As several articles have shown, countries in Takeuchi aim to synthesize a theory that mediates transition have to develop an appropriate technology between the individual and the organization, be- policy response, especially to realise the opportuni- tween top-down and bottom-up management, be- ties arising from international technology transfer.
Providing experiences and judgements the study of innovation. Von Hippel also will remain the major tasks herein. Ouchi Ulrike Bross contrasts Japanese and American attitudes Fraunhofer Institute for Systems towards tacit knowledge and Morgan explains and Innovation Research how these same differences assist Japanese compa- Breslauer Strasse nies in understanding and reaffirming values in a Karlsruhe, Germany process of double loop learning.
Book reviews Nonaka and Takeuchi may also be guilty of selec- slogans of top management 'Let's gamble' and tive interpretation of at least some aspects of the objectives for design engineers 'Tall Boy' it be- 'traditional' view of management science. For exam- comes even more difficult to grasp the range of ple, their description of the focus of systems thinking activities that 'knowledge engineers' discharge. Only and the learning organization as being on 'learning by digging beneath the slogans can we understand with the mind, not with the body' ignores the rich exactly what the skilled knowledge engineer role systems tradition of model-building and 'manage- involves.
The authors manage this best in their de- ment flight simulators', 1 of creating learning envi- scription of the externalization process Matsushita ronments within which learning with the body rein- engineers undertook to capture the tacit knowledge forces learning with the mind.
The model of exter- of a master baker and embody this in the explicit nalization that Nonaka and Takeuchi present, of design principle of a 'twisting stretch'. Utterback and innovation, and the new product development pro- Christensen among others stress the impor- cess in particular, Nonaka and Takeuchi synthesize tance of looking at innovation over multiple innova- the individual components and dichotomics of tion cycles as organizations and approaches that have knowledge creation into innovative and compelling succeeded during one innovation cycle fail in the concepts.
These concepts are captured through next. While Nonaka and Takeuchi set out to explain phrases such as the 'spiral of organizational knowl- 'why certain Japanese companies have been continu- edge creation' and ' m i d d l e - u p - d o w n ' management. Some of their and approaches in linked product developments. The Matsushita Home Bakery develop- organization structures to span multiple innovation ment, for example, illustrates the repeated cycling and knowledge creation cycles, that managing over between all four modes of knowledge creation.
The time is most important. Nonaka and Takeuchi do not story of the development of the Nissan Primera explain how organizations should re-invent their shows the lengths to which companies may need to knowledge and abilities but instead hold out the go in managing socialization. Takeuchi feel is so poorly understood, that their Nonaka and Takeuchi propose a seven step pro- examples seem the weakest.
It is hard to understand gram 3 to put their theory of knowledge creation into how slogans such as 'Let's gamble', 'Man-maxi- practice. The authors acknowledge that the process mum, Machine-minimum' and 'Tall Boy' effec- of change is complex but fail to address many of the tively make tacit concepts explicit.
When Nonaka critical barriers to change in an innovative organiza- and Takeuchi go on to reconstruct the role of middle management in terms of translating between the 3 1 Create a knowledge vision, 2 Develop a knowledge crew, 3 Build a high-density field of interaction at the front-line, For example Morecroft stresses the role of modeling 4 Piggyback on the new-product development process, 5 Adopt as part of an iterative learning process, as part a process of middle-up-down management, 6 Switch to a hypertext organi- translation between tacit and explicit modes of learning.
To take one example, Katz illustrates the References range of factors that can limit the impact of 'high- performance teams' even when their goals are aligned Christensen, C. Imai, K. Next, she translates these secrets into explicit knowledge that she can communicate to her team members and others at Matsushita articulation.
The team then standardizes this knowledge, putting it together into a manual or workbook and embodying it in a product combination. Finally, through the experience of creating a new product, Tanaka and her team members enrich their own tacit knowledge base internalization. In particular, they come to understand in an extremely intuitive way that products like the home bread-making machine can provide genuine quality. That is, the machine must make bread that is as good as that of a professional baker.
This starts the spiral of knowledge all over again, but this time at a higher level. The new tacit insight about genuine quality developed in designing the home bread-making machine is informally conveyed to other Matsushita employees. They use it to formulate equivalent quality standards for other new Matsushita products—whether kitchen appliances, audiovisual equipment, or white goods. The reason is that both require the active involvement of the self—that is, personal commitment.
Similarly, when the comptroller articulates his tacit knowledge and embodies it in a new innovation, his personal identity is directly involved in a way it is not when he merely crunches the numbers of a conventional financial plan.
When employees invent new knowledge, they are also reinventing themselves, the company, and even the world. When managers grasp this, they realize that the appropriate tools for managing the knowledge-creating company look very different from those found at most Western companies.
To convert tacit knowledge into explicit knowledge means finding a way to express the inexpressible. Unfortunately, one of the most powerful management tools for doing so is also among the most frequently overlooked: the store of figurative language and symbolism that managers can draw from to articulate their intuitions and insights. At Japanese companies, this evocative and sometimes extremely poetic language figures especially prominently in product development.
Managers also realized that along with a new postwar generation entering the car market, a new generation of young product designers was coming of age with unconventional ideas about what made a good car. Top management charged the team with two—and only two—instructions: first, to come up with a product concept fundamentally different from anything the company had ever done before; and second, to make a car that was inexpensive but not cheap.
This mission might sound vague, but in fact it provided the team an extremely clear sense of direction. For instance, in the early days of the project, some team members proposed designing a smaller and cheaper version of the Honda Civic—a safe and technologically feasible option. But the team quickly decided this approach contradicted the entire rationale of its mission. The only alternative was to invent something totally new. The phrase described an ideal. In effect, it posed the question, If the automobile were an organism, how should it evolve?
Such a car, they reasoned, would be lighter and cheaper but also more comfortable and more solid than traditional cars. A sphere provided the most room for the passenger while taking up the least amount of space on the road. The Tall Boy concept totally contradicted the conventional wisdom about automobile design at the time, which emphasized long, low sedans. The story of the Honda City suggests how Japanese companies use figurative language at all levels of the company and in all phases of the product development process.
It also begins to suggest the different kinds of figurative language and the distinctive role each plays. One kind of figurative language that is especially important is metaphor. Rather, metaphor is a distinctive method of perception. It is a way for individuals grounded in different contexts and with different experiences to understand something intuitively through the use of imagination and symbols without the need for analysis or generalization.
Through metaphors, people put together what they know in new ways and begin to express what they know but cannot yet say. As such, metaphor is highly effective in fostering direct commitment to the creative process in the early stages of knowledge creation. Often, metaphoric images have multiple meanings and appear logically contradictory or even irrational. But far from being a weakness, this is in fact an enormous strength.
For it is the very conflict that metaphors embody that jump-starts the creative process. As employees try to define more clearly the insight that the metaphor expresses, they work to reconcile the conflicting meanings.
That is the first step in making the tacit explicit. And yet, this discrepancy is a fruitful platform for speculation about the characteristics of the ideal car. But while metaphor triggers the knowledge-creation process, it alone is not enough to complete it.
The next step is analogy. Whereas metaphor is mostly driven by intuition and links images that at first glance seem remote from each other, analogy is a more structured process of reconciling contradictions and making distinctions. Put another way, by clarifying how the two ideas in one phrase actually are alike and not alike, the contradictions incorporated into metaphors are harmonized by analogy.
In this respect, analogy is an intermediate step between pure imagination and logical thinking. Canon designers knew that for the first personal copier to be successful, it had to be reliable. To be disposable, however, the drum would have to be easy and cheap to make. How to manufacture a throwaway drum? The breakthrough came one day when task-force leader Hiroshi Tanaka ordered out for some beer.
By exploring how the drum actually is and is not like a beer can, the minicopier development team was able to come up with the process technology that could manufacture an aluminum copier drum at the appropriate low cost. Finally, the last step in the knowledge-creation process is to create an actual model.
A model is far more immediately conceivable than a metaphor or an analogy. In the model, contradictions get resolved and concepts become transferable through consistent and systematic logic. The quality standards for the bread at the Osaka International Hotel lead Matsushita to develop the right product specifications for its home bread-making machine. The image of a sphere leads Honda to its Tall Boy product concept. In reality, they are often hard to distinguish from one another; the same phrase or image can embody more than one of the three functions.
Still, the three terms capture the process by which organizations convert tacit knowledge into explicit knowledge: first, by linking contradictory things and ideas through metaphor; then, by resolving these contradictions through analogy; and, finally, by crystallizing the created concepts and embodying them in a model, which makes the knowledge available to the rest of the 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.
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. And yet, building a redundant organization is the first step in managing the knowledge-creating company. Redundancy is important because it encourages frequent dialogue and communication.
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. This encourages the team to look at a project from a variety of perspectives. In one sense, such internal competition is wasteful.
Why have two or more groups of employees pursuing the same product-development project? 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.
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