Tacit Knowledge in Organization

1. Tacit Knowledge in Organization Article 7- 9 Vladimir Visipkov Yun Kim

2. Contents • The Role of Tacit Knowledge in Group Innovation • By Dorothy Leonard & Sylvia Sensiper, 1998 • The Concept of “Ba”: Building a foundation for Knowledge Creation • By Ikujiro Nonaka & Noboru Konno, 1998 • If Only We Knew What We Know: Identification and Transfer of Internal Best Practices • By Carla O’Dell & C.Jackson Grayson, 1998       

3. The Role of Tacit Knowledge in Group Innovation By Dorothy Leonard & Sylvia Sensiper, 1998

4. Summary of the Paper • Innovation in organization is acquired by creative cooperation than individual work. • Group innovation is occurred through the recursive divergence and convergence process. In the group innovation, tacit knowledge is acting as material in divergence and glue in convergence process. • As managerial implementation, it is required to make organizational culture in which intelligent failure and different thinking style are admitted.

5. Tacit Knowledge & Innovation • Tacit Knowledge • Hard to capture, but essential to the innovation • Innovation • Creative cooperation than an individual undertaking • Challenge • Required to merge of knowledge from diverse national, disciplinary, and personal skill-based perspectives

6. Tacit Knowledge Individual Level(1) • The arbitrary distinction for the convenience • Tacit - “Not Yet Explicated” • Knowledge Spectrum

7. Tacit Knowledge Individual Level(2) • Two types of tacit knowledge

8. Tacit Knowledge • Why knowledge remains tacit? • Lack of Reward • Unawareness(automatic knowledge) • We know more than we can tell, also we know more than we realize

9. Tacit Knowledge • Three Tacit Knowledge Usage in Innovation • Problem Solving (intuition-unconscious pattern matching) • Problem Finding • Prediction and Anticipation(Hunches, Dream)

10. Creativity and Social Interaction • Creativity • Not spontaneously arise from the air, • But born out • Conscious Social interaction facilitate the creativity activity

11. Nature of innovation

12. Nature of innovation –Divergence(1) • Intellectually heterogeneous groups are more innovative than homogeneous ones • Creative abrasion • Intellectual conflict between diverse viewpoints • More options • GroupThinking (The bay of Pigs Invasion, JFK) • The stupid decision by very smart persons • Neither various options nor searching effort

13. Nature of innovation – Divergence(2) • IDEO Brainstorming • Defer judgment • Build on the ideas of others • One conversation at a time • Stay focused on the topic • Encourage wild ideas

14. Nature of innovation – Divergence(3) • Need for Divergent viewpoints • Requirement for different types of expertise • Demands for sensitivity to diverse norms and attitude (Global Era)

15. Nature of innovation – Convergence(1) • Convergence • The aggregate knowledge of project members has to be coordinated and focused • Harvest • Tacit knowledge as “glue” in Convergence (Tacit knowledge as “material” in Divergence) • Some tacit knowledge as a common base

16. Nature of innovation – Convergence(2) • Three different types of tacit knowledge

17. Managerial Implications(1) • Barriers to the sharing of tacit knowledge • Hierarch • Strong preference for analysis over intuition • Penalties for failure

18. Managerial Implications(2) • How to encourage the full exploitation of tacit knowledge • Pay attention to the work environment culture • Respect for different thinking style • Understanding between intelligent failures and stupid mistakes

19. Managerial Implications(3) • Assessment of Tacit knowledge => based on the result of knowledge • Physical skills – visible(skiers, tennis players) • Cognitive skills – by track record of performance • Other method to Judge the value of tacit knowledge • Ability to communicate some of the tacit dimensions to their knowledge through prototyping, drawing, demonstrating, expressing ideas through metaphors and analogies, or mentoring in general

20. Discussion • How can tacit knowledge be converted to explicit knowledge? • Do you agree that Intellectually heterogeneous groups are more innovative than homogeneous ones?

21. The Concept of “Ba”: Building a foundation for Knowledge Creation By Ikujiro Nonaka & Noboru Konno, 1998

22. Summary of the Paper • Knowledge creation is a spiraling process of interactions between explicit and tacit knowledge. • There are four types of ba, corresponding to the four stages of the SECI model. These ba offer platforms for specific steps in the knowledge spiral process • Ba can be generated by organizational effort. What kind of knowledge is concentrated in it depends on the situation and strategy of a company

23. 場 (ば Ba: Field, Place) • Field (relative concept, space distinctive from surrounding) • Public (open) • Context (space + time + interaction ) • Infrastructure (different in the specific characteristic from surrounding) • For example, Playground for children, Conference for scholars, Market for exchange, Square for meeting (Magnetic field, Gravitation field, email, teleconference) • In my opinion, more closer translation of “Ba” is not place but field (confusion from 場所 Basho : Place)

24. Nonaka’s Ba • Field for Knowledge Creation • “Ba is a Space that serves as a foundation for knowledge creation.” • “Knowledge is embedded in ba, where it is then acquired through one’s own experience or reflections on the experiences of others.” • “If knowledge is separated from ba, it turns into information.”

25. The SECI Model Articulation Translating into easy form Empathize Physical Proximity Collecting & externalization Dissemination Editing or processing Communication Systemization

26. Ba and Knowledge Conversion

27. The Four Types of Ba

28. Constructing Ba: Cases in the Transformation of Ba • Sharp • Ba: project teams and Creative Lifestyle Focus Center • Location: outside existing organization • Task: high speed product development • Transfer mechanism: project teams • Project initiator: each division • Criteria: “urgency”; impact on the entire firm • Proposal reviewer: General Techn. Conference

29. Constructing Ba: Cases in the Transformation of Ba

30. Constructing Ba: Cases in the Transformation of Ba • Toshiba • Ba: ADI (Advanced I Strategy) Group • Location: inside organization; at the level of other business groups • Task: provide new markets and new opportunities in the interactive media field • Transfer mechanism: business group

31. Constructing Ba: Cases in the Transformation of Ba • Toshiba • Key strategies for the development of knowledge: • To intensify the sense of speed and agility, • To change the fiscal period mind set, • To create a boundaryless operation-partnership, • To invest to get an early foothold in emerging markets. • Financing: 0.5% of each of the business unit sales (30 billion Yen).

32. Constructing Ba: Cases in the Transformation of Ba

33. Constructing Ba: Cases in the Transformation of Ba • Maekawa Seisakusho • Management system: a group of “independent corporations” that form a collective entity • Ba is seen as “the arenas where groups can grow and innovate” • Each corporation has to pursue its own ba • Ba jointly possessed by the customers and should not be dominated by the company’s ideas

34. Constructing Ba: Cases in the Transformation of Ba • Maekawa Seisakusho • Employees: • Specialized generalists who have a wider consciousness of self within organization • Understanding of self within the totality of the ba constitutes the foundation of the company’s culture

35. Constructing Ba: Cases in the Transformation of Ba

36. Implications • Ba: Organic Ground for Knowledge Creation • Knowledge creation and application represent not economy but ecology with a cyclical cultivation of resources • Ba is a stage for the resource cycle • Effect of the positive feedback: knowledge cultivates the feedback from the market which in time fosters even higher growth

37. Implications • Management for Knowledge Creation • Leaders must support emerging processes with visionary proposals and personal commitment. • This requires a different sort of leadership based on realization that knowledge needs to be nurtured, supported, enhanced, and cared for.

38. Discussion • Do you agree with the argument that Knowledge is embedded in ba(shared spaces)? • What are the pros and cons of different forms of Ba presented in the case studies (operational, financial and other issues)?

39. If Only We Knew What We Know: Identification and Transfer of Internal Best Practices by Carl O’Dell and C. Jackson Grayson

40. Summary of the Paper • The Importance of Internal Benchmarking • Difficulties Associated with Internal Benchmarking • Approaches to Benchmarking and Best-Practice Transfer • Keys for Effective Transfer

41. Internal Benchmarking: • the process of identifying, sharing, and using the knowledge inside own organization. • helps organizations to compete. • its implementation showed the inability of organizations to transfer outstanding practices from one location to another.

42. General Motor example • GM entered into a joint venture with Toyota at the NUMMI assembly plant in Fremont (CA) to learn its approaches and transfer to GM. • practices did not transfer to any great extend. • GM had to create a completely new division.

43. Why Didn’t Knowledge and Best Practice Transfer? Gabriel Szulanski’s research demonstrated: • Ignorance on both ends of the transfer • Absorptive capacity of the recipient • The lack of relationship • A long adoption period (aver. 27 months)

44. Potential Gains from the Transfer of the Best Practices • Buckman Laboratories’s transfer of knowledge and best practices system increased new product-related revenues by 10%. • Texas Instruments generated $1.5 billion in annual free wafer fabrication capacity by transferring internal best practices. • Chevron saved at least $20 mil. a year on the operation of gas compressors in fields.

45. Why is Internal Benchmarking and Transfer Tough? • Organizational structures promote “silo” behavior (sub-optimization). • A culture that values personal expertise and knowledge creation over sharing. • The lack of contact, relationships, and common perspectives among co-workers.

46. Why is Internal Benchmarking and Transfer Tough? • An over-reliance on transmitting “explicit” rather than “tacit” information. • Not allowing or rewarding people for taking the time to learn and share.

47. Why the Interest in the Transfer of Best Practices? Five instigators • A Compelling Call to Action Chevron’s case: the need for significant cost reduction through sharing coupled with a decentralized operating philosophy.

48. Why the Interest in the Transfer of Best Practices? • Demonstrated Success Chevron’s case: network of 100 people who share ideas on energy-use management has generated over $650 million savings. This success has created great support for more internal sharing and transfer.

49. Why the Interest in the Transfer of Best Practices? • Decentralization and Downsizing • led to demise of traditional management networks that served as a vehicle for the transfer of practices.

50. Why the Interest in the Transfer of Best Practices? • Benchmarking Evidence TI and Chevron found examples of success among competitors and best practice firms. That created a sense of urgency and hope.