The companies may or may not be at the same position as when this article was written. But the insights provided by this article are still valid for the innovative companies of this generation like Amazon and Google, companies that weren’t around when this article was written.
What I have given below is my understanding and notes from what I read on “Knowledge Creating Company”.
How some companies create knowledge:Some companies respond quickly to customers, create new markets, rapidly develop products and dominate emergent technologies. Key to this 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 a company as a whole.
Mobilizing the knowledge of employees: The key to this process of taking the (tacit) knowledge within an employee and making it available to the whole organization is the personal commitment, the employee’s sense of identity with the enterprise and its mission ( yeah all these are important).
Mobilizing that commitment and embodying the tacit knowledge in actual technologies and products require managers who are as comfortable with images and symbols. The more holistic approach to knowledge at a many companies is also founded on another fundamental insight. A company is not a machine, but a living organism.
Much like an individual, a company 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 the world a reality.In this respect, the knowledge creating company is as much about ideals as it is about ideas. And this fact fuels innovation.
The essence of innovation is to re-create the world according to a particular vision or ideal. To create new knowledge means quite literally to re-create the company and everyone in it, in a non-stop process of personal and organizational self-renewal. In a knowledge creating company, inventing new knowledge is not a specialized activity, but a way of behaving, indeed a way of being, in which everyone is a knowledge worker and also an entrepreneur.
There are two different kinds of knowledge. Explicit knowledge is systematic and formal. For this reason, this can be easily communicated and shared, as in product specifications or a scientific formula or a computer systems.
The other knowledge called Tacit knowledge is not easily expressible and is highly personal. This is deeply oriented in action and in an individual’s commitment to a specific context - a craft or profession, a particular technology or product market, or the activities of a work group or a team.
Tacit knowledge has an important cognitive dimension. It consists of mental models, beliefs and perspectives so ingrained in an individual – so much so that the individual takes it for granted and cannot easily articulate them.
Based on this definition, there are four ways in which knowledge can be created/transferred.
From Tacit to Tacit: Sometimes one individual shared tacit knowledge directly with others. This way the shared knowledge becomes part of his/her own knowledge base. The process that transfers tacit knowledge in one person to tacit knowledge in another person is socialization. It is experiential, active and a “living thing,” involving capturing knowledge through direct interaction. Socialization is primarily a process between individuals.
From Explicit to Explicit: An individual can combine discrete pieces of explicit knowledge into a new whole. But most of the time, this combination doesn't really extend the company’s existing knowledge base any further. Once knowledge is explicit, it can be transferred as explicit knowledge through a process Nonaka calls combination. This is the area where information technology is most helpful, because explicit knowledge can be conveyed in documents, email, data bases, as well as through meetings and briefings. Combination allows knowledge transfer among groups across organizations.
From Tacit to Explicit: when a person is able to articulate his knowledge, giving it the proper context and defines it under the correct system, the tacit knowledge becomes explicit. The process for making tacit knowledge explicit is Externalization. One case is the articulation of one’s own tacit knowledge - ideas or images in words, metaphors, analogies. A second case is eliciting and translating the tacit knowledge of others - customer, experts for example - into a readily understandable form, e.g., explicit knowledge. Dialogue is an important means for both. Externalization is a process among individuals within a group.
From Explicit to Tacit: When new explicit knowledge is shared throughout an organization, other employees began to internalize it – that is they use it to broaden, extend, and reframe their own tacit knowledge. Internalization is the process of understanding and absorbing explicit knowledge in to tacit knowledge held by the individual.
Knowledge Creation Process:
As mentioned above, each type of knowledge can be converted. When viewed as a continuous learning process, the model becomes a clockwise spiral. And organizational learning depends on initiating and sustaining the learning spiral. (The model is a spiral, not a cycle, because as one “learns” around the cycle, understanding moves to deeper and deeper levels.)
Physical - office
Virtual - email, teleconferences and Social networks
Mental - shared experiences, ideas, beliefs
Relationship - people sharing common goals
Enablers for knowledge creation.
1.A Company’s vision. This should be equivocal. This is important as it gives the employees and work groups the freedom and autonomy to set their own goals. If a vision is too unambiguous, it becomes similar to an order. And orders do not foster the high degree of personal commitment on which effective knowledge creation depends.
2. A Company's Strategy. This helps to conceptualize what knowledge to develop.
3. The next enabler is System, which Nonaka describes as networking communities of knowledge, to competitors, customers, related industries, regional communities, and subsidiaries. It also includes the knowledge vision, a knowledge conversion system and processes as well as a knowledge base.
4. The fourth enabler is Structure. One management challenge is to maintain a balance between the fractal organization, which is categorized as self-organizing, capable of great speed and agility, and especially good at socialization and externalization. In contrast is the bureaucracy, with a hierarchy, division of labor and specialization, which is especially good at combination and internalization. Both of these are necessary.
5. The last enabler is Employee. While Frontline employees, senior executives are all important, middle managers have an important role to play. The role of the middle manager is to support, nurture, care about, initiate and complete the knowledge spiral. They play the critical role of bridge between the visionary ideals of the top, and the chaotic market reality of those on the front-line.
Middle managers mediate between ‘what is’ and ‘what should be’ . They have the important role of making reality according to the company’s vision. Middle managers are the true “knowledge engineers” of the knowledge creating company.
To sum it up, True knowledge - actionable understanding - comes from gut-level commitment and belief. Therefore, building and conveying knowledge requires shared emotion, feeling, mental models, experiences, and 'empathy space'.
When i read the article and introspected about it, the following thoughts came to my mind.
Thought#1: Project managers should learn the category of knowledge that they are dealing with and handle it accordingly. Handling Tacit knowledge as Explicit and vice versa can be disastrous to the project.
Thought #2: Project Management Theory is Explicit knowledge and the project manager’s experience gained through years of practice is more of tacit knowledge. While the theory part is easy to learn, the tacit part is acquired through doing the actual work and getting one’s hands dirty. This allows a project/ program manager to learn certain things that are definitely not part of any body of knowledge and are hard to pin down and easily termed as expertise.
Thought#3: Project management is never a standalone act and by it’s very definition involves lot of coordination. The work a project manager does is in the environment provided by the organization. When the environment is not very conducive to convert the tacit knowledge to explicit knowledge or the organization mistakes tacit knowledge to be explicit knowledge or vice-versa, the ability of the project manager to deliver success, (however smart or experienced the person may be), is impacted.