The Knowledge-Creating Company




  • 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 (View Highlight)
  • 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. 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. (View Highlight)
  • 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. (View Highlight)
  • as new explicit knowledge is shared throughout an organization, other employees begin to internalize it—that is, they use it to broaden, extend, and reframe their own tacit knowledge (View Highlight)
  • In most companies, the ultimate test for measuring the value of new knowledge is economic—increased efficiency, lower costs, improved ROI. But in the knowledge-creating company, other, more qualitative factors are equally important. Does the idea embody the company’s vision? Is it an expression of top management’s aspirations and strategic goals? Does it have the potential to build the company’s organizational knowledge network? (View Highlight)
  • centerpiece of the Japanese approach is the recognition that creating new knowledge is not simply a matter of “processing” objective information. Rather, it depends on tapping the tacit and often highly subjective insights, intuitions, and hunches of individual employees and making those insights available for testing and use by the company as a whole. (View Highlight)
  • because tacit knowledge includes mental models and beliefs in addition to know-how, moving from the tacit to the explicit is really a process of articulating one’s vision of the world—what it is and what it ought to be. When employees invent new knowledge, they are also reinventing themselves, the company, and even the world. (View Highlight)
  • Making personal knowledge available to others is the central activity of the knowledge-creating company. It takes place continuously and at all levels of the organization. (View Highlight)
  • Teams play a central role in the knowledge-creating company because they provide a shared context where individuals can interact with each other and engage in the constant dialogue on which effective reflection depends. Team members create new points of view through dialogue and discussion. They pool their information and examine it from various angles. (View Highlight)
  • When people’s rhythms are out of sync, quarrels occur and it’s hard to bring people together,” acknowledges a deputy manager for advanced technology development at Canon. “Yet if a group’s rhythms are completely in unison from the beginning, it’s also difficult to achieve good results.” (View Highlight)
  • The more holistic approach to knowledge at many Japanese companies is also founded on another fundamental insight. A company is not a machine but a living organism. Much like an individual, it can have a collective sense of identity and fundamental purpose. This is the organizational equivalent of self-knowledge—a shared understanding of what the company stands for, where it is going, what kind of world it wants to live in, and, most important, how to make that world a reality (View Highlight)