Harvard Business Review
ON
Knowledge Management
Yan An
MBA and MS-MIS 2008
February 19, 2007
Today's Agenda

The Coming of the New Organization
◦ By Peter F. Drucker

The Knowledge-Creating Company
◦ By Ikujiro Nonaka

Building a Learning Organization
◦ By David A. Garvin
The Coming of the New Organization
Originally Published in 1988

Who is Peter F. Drucker?
◦
◦
◦
◦
◦
Writer
Teacher
Social Ecologist
Urged to give workers more control
Argued turn governmental functions over to
private enterprises
◦ Foresaw the 1970’s Japan competition and
inflation in 1940’s
In the Next 20 Years (from 1988)
◦ Large Businesses will Transform:
 1/2 of managements
 1/3 of managers
 Composed largely of specialists
 Knowledge based
 Self directed and disciplined
◦ What Directs the Transformation:
 Information Technology
Making Data into Information

Requires Knowledge
◦ Specialization
◦ Specialists are found in operations
◦ People without operating responsibilities
shrinks drastically

Cutting number of management levels and
managers
◦ Information does their jobs
Information Based Corporation
Knowledge will be at the bottom
 Require clear, simple, common objectives
that translate into particular actions
 Executives asks:

◦ “What information is for them, what data
they need?”

Everyone else asks:
◦ “Who depends on me for information? And
on whom do I depend?”
Challenges to become Information Based
Require to change old habits and acquire
new ones
 Threaten the jobs and status of the longserving, middle-aged people in the middle
management
 The more successful a company has been,
the more difficult this process is to be

Solutions to the Challenges
1.
2.
3.
4.
Developing rewards, recognition, and
career opportunities for specialists
Creating unified vision in an organization
of specialists
Devising the management structure for
an organization of task forces
Ensuring the supply, preparation, and
testing of top management people
The Knowledge-Creating Company
Originally Published in 1991

Introduction of Ikujiro Nonaka
◦ Five and a half years at UC Berkeley
 MBA
 Ph.D. In Business(1972)
 Professor of Knowledge
What does Knowledge do?
The one sure source of lasting
competitive advantage is knowledge
 Successful companies are:

◦ Consistently create new knowledge
◦ Quickly embody knowledge in new products
◦ “Knowledge-Creating” company
Western Vs. Japanese views of
Knowledge Creation

West (U.S.)
◦ Organization as a machine
for “information
processing”
◦ Useful Knowledge:
 Formal
 Systematic
 Codified procedures
 Universal principles
 Quantifiable
 Increased efficiency
 Lower costs

Japan
◦ Depends on tapping the
tacit, subjective insights,
and intuitions of individual
employees
◦ Organization is a living
organism
◦ Inventing new knowledge is
a way of behaving
◦ Everyone is knowledge
worker - Entrepreneur
The Spiral of Knowledge
-New knowledge always begins with the individual

Tacit Knowledge
◦ Highly personal
◦ Hard to formalize and articulate
◦ Deeply rooted in an individual’s commitment

Explicit knowledge:
◦ Formal
◦ Systematic
◦ Can be easily communicated and shared
Spiral of Knowledge Continues
Story: Matsushita Electric Company’s breadmaking machine:
 Problem: Unable to knead dough
correctly
 Solution: an employee trained with a
professional head baker to study his
kneading technique
Spiral of Knowledge Continues
Building a Learning Organization
Originally Published in 1993
David A. Garvin
 Professor of Business Administration at Harvard
Business School
Learning Organizations

Continuous improvement requires a
commitment to learning

Many scholars including Ikujiro proposed
how to improve an organization, however,
there is no framework for action
Three Ms are left unsolved:

Meaning
◦ Well-grounded definition of learning
organizations is required

Management
◦ Clearer guidelines for practice are needed

Measurement
◦ Need better tools for assessing the rate and
level of learning
Definition of a Learning Organization
A learning organization is an
organization skilled at creating,
acquiring, and transferring knowledge,
and at modifying its behavior to reflect
new knowledge and insights
5 building Blocks of Learning
Organizations
1.
Systematic problem solving



2.
Experimentation

3.
Relying on the scientific method
Insisting on data
Using simple statistical tools
Systematic searching for and testing of new
knowledge (using the scientific method is
essential)
Learning from past experience


Review their successes and failures
Access and record the lessons (Accessible)
5 building Blocks of Learning
4.
Learning from others
Benchmarking


Learn from the customers




5.
NOT industrial tourism
Up-to-date product information
Competitive comparisons
Immediate feedback
Transferring Knowledge


Must spread quickly throughout the organization
Measuring learning
If you can’t measure it, you can’t manage it
Learning and experience curves
 Half-life curve

◦ Time it takes to achieve a 50% improvement
in a specified performance measure.
Q &A
References

Drucker’s Impact on Leadership Network
◦ http://www.pursuantgroup.com/leadnet/advan
ce/nov05o.htm

Knowledge has to do with truth,
goodness, and beauty (From the
conversation with professor Ikujiro
Nonaka, Tokyo, Japan, 1996)
◦ http://www.dialogonleadership.org/Nonaka1996cp.html