The Knowledge Creating Company - Nonaka & Takeuchi
In an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge. When markets shift, technologies proliferate, competitors multiply, and products become obsolete almost overnight, successful companies are those that consistently create new knowledge, disseminate it widely throughout the organization, and quickly embody it in new technologies and products. These activities define the “knowledge-creating” company, whose sole business is continuous innovation.
To Western managers, the Japanese approach often seems odd or even incomprehensible. Consider the following examples.
- How is the slogan “Theory of Automobile Evolution” a meaningful design concept for a new car? And yet, this phrase led to the creation of the Honda City, Honda’s innovative urban car.
- Why is a beer can a useful analogy for a personal copier? Just such an analogy caused a fundamental breakthrough in the design of Canon’s revolutionary mini-copier, a product that created the personal copier market and has led Canon’s successful migration from its stagnating camera business to the more lucrative field of office automation.
- What possible concrete sense of direction can a made-up word such as “optoelectronics” provide a company’s product-development engineers? Under this rubric, however, Sharp has developed a reputation for creating “first products” that define new technologies and markets, making Sharp a major player in businesses ranging from color televisions to liquid crystal displays to customized integrated circuits.
In each of these cases, cryptic slogans that to a Western manager sound just plain silly—appropriate for an advertising campaign perhaps but certainly not for running a company—are in fact highly effective tools for creating new knowledge. Managers everywhere recognize the serendipitous quality of innovation. Executives at these Japanese companies are managing that serendipity to the benefit of the company, its
To Western managers, the Japanese approach often seems odd or even incomprehensible. Consider the following examples.
- How is the slogan “Theory of Automobile Evolution” a meaningful design concept for a new car? And yet, this phrase led to the creation of the Honda City, Honda’s innovative urban car.
- Why is a beer can a useful analogy for a personal copier? Just such an analogy caused a fundamental breakthrough in the design of Canon’s revolutionary mini-copier, a product that created the personal copier market and has led Canon’s successful migration from its stagnating camera business to the more lucrative field of office automation.
- What possible concrete sense of direction can a made-up word such as “optoelectronics” provide a company’s product-development engineers? Under this rubric, however, Sharp has developed a reputation for creating “first products” that define new technologies and markets, making Sharp a major player in businesses ranging from color televisions to liquid crystal displays to customized integrated circuits.
In each of these cases, cryptic slogans that to a Western manager sound just plain silly—appropriate for an advertising campaign perhaps but certainly not for running a company—are in fact highly effective tools for creating new knowledge. Managers everywhere recognize the serendipitous quality of innovation. Executives at these Japanese companies are managing that serendipity to the benefit of the company, its