Learning, knowledge and knowledge creation are integral in the process of innovation, product development and understanding the external environment. None of these elements must be viewed as a once-off exercise. Knowledge creation, based on the work of Nonaka Takeuchi, is a continuous development process that “goes” through a number of stages until it becomes useful knowledge that can be applied in the product development process.96 It ultimately leads to new products being released in the market place. In the knowledge creation process, information plays a key role, as information is manipulated and analysed to provide insight into a particular aspect, i.e. the information is used to create knowledge.
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Kleiner, A. 2003. Core Groups: A theory of Power and Influence for “learning” organizations 277-279
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Kleiner, A. 2003. Core Groups: A theory of Power and Influence for “learning” organizations 281
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Voronov M, Yorks L. 2005. Taking power seriously in strategic organizational learning, 16
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Voronov M, Yorks L. 2005. Taking power seriously in strategic organizational learning, As defined by Voronov and Yorks – ability to get ones goals met.
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Voronov M, Yorks L. 2005. Taking power seriously in strategic organizational learning, 17
96
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Knowledge is the use of the information within the context of the individual’s beliefs which will ultimately influence the behaviour and actions.97 There are two distinct knowledge categories, tacit and explicit.98 The exchange between the two categories together with experiential learning within the organisation is an imperative in the knowledge creation process.
The level of success of organisations is directly linked to the manner in which they “treat” these two elements. It is argued by Nonaka and Takeuchi that these elements are the primary differentiator between Western and Japanese companies and the culture of learning and knowledge creation. Japanese companies have been used as a benchmark in terms of knowledge management and knowledge creation for many years. This is coupled with their ability to continuously develop new products through innovation.99 The structure of their teams and the manner of engagement between leadership and team members is viewed as a key component that steers the creation and development process100. Nonaka and Takeuchi assert that Japanese companies, in the face of a crisis always resort to the “organisational knowledge creation” process to carry them through. They make a clear distinction between the American giants IBM, Sears and General Motors and large Japanese companies that use the knowledge creation process, the former having been the “monarch” of the American economy. Due to the American companies dominating the market, they were blind to the changes taking place in the external environment. Their interpretation of the external environment was limited to the values and shared models of their respective organisations. Japanese companies through continuous engagement and monitoring of the external environment “look outside” and anticipated change unlike the three American companies. Nonaka and Takeuchi suggest that they ignored the outside market and by implication believe that they were the trend setters.101
In the knowledge economy an organisation is always transforming as it can ill afford to be static. The rationale is that new knowledge in a knowledge economy is always being
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I Nonaka, H Takeuchi, 1995. The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation, 58
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I Nonaka, H Takeuchi, 1995. The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation, 8 “Tacit – something not easily visible and expressible. Tacit knowledge is highly personal and hard to formalise, making it difficult to communicate or share with others. Explicit – something formal and systematic. Explicit knowledge can be expressed in words and numbers”. Pg 8 these definitions guide the argument on the differences between Western and Japanese companies.
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I Nonaka, H Takeuchi, 1995, The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation, 4
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I Nonaka, H Takeuchi, 1995, The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation, 11
101
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generated and this changes the external environment. To cater for these changes in the external environment the knowledge must be internalised so that it can be factored into the products being offered to the market.102
To get an organisation to a state in which it has the ability to learn and create knowledge, the organisation must be transformational and the leadership must have the ability to guide the knowledge and the knowledge worker appropriately. That would include giving them a sense of freedom.103 Leaders must have the ability to allow a degree of latitude to the sub-ordinates
that will ensure that they perform beyond what is required.104The boundary within which they
operate must be flexible to adjustment.
Innovation and organisational sustainability have a very strong link. Flynn and Chatman quote Amabile105 “[i]nnovation is absolutely vital for long-term corporate success... [N]o firm that continues to deliver the same products and services in the same way can long survive. By contrast, firms that prepare for the future by implementing new ideas oriented toward this changing world are likely to thrive.” Innovation is fundamental in ensuring that a company retains its competitive advantage. Knowledge creation and innovation can be viewed as two side of the same coin. Knowledge from the external environment is gathered and shared within the organisation specifically with the teams working with new product development. In working with the knowledge gathered, it undergoes a conversion of sorts and is then released to the environment in the form of products and services. This is the process of innovation and the Japanese companies have been able to continuously be innovative.106 The structure of an organisation influences the ability of the people to be creative and innovative. Even though creativity resides within individuals, it has been argued that groups may have a higher yield for producing new products.107
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I Nonaka, H Takeuchi, 1995, The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation, 6
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I Nonaka, H Takeuchi, 1995, The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation, 15
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Tickle, EL, Brownlee, J, Nailon, D. 2005. Personal and epistemological beliefs and transformational leadership behaviours, 708 Transformational leaders communicate a clear, optimistic and attainable picture of the organisations future, encouraging subordinates to develop “beyond the norm” so that the organisation can also grow and develop.
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Tushman, LT, Andersen, (eds) 2004. Strong Cultures and Innovation Oxymoron or Opportunity? in Managing Strategic Innovation and Change A Collection of Readings, 234 , reprint
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I Nonaka, H Takeuchi, 1995, The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation, 6
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Tushman, LT, Andersen, P. (eds) 2004. Strong Cultures and Innovation Oxymoron or Opportunity? in Managing Strategic Innovation and Change A Collection of Readings 2nd Edition. 235, reprint
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What has been outlined above demonstrates that the process of creating knowledge is fairly complex and requires a base of existing knowledge. The existing knowledge is used to create new knowledge. Boisot makes reference to the fact that existing knowledge must be codified for diffusion to occur. The process of diffusion provides the basis for new knowledge creation. Nonaka and Takeuchi suggest that the exchange between tacit and explicit creates the platform for new knowledge creation. Innovation is not possible without the process of creating new knowledge.