tomorrow.

Enabling Knowledge Creation describes the operating ideologies and strategies of large knowledge-centric multinationals such as Sony, Toshiba, Ayura, Siemens AG, Unilever, Skandia, Gemini Consulting, Maekawa Seisakujo, General Electric Japan, Boston Consulting Group, Adtrantz, and Phonak. The book describes the way these organizations continually juxtapose seemingly opposite concepts to derive new operating paradigms and innovative products & services that are in harmony with the propitiousness of the times. Also described is the flexibility ingrained by the management teams of these organizations in terms of their ability to adapt to changes in market and operating conditions.

WHAT'S WRONG WITH KNOWLEDGE MANAGEMENT

Many organizations attempting knowledge management initiatives have struggled to achieve the desired results. The book clearly lays out the traps that befall organizations in their quest to become true knowledge-creating companies:

• Pitfall I: Knowledge Management relies on easily detectable, quantifiable information.
• Pitfall II: Knowledge Management is devoted to the manufacture of tools.
• Pitfall III: Knowledge Management depends on a Knowledge Officer.

HOW KNOWLEDGE ENABLING AVOIDS THE PITFALLS: THREE PREMISES

Knowledge enabling avoids the pitfalls experienced in attempting to manage knowledge through the acceptance of the following basic premises as described in the book:

• Premise I: Knowledge is justified true belief, individual and social, tacit and explicit.
• Premise II: Knowledge depends on your perspective.
• Premise III: Knowledge creation depends on a Knowledge Officer.

Microcommunities of Knowledge

Never doubt the power of a small group of committed individuals to change the world. It is the only thing that ever has. - Margaret Mead

The development of microcommunities as catalysts for new product development and organizational change is paramount to success in innovation. Teams of 5-7 people are optimal for new knowledge to emerge through socialization and the melding of the representation from the necessary functional areas. The number of interfaces between individuals increases rapidly as the team size increases (=n[n-1]/2)[3]; henceforth, a team of 5-7 people has 15-21 interfaces between individuals and is manageable mentally by each person without becoming too complex in terms of points of coordination. A community of this size balances the objective of a compact team with the need to obtain representation from the functional areas that contribute to the design of products and processes with competitive factors in mind.

Knowledge and Ba

Central to the understanding of knowledge management is the definition of knowledge as justified true belief. So it follows that in order for knowledge to exist, there must be an existing set of circumstances, viewpoints, cosmologies, and/or belief systems that comprise the context for the justification of belief.

Knowledge creation depends upon this enabling context as a combination of physical, virtual, and mental spaces. The Japanese word for this concept (“place”) is ba. The goal in the creation of knowledge is to create the necessary context or knowledge space for knowledge to emerge. Knowledge depends upon ba (context) to be considered something other than data & information. Knowledge is the application of data and information to situations, processes, people, etc.

WisdomSource The Ultimate Ba

Bringing WisdomSource into your organization is transformation in and of itself. WisdomSource gives your organization a place (ba) where knowledge can exist in context to your organization’s human resources, processes, systems, products, services, organizational structures, fixed assets, facilities, finances and the like. It affords your organization’s microcommunities the ability to interconnect with each other and the rest of your enterprise.

WisdomSource is not just a way to deliver knowledge & information out; it puts in place a mechanism to deliver, collect, optimize & apply changes to the knowledge base, allowing for innovation to occur on individual, microcommunity, and organizational levels.

Tacit and Explicit Knowledge

Knowledge that can be communicated exoterically, i.e. on paper and drawings or through speech, is deemed explicit knowledge. Tacit knowledge or esoteric knowledge can only be transferred through experience and direct relationship with the knowledge holder.

The Five Knowledge Creation Steps

The book describes five steps to organizational knowledge creation:

1. Sharing tacit knowledge
2. Creating concepts
3. Justifying concepts
4. Building a prototype
5. Cross-leveling knowledge

The Five Knowledge Enablers

Facilitating these five steps are the five knowledge enablers:

1. Instill a knowledge vision
2. Manage conversations
3. Mobilize knowledge activists
4. Create the right context
5. Globalize local knowledge

Knowledge Enabling: The Interaction of the Five Knowledge Creation Steps with the Five Knowledge Enablers

As bold of a statement as this may be, the degree to which the principles described in the book are taking place will determine the success or failure of your organization over the long-term. With globalization and the rise of open-market competition, your plan for success must take into consideration the factors which enable innovation and true knowledge creation to occur.

The following figure details the interactions described in the book; and describes the (1) Knowledge-Creation Steps and their interaction with (2) Knowledge Enablers. Your deliberate plan to understand these enablers and steps will determine the extent to which your organization is able to capitalize on changing business and operating conditions.

These steps and enablers of knowledge creation apply not only to corporations, who need to generate profits, but also to governments who must react to shifting human, capital, and social demographics in order to create prosperity and peace of mind from the threat of terrorism.

The Three Steps to Organizational Development in Knowledge Creation

The authors describe organizational knowledge creation as occurring over the following three phases, which are not necessarily sequential:

Phase I: Risk Minimization

In the minimization of risk, focus is on capturing and locating organizational knowledge using the following enabling tools:

• Data warehousing
• Datamining
• Yellow pages
• IC-Navigator
• Balanced scorecard
• Knowledge audits
• IC-Index
• Business information systems
• Rule-based systems

Note: In the minimization of risk, knowledge is still viewed as a resource that needs to be collected and managed.

Phase II: Increased Organizational Effectiveness & Efficiency

In the quest for increased efficiency and organizational effectiveness, the focus is on transferring and sharing knowledge by using the following enabling tools:

• Internet
• Intranets
• Lotus Notes/Groupware
• Networked organization
• Knowledge workshops
• Knowledge workbench
• Best practice transfer (areas of excellence)
• Benchmarking
• Knowledge-gap analysis
• Knowledge sharing culture
• Technology transfer units
• Knowledge transfer units
• Systems thinking

Phase III: Increased Ability to Innovate

In the quest for real innovation knowledge creation is enabled through the embrace of the following:

• Instill a knowledge vision
• Managing conversations
• Mobilize knowledge activists
• Create the right context
• Globalize local knowledge
• Professional innovation networks
• New organizational forms
• New HRM-systems
• New corporate values
• Project management systems
• Corporate universities
• Communities Storyboards

WisdomSource as Your Phased Approach to Innovation

WisdomSource has been working for the past decade on model software that serves as the context (ba) for the creation of knowledge in your organization. In addition, we have developed a phased approach to the process of creating knowledge in organizations of all types.

If your knowledge creation initiative is going to really succeed; it will not be enough just to deliver knowledge & processes out to organizations & individuals. Knowledge, processes & information will need to be live and interactive, especially when it comes to unlocking the mystery of tacit knowledge and releasing the power of innovation. WisdomSource empowers your organization to be the world's leader in your business and it empowers you to become the next leader of your organization.

Choose WisdomSource and Get to the Next Level

WisdomSource v3.0 empowers you to understand your organization and to be able to gradually change over time so as to always be in harmony with the demands of the time. Our software provides a gradual path to organizational self-actualization that enables your resources to share their valuable lessons-learned and to benefit from the wisdom of your best people so that you can take things to the next level and ensure your future.

WisdomSource enables your organization to harness change and to maintain a balance with change by capturing the changes that are taking place right now in your business and applying them to your products, services, and operations across your enterprise.

Contact WisdomSource to Succeed in Transforming Your Organization so that You Can Engage in Real Innovation

WisdomSource v3.0 is the turnkey solution that eliminates the organizational risks that stem from undergoing transformation. Contact us today for a consultation with an experienced change management specialist who will help you to see what needs to be done. There is no charge for consultations. If you would like to discuss the possibilities that a WisdomSource Knowledge Management Solution affords your organization, please Contact WisdomSource. We look forward to hearing from you.

REFERENCES:

1. Von Krogh, Georg, Kazuo, Ichijo, and Nonaka, Ikujiro. 2000. Enabling Knowledge Creation: How to unlock the mystery of tacit knowledge and release the power of innovation. New York: Oxford University Press.
2. Nonaka, I. and H. Takeuchi. 1995. The Knowledge-Creating Company: How Japanese companies create the dynamics of innovation. New York: Oxford University Press.
3. Crow, Kenneth, 1996. Building Effective Product Development Teams / Integrated Product Teams. Palos Verdes: DRM Associates.