organization theory and design 13 2013

organization @TC 2013

13 การสร้างและออกแบบ learning Organization/กระบวนการเรียนรู้


หัวข้อบรรยาย/กรณีศึกษา 11 Organizing for Innovation C 8: Harvard Business Case / 3M Optical Systems : Managing Corporate Entrepreneurship 12 การสร้างและออกแบบ Cybernetics, Viable System C 9 : Harvard Business Case / Sun Hydraulics Corporation (A&B) 13 การสร้างและออกแบบ learning Organization/กระบวนการเรียนรู้ C 10 : Harvard Business Case / McKinsey & Company : Managing Knowledge and Learning 14 Control system C11: Harvard Business Case / Verizon 15 สรุปปิดการบรรยาย or guest speaker


Why Knowledge?

•  “Knowledge is the only meaningful resource today.” •  Peter Drucker (1993)

• Knowledge is one of the most important assets • of an organization for creating value and, hence, • maintaining sustainable competitive advantage.

© Nonaka・Toyama・Konno


Characteristics of Knowledge

– 1. Increasing Return – 2. Unlimited Usage – 3. Unseparated Production and Consumption – 4. Difficulties in Market Transaction – 5. New Value by Re-categorization – 6. Quickly Outdated – 7. Created by Human Beings

• 　　　　　　　　　　　　　　　　 © Nonaka・Toyama・Konno

organization @TC 2013 © Nonaka・Toyama・Konno

Simon’s Metaphor: A Man is an Ant - Bounded Rationality or Cognitive Limits -

A man, viewed as a behaving system, is quite simple. The apparent complexity of his behavior over time is largely a reflection of the complexity of the environment in which he finds himself.

Simon, H.A.(1982) The Sciences of the Artificial.

Direction to Home


Two Types of Knowledge

Dynamic Interaction Analog-Digital Synthesis

Objective and rational knowledge that can be expressed in words, sentences, numbers, or formulas (context-free)

Theoretical approach Problem solving Manuals Database

Subjective and experiential knowledge that can not be expressed in words, sentences, numbers, or Formulas (Context-specific) Cognitive Skills

beliefs images perspectives mental models

Technical Skills

craft know-how

Tacit Knowledge Explicit Knowledge


Tacit and Explicit Knowledge

“The strength of Japanese manufacturing industries are at the technologies (based on) tacit knowledge. With the progress in Information Technology (IT), tacit knowledge is converted into explicit knowledge. Still, we need tacit knowledge. To build a car, we have to build people.”

-Hiroshi Okuda, the chairman of Toyota

Without a firm-specific high quality tacit knowledge, a firm cannot survive just by combining explicit knowledge through outsourcing. A company needs to recognize a dispersed tacit knowledge embedded in people, synthesize tacit and explicit knowledge, and incorporate knowledge into key organizational activities for continuous innovation.


Reality has Duality - Subjectivity and Objectivity-

Insider sensitivity Life world Commitment Here and now Phenomenologist Existentialist

Tacit Explicit

Outsider objectivity Factual world Detachment There and then Positivist Spectator


SECI Process


Sharing and creating tacit knowledge through direct experience

I = Individual, G = Group, O = Organization, E = Environment

Learning and acquiring new tacit knowledge in practice

1.Perceiving the reality as it is 2. Sensing and Empathizing

with others and the environment 3. Transferring of tacit knowledge

9. embodying explicit knowledge through action and reflection 10. Using simulation and experiments

Articulating tacit knowledge through dialogue and reflection

4. articulating tacit knowledge using symbolic language 5. translating tacit knowledge into a concept or prototype Systemizing and applying explicit knowledge and information 6. gathering and integrating explicit knowledge 7. Breaking down the concept and finding relationship among concepts 8. editing and systemizing explicit knowledge

Explicit

Explicit

Taci t

Tacit Tacit

Explicit

Explicit

Taci

t

Socialization Externalization

Internalization Combination

O G

E

I

Environment

Individual

I G

G

G

G

Org.

E

I

I I

I

I Group

I E O


Dialogue （Why?）

Practice （How?）

Vision （What?）

Tacit Knowledge (Subjectivity)

Explicit Knowledge (Objectivity)

Environment （Ecosystem）

Driving Objectives

Knowledge Assets

Ba （Shared Context）

Basic Components of Knowledge-creating Organization


Knowledge Vision Knowledge Vision

–  - Essential Questioning: “What do we exist for?” –  “Where should we live?” (Existence and Domain) –  “Why do we create knowledge?” –  A vision that transcends the existing boundary. A vision that can be

accepted by and can inspire the people with various contexts.

–  -Gives the firm an absolute, not a relative, value system. –  “You do it because you want to do it, not because –  everyone else is doing it.” –  -A long-time view that goes beyond the arena of –  competition. It is not a short-time view on efficiency in –  knowledge utilization.



Why do we create knowledge?: A story of Honda

•  Honda was trying to develop the CVCC engine, which had lower emission and higher fuel efficiency. Souichiro Honda, the founder and then CEO of Honda one day told his engineers that the engine would finally give Honda the opportunity to beat Big 3.

•  The engineers looked at Mr. Honda, and said, “Please, don’t say such a thing. We are not doing this to beat other guys. We are doing this for our children.”

•  Mr. Honda was ashamed of himself, and said that he realized that he had become too old, and decided to retire.



Driving Objective

• It is a concept, goal, or codes of conduct to synchronize vision, dialogue, and practice. By pursuing it relentlessly, contradictions are created and synthesized to create high quality of knowledge.

• Seven-Eleven Japan: Cut opportunity losses • Eisai: Knowledge Creation • Canon: Cash Flow • Suzuki: 1cc=1000 Yen



Dialogue - Dialectic in Thought - • 1. Dialectic

– Truth is dynamic and is developed through the dynamic process of thesis, antithesis and synthesis.

• 2. Existential Context – A theme is created by sharing deep thoughts and beliefs.

• 3. Nature of Time, Continuity and Contents – It is not about whether it exists or not, it is a question of the process of how it comes into being. The process productively examines the contents rather than form through denial. – “Human is mortal. Socrates is a human. Socrates is mortal”

– So what? No new meaning can be created. For example, if one asks, – ”What does it mean to be mortal?” we might reach a new conclusion, – “Socrates as a thought is immortal”

• 4. Open Thought – Beyond the recognition of one’s self-fallibility, conflict with others serves as a catalyst to reach a higher level of understanding.



Practice - Dialectic in Action -


Practice as Kata (Creative Routine) - Creative Routine: Continuous spiral of tacit and explicit

knowledge until it becomes the second nature. Kata (form) means “way of doing things.”

- Kata is the core of ideal action. - Good Kata functions as archetype that fosters creative

routine but provides higher freedom. - Kata has a high quality feedback function that sharpen

senses and help to notify and modify the differences between predicted outcomes and reality.

- Shu 守 (learn), Ha 破 (break), and Ri 離 (create) steps are critical in continuous self-renewal processes.


Ba: Shared Context-in-Motion

• Knowledge cannot be created without specifying context (time, space, and relationships); sharing context including experience, memory, past/history is essential.

• Ba is the inter-subjective space-time where meaning is created through dialogues and practice.

It can exist in various spaces such as: Ø Physical - Office, dispersed operating spaces Ø Virtual - E-mail, video conference Ø Psychological - Shared experience (history), beliefs, ideals


Meeting

　

Room

WINDOW

Entrance

WIN

DO

W

Smoking　Communication

Zone

Smoking Communication

Coroner

Creative zone (meeting zone)

Office Zone

meeting CREATIVE　ZONE

OFFICE　ZONE

Forest of Knowledge

Refresh Corner

FOREST OF

KNOWLEDGE

Office for Knowledge Creation


Ba: Waigaya Meeting



Small World Network


The network of human social interactions connect

us all by six degrees of separation.

SIX DEGREES We are a happy family

and we all are six degrees away from an Albanian farmer.

TIPPING POINT Connected people are able to get information and control networks.

I want to be in the middle of the network because it provides me information

and power. I can make big changes by small things.


Small World Network: Rewiring the Multilayered Ba • Through rewiring, far apart ba can be connected to each other to find new combinations and create new knowledge.



Various Ba at Toyota Prius Project


Zi (G21) (Planning)

Calty Design Research (Exterior Design)

BR-VF (Hybrid System)

2nd Vehicle Tech Div. (Brakes)

Drive-train Tech Div.

(Hybrid transaxel)

1st Vehicle Tech Div.

(Suspension) 2nd Engine Tech Div. (Engine)

EV Development (Motor, Battery)

2nd & 4th Electronics Tech Div.

(Inverter)

Panasonic EV Energy


Organization as Organic Configuration of Ba •  Ba is a concept that synthesizes the hierarchy and the network. The

organization is viewed based on the meaning it creates, not the form it takes.


Customer Government

Supplier

Competitor Firm

University

Local Communities


Ecosystem - Characteristics of Knowledge Assets -

• Knowledge has no boundary. The market is an eco-system of knowledge, which is composed of various ba inside and outside of the organization. • When an organization creates knowledge more efficiently and effectively than the market, it internalizes knowledge-creating activities. • The boundary is determined by the ideal image of the knowledge system, appropriateness of knowledge assets, justification cost of knowledge, interaction cost, and co-creating or cooperative relationships among stakeholders.


Knowledge Asset in Embedded in Discipline/Kata/Way

• GE •  What does your global

competitive environment look like?

•  In the last three years, what have your competitors done?

•  In the same period, what have you done to them?

•  How might they attack you in the future?

•  What are your plans to leapfrog over them?

• Honda •  3-Gism: Be at the actual place

of work (genba), know the actual product (genbutsu) and situation (genjyou), be realistic (genjitsuteki).

•  Respect sound theory, develop fresh ideas and make the most effective use of them.

•  A00 -What do you do this for? (Ontological)

•  A0 - What is your concept? (Conceptual)

•  A - What is your specification? (Operational)

Toyota

n Set even higher goals and implement continuous improve- ments without settling with temporary success.

n Observe the place of manufacturing with a clean slate and without bias, repeat ‘why?’ five times to the subject.

n Understand one’s own capability through comparison internally and externally.

Practice of relative values Mutual interaction between relative and absolute values Practice of absolute values


Dialogue （Why?）

Practice （How?）

Vision （What?）

Tacit Knowledge (Subjectivity)

Explicit Knowledge (Objectivity)

Environment （Ecosystem）

Driving Objectives

Knowledge Assets

Ba （Shared Context）

Dynamic Knowledge-based Firms



The Knowledge Leadership is…

• The process to exercise the synthesizing capability of the organization by integrating the vision, dialogues, practice, ba, and environment.

• At the base of such leadership is phronesis.


Aristotle’s Three Types of Knowledge • Episteme (Scientific Knowledge)

– Universal, context-free and objective knowledge (explicit knowledge)

• Techne (Skills and Crafts Knowledge) – Practical and context-specific technical know-how –  (tacit knowledge)

• Phronesis (Practical Wisdom) – Experiential knowledge to make context-specific decisions based

on one’s own value/ethics (high quality tacit knowledge)



Phronesis (Prudence, Practical Wisdom) •  A virtuous habit of making decisions and taking actions that

serve the common good.

•  A capability to find a “right answer” in particular context.

•  Deliberate reasoning and improvisation that comes from the SECI process, which synthesizes particulars and generals.

•  Can acquire only through high quality direct experiences.



Six Abilities to Constitute Phronesis

1.  Ability to make judgment on goodness. 2.  Ability to share contexts with others to create ba/shared

sense. 3.  Ability to grasp the essence of particular situations/things. 4.  Ability to reconstruct the particulars into universals using

language/concepts/narratives. 5.  Ability to skillfully use any necessary means well to realize

concepts for common goodness. 6.  Ability to foster phronesis in others to build resilient

organization.



Phronetic Leadership (1)

•  　Ability to make a judgment on goodness.



Judging What is Good

• Every sort of expert knowledge and every •  inquiry, and similarly every action and • undertaking, seems to seek some good. • Because of that, people are right to affirm •  that the good is ‘that which all things • seek’.

– Aristotle, Nicomachean Ethics

– Example: Self-sufficient values such as happiness.



Judging by Philosophy

•  Philosophy is more important than technologies. Such things as money and technologies are just means to serve people…There is no meaning to a technology if it does not consider people at the basis of it. What drives a firm’s growth is philosophy…A true technology is a crystal of philosophy.

•  -Souichiro Honda



Judging by Fundamental Question

•  Our competitors are neither other companies nor other stores, but our customers' needs and wants. Our absolute value is to answer the fundamental questions of “what does the customer want?”

•  -Toshifumi Suzuki, CEO, Seven-Eleven Japan




•  　Ability to share context with others to create ba/shared sense.



Joking as Context Sharing

•  Joking is very difficult. You have to grasp the atmosphere of the occasion and the chance. It exists only for that particular moment, not anywhere else. The joke doesn’t work in any other timing…To joke is to

understand human emotions. •  -Souichiro Honda



Ba: Canon’s Asakai (Daily Morning Meeting)




•  Ability to grasp the essence of •  particular situations/things.



Ground-level Perspective

© Nonaka・Toyama・Konno Automotive Hall of Fame


Phronetic Experience

•  When I see a motorcycle, I can see many things. I should do such and such to maneuver through the curve. Then I think about the next machine. I can make the machine faster if I do such and such…It’s a natural progress into the next process.

•  Souichiro Honda



In Touch with the Reality: Canon’s Mitarai Visiting the Factory



See Reality in Dynamic Context

•  It is impossible to apply universal rules derived from past experiences, since customers’ need keeps changing and each store is operating in different context. We are successful only by denying the past and constantly reflecting on the future to find fundamental solutions in each particular context.





•  Ability to reconstruct •  the particulars into universals using

language/concepts/ narratives.



Articulate Particulars Using Symbolic Languages


Automotive Hall of Fame


Strategy is a Creation of Stories

•  Strategy is a creation of events. Quantify your objectives as much as you can. And develop a story to crystallize the numbers by specifying the beginning-middle-end story structure.

•  -- Fujio Mitarai, CEO, Canon



Hypothesis Building

•  The concept of opportunity loss from unrealized sales is invisible and difficult to grasp since it is buried In tacit insights gained in particular context for each store. Rather than written manuals, each employee is requested to think and act on his/her subjective insights into the local market accumulated through daily face-to-face interactions with customers.

•  Such subjective insights in particular contexts are objectified through the process of hypothesis building and testing. It is not good if you just see a tree, not a forest. Of course you have to see the particular tree. But you have see to the entire forest as well as the trees.

•  -Toshifumi Suzuki, CEO, Seven-Eleven Japan © Nonaka・Toyama・Konno



• Ability to skillfully use any necessary means to realize concepts for common

goodness.



Strategy as Dialectic Process

•  The reality of strategic process is dynamic and full of confusion and contradictions. In such a process, dialectic thinking to synthesize contradictions is required. It is a way to accept contradictions and make the decisions best suited to the situation without losing the sight of the goodness to be achieved.



Man is a Collection of Contradictory Ideas

• Man is a collection of contradictory ideas, all of which exist within man without any feelings of uneasiness: beauty & ugliness, justice and injustice, good and bad, optimism & pessimism, wildness & intellectualism, diligence & laziness, and idealism & realism. This is undeniable. • The human attractiveness of the leader is difficult to articulate but it seems to lie in the leader’s capability to synthesize these contradictions through understanding that such a collection of contradictory ideas is the character of human nature.

© Nonaka・Toyama・Konno Source: Iizuka, A. “Jinbutsu o dou miwakeruka,” WEDGE, March 2003

Leaders who accept and internalize the contradictory existence of humans and who can accept purity and impurity are sought after.


Embracing Paradoxes

• Paradox is a way of life at Canon….Facing a paradox, we embrace it and go ahead coping with it. We are constantly on the move.

• -- Fujio Mitarai, CEO, Canon

• 




•  Ability to foster phronesis in •  others to build a resilient •  organization.



Building Distributed Leadership •  I only have two eyes. There are several ten thousands part-time

works at Seven-Eleven Japan stores. If everyone can make a judgment on his/her own, we have quite a few eyes. To do so, everyone of us have to respect the fundamental rules of business.

•  No one knows for sure how the society will change in future.

Because we don’t know, we keep tackling the difficult task to adapt to changes. Everyday, I say that the most important thing is to adapt to any changes.




Phronetic Leadership

Goodness

Explicit knowledge Tacit knowledge

Life World

Dynamic Networking of Ba

Ba Synthesis of Self and Others (shared context-in-motion)

Subjectivity Eｘperience （particular）

Pragmatism Idealism

Dialog and Practice Objectivity Language （universal）

Dis

ci-

-pl

ine


A Knowledge-Based Organization is… • An organization who practices the idealistic pragmatism which synthesizes;

• Ontology: How to be – -”For what do we live?”: the vision to the future and the commitment to it.

• Epistemology: How to know – -”What is the truth?”: the SECI spiral which synthesizes objective and subjective views.

• Creation: How one can change itself and the environment

• Management is viewed as “a way of life” rather than a tool to make money. © Nonaka・Toyama・Konno


Idealistic Pragmatist


in One Person “Intellectual Muscle”

Brain Deep Thinker

Brawn Doer


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