1 The Nonaka-Takeuchi Model of Knowledge Management “In an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge.” I. Nonaka  The problem is that few managers understand how to manage the knowledge-creating company  Focus on ‘hard’ or quantifiable knowledge  See KM as information processing machine

2 Nonaka & Takeuchi/2  The authors studied successful Japanese companies to try to identify how they achieved creativity and innovation Found it was more than mechanistically processing objective information Depending on highly subjective insights Slogans, metaphors, symbols Holistic model of knowledge creation and management of “serendipity”

3 Nonaka & Takeuchi: The Spiral of Knowledge  Knowledge creation always begins with the individual Brilliant researcher has an insight that leads to a new patent Middle manager has intuition of market trends and becomes the catalyst for an important new product concept Shop floor worker draws on years of experience to come up with a process innovation that saves $$$$  In each case, an individual’s personal knowledge is translated into valuable organizational knowledge

4 The Basis for the Nonaka – Takeuchi Model  Making personal knowledge available to others in the company is at the core of this model of KM It takes place continuously It takes place at all levels of the organization Individual Groups Company-wide Can be unexpected E.g. home bread-making machine innovation

5 Explicit vs. Tacit Knowledge files Tacit Knowledge Explicit Knowledge 80-85%15-20% active passive

6 Tacit Explicit TacitExplicit.... Nonaka and Takeuchi Model

7 Nonaka & Takeuchi – the Knowledge Spiral Model Tacit Explicit TacitExplicit Socialization Brainstorming Coaching Combination: Systemizing Classifying Externalization Capturing Sharing Internalization Internalization: Understanding Learning

8 Tacit to Tacit Transformation  Individual to individual(s) Apprenticeship Mentoring Observation Shadowing Imitation Practice Brainstorming Coaching Apprentice may learn from the master, but the knowledge remains tacit & is not leveraged across the organization

9 Tacit to Explicit Transformation  Able to articulate the knowledge, know-how  Can be written, videotape, audiotape format  Often need intermediary to capture this knowledge – a journalist, a workshop… It now exists in a tangible form It can now be more easily shared with others and leveraged throughout the organization

10 Explicit to Explicit Transformation  Can combine discrete pieces of tangible knowledge into a new form E.g. a synthesis in the form of a report, a comparative evaluation, a new database Simply a new combination of existing knowledge – no new knowledge is created It is easiest to convert from the same type of knowledge – tacit to tacit and explicit to explicit – harder to change the type

11 Explicit to Tacit Transformation  As new knowledge is shared throughout the organization, employees now begin to internalize it They use it, broaden it, extend it and reframe their own existing tacit knowledge base They learn – they do their jobs differently now

12 The KM Spiral  First we learn something through socialization (e.g. being apprenticed to a master)  Next we translate this into a tangible format that can be more easily communicated to others (externalization)  This knowledge is then standardized using templates, coding rules etc (new combination)  Finally, team members enrich their own tacit knowledge bases by adding new knowledge and skills (internalization)  They then share this new knowledge tacitly (back to socialization and the spiral continues) Tacit to Explicit and Explicit to Tacit are the key steps

13 From Metaphor to Model  Externalization (tacit to explicit) and Internalization (explicit to tacit) both require a high degree of personal commitment  Involves Mental models Personal beliefs and values Re-inventing yourself as well as the organization  Metaphor is a good way of expressing the “inexpressible” Slogans, symbols Fables, stories, allegories analogies Models – final step, no contradictions, consistent, systematic, logical “two ideas in a single phrase”

14 From Chaos to Concept  How to structure metaphors, models and analogies in an organizational KM design  1 st principle: Built-in redundancy – make sure there is shared overlapping information Easier to articulate Easier to share Easier to internalize Can be done with internal competing groups, built-in rotational strategy and free access to company information via single integrated database or k-base

15 From Chaos to Concept (con’t)  Need to orient ensuring chaos created by the inevitable discrepancies in meaning that occur Provide a conceptual framework that helps them make sense of their experiences Conceptual umbrella for key concepts Domain ontology – categorization of the organization’s knowledge base Standards set by the company re. strategic value of knowledge

16 Recommended Solution Tacit Explicit TacitExplicit Recommendations Recommendations Recommendations Recommendations