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13 การสร้างและออกแบบ learning
Organization/กระบวนการเรียนรู้  	

organization @TC 2013
หัวข้อบรรยาย/กรณีศึกษา
11 Organizing for Innovation
C 8: Harvard Business Case / 3M Optical Systems : Managing Corporate Entrepreneurship
12 การสร้างและออกแบบ Cybernetics, Viable System
C 9 : Harvard Business Case / Sun Hydraulics Corporation (A&B)
13 การสร้างและออกแบบ learning Organization/กระบวนการเรียนรู้
C 10 : Harvard Business Case / McKinsey & Company : Managing Knowledge and Learning

14 Control system
C11: Harvard Business Case / Verizon
15 สรุปปิดการบรรยาย or guest speaker

organization @TC 2013
Why Knowledge?

• 

•  “Knowledge is the only meaningful resource today.”
Peter Drucker (1993)

•  Knowledge is one of the most important assets
•  of an organization for creating value and, hence,
•  maintaining sustainable competitive advantage.

© Nonaka・Toyama・Konno	

organization @TC 2013
Characteristics of Knowledge

– 1. Increasing Return
– 2. Unlimited Usage
– 3. Unseparated Production and Consumption
– 4. Difficulties in Market Transaction
– 5. New Value by Re-categorization
– 6. Quickly Outdated
– 7. Created by Human Beings
•                  	
© Nonaka・Toyama・Konno	

organization @TC 2013
Simon’s Metaphor: A Man is an Ant
- Bounded Rationality or Cognitive Limits Direction to Home

A man, viewed as a behaving system, is quite simple. The
apparent complexity of his behavior over time is largely a
reflection of the complexity of the environment in which he
finds himself.
Simon, H.A.(1982) The Sciences of the Artificial.
© Nonaka・Toyama・Konno	

organization @TC 2013
Two Types of Knowledge

	
	
	
Tacit Knowledge
	
Subjective and experiential
knowledge that can not
be expressed in words,
sentences, numbers, or
Formulas (Context-specific)
Cognitive Skills
beliefs
images
perspectives
mental models

Technical Skills
craft
know-how

	
© Nonaka・Toyama・Konno	

	
	
Objective and rational
knowledge that can be
expressed in words, sentences,
numbers, or formulas (contextfree)
Explicit Knowledge

Theoretical approach
Problem solving
Manuals
Database
	

Dynamic Interaction
Analog-Digital Synthesis
organization @TC 2013
Tacit and Explicit Knowledge
“The strength of Japanese manufacturing industries are at the
technologies (based on) tacit knowledge. With the progress in
Information Technology (IT), tacit knowledge is converted into
explicit knowledge. Still, we need tacit knowledge. To build a car,
we have to build people.”
-Hiroshi Okuda, the chairman of Toyota
Without a firm-specific high quality tacit knowledge, a firm cannot survive just by combining explicit knowledge
through outsourcing. A company needs to recognize a dispersed tacit knowledge embedded in people, synthesize
tacit and explicit knowledge, and incorporate knowledge into key organizational activities for continuous
innovation.

organization @TC 2013
Reality has Duality - Subjectivity and Objectivity-	
Tacit	
Insider sensitivity
Life world
Commitment
Here and now
Phenomenologist
Existentialist

Explicit	
Outsider objectivity
Factual world
Detachment
There and then
Positivist
Spectator
organization @TC 2013
SECI Process
Tacit

Sharing and creating
tacit knowledge through
direct experience

Socialization	

Taci
t
Tacit

Explic
it

© Nonaka・Toyama・Konno	

I

Explic
it

9. embodying explicit
knowledge through
action and reflection
10. Using simulation and
experiments

Externalization

Articulating tacit
knowledge through
dialogue and reflection

4. articulating tacit
Environment
E
O
knowledge using
I
I
symbolic language
Group
Individual
I
5. translating tacit
I
I
knowledge into a
I
concept or prototype
Systemizing and
applying explicit
Internalization
Combination
knowledge and
information
E
G
O
6. gathering and
G
integrating explicit
G Org. G
I
knowledge
G
E
7. Breaking down the
concept and finding
relationship among
Explicit
Explicit
concepts
8. editing and
organization @TC 2013 	
 explicit
I = Individual, G = Group, O = Organization, E = Environment
systemizing

1.Perceiving the reality
as it is
2. Sensing and Empathizing
with
others and the
environment
3. Transferring of
tacit knowledge
Learning and acquiring
new tacit knowledge in
practice

Tacit
Basic Components of
Knowledge-creating Organization
Environment

Vision

(Ecosystem)	

(What?)	

Ta

it
jectiv
b
e (Su
g
owled
cit Kn

y)

Driving
Objectives

Dialogue
(Why?)	

Ba

Practice
(How?)	

(Shared Context)	

ledge
w
it Kno
c
Expli

it
jectiv
(Ob

y)

Knowledge Assets
© Nonaka・Toyama・Konno	

organization @TC 2013
Knowledge Vision	
Knowledge Vision
–  - Essential Questioning: “What do we exist for?”
–  “Where should we live?” (Existence and Domain)
–  “Why do we create knowledge?”
–  A vision that transcends the existing boundary. A vision that can be
accepted by and can inspire the people with various contexts.
–  -Gives the firm an absolute, not a relative, value system.
–  “You do it because you want to do it, not because
–  everyone else is doing it.”
–  -A long-time view that goes beyond the arena of
–  competition. It is not a short-time view on efficiency in
–  knowledge utilization.	
© Nonaka・Toyama・Konno	

organization @TC 2013
Why do we create knowledge?:
A story of Honda	
•  Honda was trying to develop the CVCC engine, which had lower
emission and higher fuel efficiency. Souichiro Honda, the founder and
then CEO of Honda one day told his engineers that the engine would
finally give Honda the opportunity to beat Big 3.
•  The engineers looked at Mr. Honda, and said, “Please, don’t say such
a thing. We are not doing this to beat other guys. We are doing this for
our children.”
•  Mr. Honda was ashamed of himself, and said that he realized that he
had become too old, and decided to retire. 	

© Nonaka・Toyama・Konno	

organization @TC 2013
Driving Objective

• It is a concept, goal, or codes of conduct to synchronize
vision, dialogue, and practice. By pursuing it relentlessly,
contradictions are created and synthesized to create
high quality of knowledge.
• Seven-Eleven Japan: Cut opportunity losses
• Eisai: Knowledge Creation
• Canon: Cash Flow
• Suzuki: 1cc=1000 Yen

© Nonaka・Toyama・Konno	

organization @TC 2013
Dialogue

- Dialectic in Thought -	

• 1. Dialectic

– Truth is dynamic and is developed through the dynamic process of thesis,
antithesis and synthesis.

• 2. Existential Context

– A theme is created by sharing deep thoughts and beliefs.

• 3. Nature of Time, Continuity and Contents

– It is not about whether it exists or not, it is a question of the process of how
it comes into being. The process productively examines the contents rather
than form through denial.
– “Human is mortal. Socrates is a human. Socrates is mortal”
– So what? No new meaning can be created. For example, if one asks,
– ”What does it mean to be mortal?” we might reach a new conclusion,
– “Socrates as a thought is immortal”

• 4. Open Thought

– Beyond the recognition of one’s self-fallibility, conflict with others serves
as a catalyst to reach a higher level of understanding.	

© Nonaka・Toyama・Konno	

organization @TC 2013
Practice - Dialectic in Action 	

Practice as Kata (Creative Routine)
-  Creative Routine: Continuous spiral of tacit and explicit
knowledge until it becomes the second nature.
Kata (form) means “way of doing things.”
-  Kata is the core of ideal action.
-  Good Kata functions as archetype that fosters creative
routine but provides higher freedom.
-  Kata has a high quality feedback function that sharpen
senses and help to notify and modify the differences
between predicted outcomes and reality.
-  Shu 守 (learn), Ha 破 (break), and Ri 離 (create) steps are
critical in continuous self-renewal processes.
© Nonaka・Toyama・Konno	

organization @TC 2013
Ba: Shared Context-in-Motion	
• Knowledge cannot be created without specifying
context (time, space, and relationships); sharing context
including experience, memory, past/history is essential.
• Ba is the inter-subjective space-time where meaning is
created through dialogues and practice.	
It can exist in various spaces such as:
Ø  Physical
- Office, dispersed operating spaces
Ø  Virtual - E-mail, video conference
Ø  Psychological - Shared experience (history), beliefs, ideals
© Nonaka・Toyama・Konno	

organization @TC 2013
Office for Knowledge Creation

meeting

WINDOW

CREATIVE ZONE

FOREST
OF
KNOWLEDGE

OFFICE ZONE

Office Zone

WINDO
W
Meeting
Room

Creative zone
(meeting zone)

 

Smoking
Communication
Coroner

Smoking 
Communication
Zone

Entrance

Forest of
Knowledge

Refresh Corner

© Nonaka・Toyama・Konno	

organization @TC 2013
Ba: Waigaya Meeting

© Nonaka・Toyama・Konno	

organization @TC 2013
Small World Network
SIX DEGREES

We are a happy family
and we all are six degrees
away from an Albanian farmer.

The network of human
social interactions connect
us all by six degrees of
separation.

© Nonaka・Toyama・Konno	

TIPPING POINT

Connected people are
able to get information
and control networks.

I want to be in the middle
of the network because it
provides me information
and power. I can make big
changes by small @TC 2013 	
organization things.
Small World Network: Rewiring the Multilayered Ba
• Through rewiring, far apart ba can be connected to each other to find new
combinations and create new knowledge.

© Nonaka・Toyama・Konno	

organization @TC 2013
Various Ba at Toyota Prius Project

Calty Design Research
(Exterior Design)

2nd & 4th
Electronics Tech Div.
(Inverter)
BR-VF
(Hybrid System)

Zi (G21)
(Planning)

1st Vehicle
Tech Div.
(Suspension)

2nd Engine
Tech Div.
(Engine)
Drive-train
Tech Div.
© Nonaka・Toyama・Konno	
(Hybrid transaxel)

2nd Vehicle
Tech Div.
(Brakes)

EV Development
(Motor, Battery)
Panasonic EV
Energy

organization @TC 2013
Organization as Organic Configuration of Ba	
•  Ba is a concept that synthesizes the hierarchy and the network. The
organization is viewed based on the meaning it creates, not the form it
takes.	
University

Customer

Government

Local
Communities
Supplier

Firm
© Nonaka・Toyama・Konno	

Competitor
organization @TC 2013
Ecosystem

- Characteristics of Knowledge Assets • Knowledge has no boundary. The market is an eco-system of
knowledge, which is composed of various ba inside and
outside of the organization.
• When an organization creates knowledge more efficiently
and effectively than the market, it internalizes knowledgecreating activities.
• The boundary is determined by the ideal image of the
knowledge system, appropriateness of knowledge assets,
justification cost of knowledge, interaction cost, and cocreating or cooperative relationships among stakeholders.

© Nonaka・Toyama・Konno	

organization @TC 2013
Knowledge Asset in Embedded in Discipline/Kata/Way	
Practice of relative values	

Mutual interaction between
relative and absolute values

•  GE
•  What does your global
competitive environment
look like?
•  In the last three years, what
have your competitors
done?
•  In the same period, what
have you done to them?
•  How might they attack you
in the future?
•  What are your plans to
leapfrog over them?

Toyota

•  Honda

even higher goals and
implement continuous
improve- ments without
settling with temporary
success.
n Observe the place of
manufacturing with a clean
slate and without bias, repeat
‘why?’ five times to the
subject.
n Understand one’s own
capability through comparison
internally and externally.

•  3-Gism: Be at the actual place
of work (genba), know the actual
product (genbutsu) and
situation (genjyou), be realistic
(genjitsuteki).
•  Respect sound theory, develop
fresh ideas and make the most
effective use of them.
•  A00 -What do you do this for?
(Ontological)
•  A0 - What is your concept?
(Conceptual)
•  A - What is your specification?
(Operational)

n Set

	

© Nonaka・Toyama・Konno	

Practice of absolute values	

organization @TC 2013
Dynamic Knowledge-based Firms
Environment

Vision

(Ecosystem)	

(What?)	

Ta

it
jectiv
b
e (Su
g
owled
cit Kn

y)

Driving
Objectives

Dialogue
(Why?)	

Ba

Practice
(How?)	

(Shared Context)	

ledge
w
it Kno
c
Expli

it
jectiv
(Ob

y)

Knowledge Assets
© Nonaka・Toyama・Konno	

organization @TC 2013 	
© Nonaka・Toyama・Konno
The Knowledge Leadership is…

• The process to exercise the synthesizing capability of the organization by
integrating the vision, dialogues, practice, ba, and environment.
• At the base of such leadership is phronesis.

© Nonaka・Toyama・Konno	

organization @TC 2013
Aristotle’s Three Types of Knowledge
•  Episteme (Scientific Knowledge)
–  Universal, context-free and objective knowledge (explicit
knowledge)

•  Techne (Skills and Crafts Knowledge)
–  Practical and context-specific technical know-how
–  (tacit knowledge)

•  Phronesis (Practical Wisdom)
–  Experiential knowledge to make context-specific decisions based
on one’s own value/ethics (high quality tacit knowledge)	
© Nonaka・Toyama・Konno	

organization @TC 2013
Phronesis (Prudence, Practical Wisdom)
•  A virtuous habit of making decisions and taking actions that
serve the common good.
•  A capability to find a “right answer” in particular context.
•  Deliberate reasoning and improvisation that comes from the
SECI process, which synthesizes particulars and generals.
•  Can acquire only through high quality direct experiences.

© Nonaka・Toyama・Konno	

organization @TC 2013
Six Abilities to Constitute Phronesis
1. 
2. 
3. 
4. 
5. 
6. 

Ability to make judgment on goodness.
Ability to share contexts with others to create ba/shared
sense.
Ability to grasp the essence of particular situations/things.
Ability to reconstruct the particulars into universals using
language/concepts/narratives.
Ability to skillfully use any necessary means well to realize
concepts for common goodness.
Ability to foster phronesis in others to build resilient
organization.

© Nonaka・Toyama・Konno	

organization @TC 2013
Phronetic Leadership (1)

•   Ability to make a judgment on goodness.

© Nonaka・Toyama・Konno	

organization @TC 2013
Judging What is Good

•  Every sort of expert knowledge and every
•  inquiry, and similarly every action and
•  undertaking, seems to seek some good.
•  Because of that, people are right to affirm
•  that the good is ‘that which all things
•  seek’.
– Aristotle, Nicomachean Ethics
– Example: Self-sufficient values such as happiness.

© Nonaka・Toyama・Konno	

organization @TC 2013
Judging by Philosophy
•  Philosophy is more important than technologies. Such things as money and
technologies are just means to serve people…There is no meaning to a
technology if it does not consider people at the basis of it. What drives a
firm’s growth is philosophy…A true technology is a crystal of philosophy.

• 

© Nonaka・Toyama・Konno	

-Souichiro Honda

organization @TC 2013
Judging by Fundamental Question

•  Our competitors are neither other
companies nor other stores, but our
customers' needs and wants. Our absolute
value is to answer the fundamental
questions of “what does the customer
want?”
•  -Toshifumi Suzuki, CEO, Seven-Eleven Japan

© Nonaka・Toyama・Konno	

organization @TC 2013
Phronetic Leadership (2)

•   Ability to share context with others
to create ba/shared sense.

© Nonaka・Toyama・Konno	

organization @TC 2013
Joking as Context Sharing
• 

Joking is very difficult. You have to grasp the
atmosphere of the occasion and the chance. It exists
only for that particular moment, not anywhere else. The
joke doesn’t work in any other timing…To joke is to
understand human emotions.

• 

© Nonaka・Toyama・Konno	

-Souichiro Honda

organization @TC 2013
Ba: Canon’s Asakai (Daily Morning Meeting)

© Nonaka・Toyama・Konno	

organization @TC 2013
Phronetic Leadership (3)

•  Ability to grasp the essence of
•  particular situations/things.

© Nonaka・Toyama・Konno	

organization @TC 2013
Ground-level Perspective

© Nonaka・Toyama・Konno	

Automotive Hall of Fame

organization @TC 2013
Phronetic Experience

•  When I see a motorcycle, I can see many
things. I should do such and such to
maneuver through the curve. Then I think
about the next machine. I can make the
machine faster if I do such and such…It’s
a natural progress into the next process.
•  Souichiro Honda

© Nonaka・Toyama・Konno	

organization @TC 2013
In Touch with the Reality: Canon’s Mitarai Visiting the Factory

© Nonaka・Toyama・Konno	

organization @TC 2013
See Reality in Dynamic Context

•  It is impossible to apply universal rules derived from
past experiences, since customers’ need keeps
changing and each store is operating in different
context. We are successful only by denying the past and
constantly reflecting on the future to find fundamental
solutions in each particular context.
•  -Toshifumi Suzuki, CEO, Seven-Eleven Japan

© Nonaka・Toyama・Konno	

organization @TC 2013
Phronetic Leadership (4)

•  Ability to reconstruct
•  the particulars into universals using
language/concepts/ narratives.

© Nonaka・Toyama・Konno	

organization @TC 2013
Articulate Particulars Using Symbolic Languages

© Nonaka・Toyama・Konno	

organization @TC 2013 	

Automotive Hall of Fame
Strategy is a Creation of Stories
• 

Strategy is a creation of events. Quantify your
objectives as much as you can. And develop a story to
crystallize the numbers by specifying the beginningmiddle-end story structure.
•  -- Fujio Mitarai, CEO, Canon

© Nonaka・Toyama・Konno	

organization @TC 2013
Hypothesis Building
• 

The concept of opportunity loss from unrealized sales is
invisible and difficult to grasp since it is buried In tacit insights
gained in particular context for each store. Rather than written
manuals, each employee is requested to think and act on his/her
subjective insights into the local market accumulated through
daily face-to-face interactions with customers.

• 

Such subjective insights in particular contexts are objectified
through the process of hypothesis building and testing. It is not
good if you just see a tree, not a forest. Of course you have to
see the particular tree. But you have see to the entire forest as
well as the trees.
•  -Toshifumi Suzuki, CEO, Seven-Eleven Japan

© Nonaka・Toyama・Konno	

organization @TC 2013
Phronetic Leadership (5)

• Ability to skillfully use any necessary
means to realize concepts for common
goodness.

© Nonaka・Toyama・Konno	

organization @TC 2013
Strategy as Dialectic Process
• 

The reality of strategic process is dynamic and full of
confusion and contradictions. In such a process, dialectic
thinking to synthesize contradictions is required. It is a way
to accept contradictions and make the decisions best
suited to the situation without losing the sight of the
goodness to be achieved.

© Nonaka・Toyama・Konno	

organization @TC 2013
Man is a Collection of Contradictory Ideas
Leaders who accept and internalize the contradictory existence of humans and who
can accept purity and impurity are sought after.

• Man is a collection of contradictory ideas, all of which exist within man
without any feelings of uneasiness: beauty & ugliness, justice and
injustice, good and bad, optimism & pessimism, wildness &
intellectualism, diligence & laziness, and idealism & realism. This is
undeniable.
• The human attractiveness of the leader is difficult to articulate but it
seems to lie in the leader’s capability to synthesize these contradictions
through understanding that such a collection of contradictory ideas is
the character of human nature.

© Nonaka・Toyama・Konno	

Source: Iizuka, A. “Jinbutsu o dou miwakeruka,” WEDGE, March 2003	

organization @TC 2013
Embracing Paradoxes

• Paradox is a way of life at Canon….Facing a
paradox, we embrace it and go ahead coping with it.
We are constantly on the move.
• -- Fujio Mitarai, CEO, Canon

• 

© Nonaka・Toyama・Konno	

organization @TC 2013
Phronetic Leadership (6)

•  Ability to foster phronesis in
•  others to build a resilient
•  organization.

© Nonaka・Toyama・Konno	

organization @TC 2013
Building Distributed Leadership
•  I only have two eyes. There are several ten thousands part-time
works at Seven-Eleven Japan stores. If everyone can make a
judgment on his/her own, we have quite a few eyes. To do so,
everyone of us have to respect the fundamental rules of business.
•  No one knows for sure how the society will change in future.
Because we don’t know, we keep tackling the difficult task to adapt
to changes. Everyday, I say that the most important thing is to adapt
to any changes.
• 

© Nonaka・Toyama・Konno	

-Toshifumi Suzuki, CEO, Seven-Eleven Japan

organization @TC 2013
Phronetic Leadership
Goodness

Subjectivity

Explicit knowledge

-

Tacit knowledge

Discipline

Pragmatism

Objectivity
Language

Experience
(particular)	

Life World

(universal)	

Idealism

Ba

Synthesis of Self and Others
(shared context-in-motion)

Dynamic Networking of Ba
© Nonaka・Toyama・Konno	

organization @TC 2013
A Knowledge-Based Organization is…
• An organization who practices the idealistic pragmatism which
synthesizes;

• Ontology: How to be
– -”For what do we live?”: the vision to the future and the commitment to it.

• Epistemology: How to know
– -”What is the truth?”: the SECI spiral which synthesizes objective and
subjective views.

• Creation: How one can change itself and the
environment
• Management is viewed as “a way of life” rather than a tool to
make money.
© Nonaka・Toyama・Konno	

organization @TC 2013
Idealistic Pragmatist
Brain
Deep Thinker

Brawn
Doer

in One Person
“Intellectual Muscle”
© Nonaka・Toyama・Konno	

organization @TC 2013
organization @TC 2013 	

55

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Organization theory and design 13 2013

  • 2. หัวข้อบรรยาย/กรณีศึกษา 11 Organizing for Innovation C 8: Harvard Business Case / 3M Optical Systems : Managing Corporate Entrepreneurship 12 การสร้างและออกแบบ Cybernetics, Viable System C 9 : Harvard Business Case / Sun Hydraulics Corporation (A&B) 13 การสร้างและออกแบบ learning Organization/กระบวนการเรียนรู้ C 10 : Harvard Business Case / McKinsey & Company : Managing Knowledge and Learning 14 Control system C11: Harvard Business Case / Verizon 15 สรุปปิดการบรรยาย or guest speaker organization @TC 2013
  • 3. Why Knowledge? •  •  “Knowledge is the only meaningful resource today.” Peter Drucker (1993) •  Knowledge is one of the most important assets •  of an organization for creating value and, hence, •  maintaining sustainable competitive advantage. © Nonaka・Toyama・Konno organization @TC 2013
  • 4. Characteristics of Knowledge – 1. Increasing Return – 2. Unlimited Usage – 3. Unseparated Production and Consumption – 4. Difficulties in Market Transaction – 5. New Value by Re-categorization – 6. Quickly Outdated – 7. Created by Human Beings •                   © Nonaka・Toyama・Konno organization @TC 2013
  • 5. Simon’s Metaphor: A Man is an Ant - Bounded Rationality or Cognitive Limits Direction to Home A man, viewed as a behaving system, is quite simple. The apparent complexity of his behavior over time is largely a reflection of the complexity of the environment in which he finds himself. Simon, H.A.(1982) The Sciences of the Artificial. © Nonaka・Toyama・Konno organization @TC 2013
  • 6. Two Types of Knowledge Tacit Knowledge Subjective and experiential knowledge that can not be expressed in words, sentences, numbers, or Formulas (Context-specific) Cognitive Skills beliefs images perspectives mental models Technical Skills craft know-how © Nonaka・Toyama・Konno Objective and rational knowledge that can be expressed in words, sentences, numbers, or formulas (contextfree) Explicit Knowledge Theoretical approach Problem solving Manuals Database Dynamic Interaction Analog-Digital Synthesis organization @TC 2013
  • 7. Tacit and Explicit Knowledge “The strength of Japanese manufacturing industries are at the technologies (based on) tacit knowledge. With the progress in Information Technology (IT), tacit knowledge is converted into explicit knowledge. Still, we need tacit knowledge. To build a car, we have to build people.” -Hiroshi Okuda, the chairman of Toyota Without a firm-specific high quality tacit knowledge, a firm cannot survive just by combining explicit knowledge through outsourcing. A company needs to recognize a dispersed tacit knowledge embedded in people, synthesize tacit and explicit knowledge, and incorporate knowledge into key organizational activities for continuous innovation. organization @TC 2013
  • 8. Reality has Duality - Subjectivity and Objectivity- Tacit Insider sensitivity Life world Commitment Here and now Phenomenologist Existentialist Explicit Outsider objectivity Factual world Detachment There and then Positivist Spectator organization @TC 2013
  • 9. SECI Process Tacit Sharing and creating tacit knowledge through direct experience Socialization Taci t Tacit Explic it © Nonaka・Toyama・Konno I Explic it 9. embodying explicit knowledge through action and reflection 10. Using simulation and experiments Externalization Articulating tacit knowledge through dialogue and reflection 4. articulating tacit Environment E O knowledge using I I symbolic language Group Individual I 5. translating tacit I I knowledge into a I concept or prototype Systemizing and applying explicit Internalization Combination knowledge and information E G O 6. gathering and G integrating explicit G Org. G I knowledge G E 7. Breaking down the concept and finding relationship among Explicit Explicit concepts 8. editing and organization @TC 2013 explicit I = Individual, G = Group, O = Organization, E = Environment systemizing 1.Perceiving the reality as it is 2. Sensing and Empathizing with others and the environment 3. Transferring of tacit knowledge Learning and acquiring new tacit knowledge in practice Tacit
  • 10. Basic Components of Knowledge-creating Organization Environment Vision (Ecosystem) (What?) Ta it jectiv b e (Su g owled cit Kn y) Driving Objectives Dialogue (Why?) Ba Practice (How?) (Shared Context) ledge w it Kno c Expli it jectiv (Ob y) Knowledge Assets © Nonaka・Toyama・Konno organization @TC 2013
  • 11. Knowledge Vision Knowledge Vision –  - Essential Questioning: “What do we exist for?” –  “Where should we live?” (Existence and Domain) –  “Why do we create knowledge?” –  A vision that transcends the existing boundary. A vision that can be accepted by and can inspire the people with various contexts. –  -Gives the firm an absolute, not a relative, value system. –  “You do it because you want to do it, not because –  everyone else is doing it.” –  -A long-time view that goes beyond the arena of –  competition. It is not a short-time view on efficiency in –  knowledge utilization. © Nonaka・Toyama・Konno organization @TC 2013
  • 12. Why do we create knowledge?: A story of Honda •  Honda was trying to develop the CVCC engine, which had lower emission and higher fuel efficiency. Souichiro Honda, the founder and then CEO of Honda one day told his engineers that the engine would finally give Honda the opportunity to beat Big 3. •  The engineers looked at Mr. Honda, and said, “Please, don’t say such a thing. We are not doing this to beat other guys. We are doing this for our children.” •  Mr. Honda was ashamed of himself, and said that he realized that he had become too old, and decided to retire. © Nonaka・Toyama・Konno organization @TC 2013
  • 13. Driving Objective • It is a concept, goal, or codes of conduct to synchronize vision, dialogue, and practice. By pursuing it relentlessly, contradictions are created and synthesized to create high quality of knowledge. • Seven-Eleven Japan: Cut opportunity losses • Eisai: Knowledge Creation • Canon: Cash Flow • Suzuki: 1cc=1000 Yen © Nonaka・Toyama・Konno organization @TC 2013
  • 14. Dialogue - Dialectic in Thought - • 1. Dialectic – Truth is dynamic and is developed through the dynamic process of thesis, antithesis and synthesis. • 2. Existential Context – A theme is created by sharing deep thoughts and beliefs. • 3. Nature of Time, Continuity and Contents – It is not about whether it exists or not, it is a question of the process of how it comes into being. The process productively examines the contents rather than form through denial. – “Human is mortal. Socrates is a human. Socrates is mortal” – So what? No new meaning can be created. For example, if one asks, – ”What does it mean to be mortal?” we might reach a new conclusion, – “Socrates as a thought is immortal” • 4. Open Thought – Beyond the recognition of one’s self-fallibility, conflict with others serves as a catalyst to reach a higher level of understanding. © Nonaka・Toyama・Konno organization @TC 2013
  • 15. Practice - Dialectic in Action Practice as Kata (Creative Routine) -  Creative Routine: Continuous spiral of tacit and explicit knowledge until it becomes the second nature. Kata (form) means “way of doing things.” -  Kata is the core of ideal action. -  Good Kata functions as archetype that fosters creative routine but provides higher freedom. -  Kata has a high quality feedback function that sharpen senses and help to notify and modify the differences between predicted outcomes and reality. -  Shu 守 (learn), Ha 破 (break), and Ri 離 (create) steps are critical in continuous self-renewal processes. © Nonaka・Toyama・Konno organization @TC 2013
  • 16. Ba: Shared Context-in-Motion • Knowledge cannot be created without specifying context (time, space, and relationships); sharing context including experience, memory, past/history is essential. • Ba is the inter-subjective space-time where meaning is created through dialogues and practice. It can exist in various spaces such as: Ø  Physical - Office, dispersed operating spaces Ø  Virtual - E-mail, video conference Ø  Psychological - Shared experience (history), beliefs, ideals © Nonaka・Toyama・Konno organization @TC 2013
  • 17. Office for Knowledge Creation meeting WINDOW CREATIVE ZONE FOREST OF KNOWLEDGE OFFICE ZONE Office Zone WINDO W Meeting Room Creative zone (meeting zone)   Smoking Communication Coroner Smoking  Communication Zone Entrance Forest of Knowledge Refresh Corner © Nonaka・Toyama・Konno organization @TC 2013
  • 18. Ba: Waigaya Meeting © Nonaka・Toyama・Konno organization @TC 2013
  • 19. Small World Network SIX DEGREES We are a happy family and we all are six degrees away from an Albanian farmer. The network of human social interactions connect us all by six degrees of separation. © Nonaka・Toyama・Konno TIPPING POINT Connected people are able to get information and control networks. I want to be in the middle of the network because it provides me information and power. I can make big changes by small @TC 2013 organization things.
  • 20. Small World Network: Rewiring the Multilayered Ba • Through rewiring, far apart ba can be connected to each other to find new combinations and create new knowledge. © Nonaka・Toyama・Konno organization @TC 2013
  • 21. Various Ba at Toyota Prius Project Calty Design Research (Exterior Design) 2nd & 4th Electronics Tech Div. (Inverter) BR-VF (Hybrid System) Zi (G21) (Planning) 1st Vehicle Tech Div. (Suspension) 2nd Engine Tech Div. (Engine) Drive-train Tech Div. © Nonaka・Toyama・Konno (Hybrid transaxel) 2nd Vehicle Tech Div. (Brakes) EV Development (Motor, Battery) Panasonic EV Energy organization @TC 2013
  • 22. Organization as Organic Configuration of Ba •  Ba is a concept that synthesizes the hierarchy and the network. The organization is viewed based on the meaning it creates, not the form it takes. University Customer Government Local Communities Supplier Firm © Nonaka・Toyama・Konno Competitor organization @TC 2013
  • 23. Ecosystem - Characteristics of Knowledge Assets • Knowledge has no boundary. The market is an eco-system of knowledge, which is composed of various ba inside and outside of the organization. • When an organization creates knowledge more efficiently and effectively than the market, it internalizes knowledgecreating activities. • The boundary is determined by the ideal image of the knowledge system, appropriateness of knowledge assets, justification cost of knowledge, interaction cost, and cocreating or cooperative relationships among stakeholders. © Nonaka・Toyama・Konno organization @TC 2013
  • 24. Knowledge Asset in Embedded in Discipline/Kata/Way Practice of relative values Mutual interaction between relative and absolute values •  GE •  What does your global competitive environment look like? •  In the last three years, what have your competitors done? •  In the same period, what have you done to them? •  How might they attack you in the future? •  What are your plans to leapfrog over them? Toyota •  Honda even higher goals and implement continuous improve- ments without settling with temporary success. n Observe the place of manufacturing with a clean slate and without bias, repeat ‘why?’ five times to the subject. n Understand one’s own capability through comparison internally and externally. •  3-Gism: Be at the actual place of work (genba), know the actual product (genbutsu) and situation (genjyou), be realistic (genjitsuteki). •  Respect sound theory, develop fresh ideas and make the most effective use of them. •  A00 -What do you do this for? (Ontological) •  A0 - What is your concept? (Conceptual) •  A - What is your specification? (Operational) n Set © Nonaka・Toyama・Konno Practice of absolute values organization @TC 2013
  • 25. Dynamic Knowledge-based Firms Environment Vision (Ecosystem) (What?) Ta it jectiv b e (Su g owled cit Kn y) Driving Objectives Dialogue (Why?) Ba Practice (How?) (Shared Context) ledge w it Kno c Expli it jectiv (Ob y) Knowledge Assets © Nonaka・Toyama・Konno organization @TC 2013 © Nonaka・Toyama・Konno
  • 26. The Knowledge Leadership is… • The process to exercise the synthesizing capability of the organization by integrating the vision, dialogues, practice, ba, and environment. • At the base of such leadership is phronesis. © Nonaka・Toyama・Konno organization @TC 2013
  • 27. Aristotle’s Three Types of Knowledge •  Episteme (Scientific Knowledge) –  Universal, context-free and objective knowledge (explicit knowledge) •  Techne (Skills and Crafts Knowledge) –  Practical and context-specific technical know-how –  (tacit knowledge) •  Phronesis (Practical Wisdom) –  Experiential knowledge to make context-specific decisions based on one’s own value/ethics (high quality tacit knowledge) © Nonaka・Toyama・Konno organization @TC 2013
  • 28. Phronesis (Prudence, Practical Wisdom) •  A virtuous habit of making decisions and taking actions that serve the common good. •  A capability to find a “right answer” in particular context. •  Deliberate reasoning and improvisation that comes from the SECI process, which synthesizes particulars and generals. •  Can acquire only through high quality direct experiences. © Nonaka・Toyama・Konno organization @TC 2013
  • 29. Six Abilities to Constitute Phronesis 1.  2.  3.  4.  5.  6.  Ability to make judgment on goodness. Ability to share contexts with others to create ba/shared sense. Ability to grasp the essence of particular situations/things. Ability to reconstruct the particulars into universals using language/concepts/narratives. Ability to skillfully use any necessary means well to realize concepts for common goodness. Ability to foster phronesis in others to build resilient organization. © Nonaka・Toyama・Konno organization @TC 2013
  • 30. Phronetic Leadership (1) •   Ability to make a judgment on goodness. © Nonaka・Toyama・Konno organization @TC 2013
  • 31. Judging What is Good •  Every sort of expert knowledge and every •  inquiry, and similarly every action and •  undertaking, seems to seek some good. •  Because of that, people are right to affirm •  that the good is ‘that which all things •  seek’. – Aristotle, Nicomachean Ethics – Example: Self-sufficient values such as happiness. © Nonaka・Toyama・Konno organization @TC 2013
  • 32. Judging by Philosophy •  Philosophy is more important than technologies. Such things as money and technologies are just means to serve people…There is no meaning to a technology if it does not consider people at the basis of it. What drives a firm’s growth is philosophy…A true technology is a crystal of philosophy. •  © Nonaka・Toyama・Konno -Souichiro Honda organization @TC 2013
  • 33. Judging by Fundamental Question •  Our competitors are neither other companies nor other stores, but our customers' needs and wants. Our absolute value is to answer the fundamental questions of “what does the customer want?” •  -Toshifumi Suzuki, CEO, Seven-Eleven Japan © Nonaka・Toyama・Konno organization @TC 2013
  • 34. Phronetic Leadership (2) •   Ability to share context with others to create ba/shared sense. © Nonaka・Toyama・Konno organization @TC 2013
  • 35. Joking as Context Sharing •  Joking is very difficult. You have to grasp the atmosphere of the occasion and the chance. It exists only for that particular moment, not anywhere else. The joke doesn’t work in any other timing…To joke is to understand human emotions. •  © Nonaka・Toyama・Konno -Souichiro Honda organization @TC 2013
  • 36. Ba: Canon’s Asakai (Daily Morning Meeting) © Nonaka・Toyama・Konno organization @TC 2013
  • 37. Phronetic Leadership (3) •  Ability to grasp the essence of •  particular situations/things. © Nonaka・Toyama・Konno organization @TC 2013
  • 39. Phronetic Experience •  When I see a motorcycle, I can see many things. I should do such and such to maneuver through the curve. Then I think about the next machine. I can make the machine faster if I do such and such…It’s a natural progress into the next process. •  Souichiro Honda © Nonaka・Toyama・Konno organization @TC 2013
  • 40. In Touch with the Reality: Canon’s Mitarai Visiting the Factory © Nonaka・Toyama・Konno organization @TC 2013
  • 41. See Reality in Dynamic Context •  It is impossible to apply universal rules derived from past experiences, since customers’ need keeps changing and each store is operating in different context. We are successful only by denying the past and constantly reflecting on the future to find fundamental solutions in each particular context. •  -Toshifumi Suzuki, CEO, Seven-Eleven Japan © Nonaka・Toyama・Konno organization @TC 2013
  • 42. Phronetic Leadership (4) •  Ability to reconstruct •  the particulars into universals using language/concepts/ narratives. © Nonaka・Toyama・Konno organization @TC 2013
  • 43. Articulate Particulars Using Symbolic Languages © Nonaka・Toyama・Konno organization @TC 2013 Automotive Hall of Fame
  • 44. Strategy is a Creation of Stories •  Strategy is a creation of events. Quantify your objectives as much as you can. And develop a story to crystallize the numbers by specifying the beginningmiddle-end story structure. •  -- Fujio Mitarai, CEO, Canon © Nonaka・Toyama・Konno organization @TC 2013
  • 45. Hypothesis Building •  The concept of opportunity loss from unrealized sales is invisible and difficult to grasp since it is buried In tacit insights gained in particular context for each store. Rather than written manuals, each employee is requested to think and act on his/her subjective insights into the local market accumulated through daily face-to-face interactions with customers. •  Such subjective insights in particular contexts are objectified through the process of hypothesis building and testing. It is not good if you just see a tree, not a forest. Of course you have to see the particular tree. But you have see to the entire forest as well as the trees. •  -Toshifumi Suzuki, CEO, Seven-Eleven Japan © Nonaka・Toyama・Konno organization @TC 2013
  • 46. Phronetic Leadership (5) • Ability to skillfully use any necessary means to realize concepts for common goodness. © Nonaka・Toyama・Konno organization @TC 2013
  • 47. Strategy as Dialectic Process •  The reality of strategic process is dynamic and full of confusion and contradictions. In such a process, dialectic thinking to synthesize contradictions is required. It is a way to accept contradictions and make the decisions best suited to the situation without losing the sight of the goodness to be achieved. © Nonaka・Toyama・Konno organization @TC 2013
  • 48. Man is a Collection of Contradictory Ideas Leaders who accept and internalize the contradictory existence of humans and who can accept purity and impurity are sought after. • Man is a collection of contradictory ideas, all of which exist within man without any feelings of uneasiness: beauty & ugliness, justice and injustice, good and bad, optimism & pessimism, wildness & intellectualism, diligence & laziness, and idealism & realism. This is undeniable. • The human attractiveness of the leader is difficult to articulate but it seems to lie in the leader’s capability to synthesize these contradictions through understanding that such a collection of contradictory ideas is the character of human nature. © Nonaka・Toyama・Konno Source: Iizuka, A. “Jinbutsu o dou miwakeruka,” WEDGE, March 2003 organization @TC 2013
  • 49. Embracing Paradoxes • Paradox is a way of life at Canon….Facing a paradox, we embrace it and go ahead coping with it. We are constantly on the move. • -- Fujio Mitarai, CEO, Canon •  © Nonaka・Toyama・Konno organization @TC 2013
  • 50. Phronetic Leadership (6) •  Ability to foster phronesis in •  others to build a resilient •  organization. © Nonaka・Toyama・Konno organization @TC 2013
  • 51. Building Distributed Leadership •  I only have two eyes. There are several ten thousands part-time works at Seven-Eleven Japan stores. If everyone can make a judgment on his/her own, we have quite a few eyes. To do so, everyone of us have to respect the fundamental rules of business. •  No one knows for sure how the society will change in future. Because we don’t know, we keep tackling the difficult task to adapt to changes. Everyday, I say that the most important thing is to adapt to any changes. •  © Nonaka・Toyama・Konno -Toshifumi Suzuki, CEO, Seven-Eleven Japan organization @TC 2013
  • 52. Phronetic Leadership Goodness Subjectivity Explicit knowledge - Tacit knowledge Discipline Pragmatism Objectivity Language Experience (particular) Life World (universal) Idealism Ba Synthesis of Self and Others (shared context-in-motion) Dynamic Networking of Ba © Nonaka・Toyama・Konno organization @TC 2013
  • 53. A Knowledge-Based Organization is… • An organization who practices the idealistic pragmatism which synthesizes; • Ontology: How to be – -”For what do we live?”: the vision to the future and the commitment to it. • Epistemology: How to know – -”What is the truth?”: the SECI spiral which synthesizes objective and subjective views. • Creation: How one can change itself and the environment • Management is viewed as “a way of life” rather than a tool to make money. © Nonaka・Toyama・Konno organization @TC 2013
  • 54. Idealistic Pragmatist Brain Deep Thinker Brawn Doer in One Person “Intellectual Muscle” © Nonaka・Toyama・Konno organization @TC 2013