agilejapan2010 keynote by ikujiro nonaka: phronetic leadership
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Cultivating Leaders with Practical Wisdom
---- Scrum and Ba Building ----
Ikujiro NonakaProfessor Emeritus, Hitotsubashi University
Xerox Distinguished Faculty Scholar, UC Berkeley
The First Distinguished Drucker Scholar,
Claremont Graduate University
Visiting Professor of Center for Knowledge and Innovation Research (CKIR), Helsinki School of Economics
March 6, 2010
Copyright © 2009 Nonaka, I
The KnowledgeThe Knowledge--Creating Creating
Company and Managing FlowCompany and Managing Flow
Copyright © 2010 Nonaka, I
Cultivating Leaders with Practical Wisdom
---- Scrum and Ba Building ----
Ikujiro NonakaProfessor Emeritus, Hitotsubashi University
Xerox Distinguished Faculty Scholar, UC Berkeley
The First Distinguished Drucker Scholar,
Claremont Graduate University
Visiting Professor of Center for Knowledge and Innovation Research (CKIR), Helsinki School of Economics
March 6, 2010
Knowledge Society
�Knowledge is the only meaningful resource today.
�How knowledge behaves as an economic resource, we do not yet fully understand; we have not had enough experience to formulate a theory and to test it. We can only say so far that we need such a theory. We need an economic theory that puts knowledge into the center of the wealth-producing process. Such a theory alone can explain the present economy. It alone can explain economic growth. It alone can explain innovation. It alone can explain how the Japanese economy works and, above all, why it works.
P. F. Drucker “Post Economist Society” (1993)
Copyright Nonaka I. 2010
Copyright © 2009 Nonaka, I
Knowledge is 5
■ SubjectiveBased on belief, context-specific
■ Process-relational Created in social interactions
■ AestheticRelentless pursuit of truth, goodness, and beauty
■ Created through practice
Hence, we define Knowledge as:
“A dynamic human process of justifying
personal belief towards the truth.”
Copyright Nonaka I. 2010
Two Types of Knowledge
Spiral up through Spiral up through dynamic interactiondynamic interaction
AnalogAnalog--Digital SynthesisDigital Synthesis
Objective and rational knowledge that can be expressed in words, sentences, numbers, or formulas (context-free)
Theoretical approachProblem solvingManualsDatabase
Subjective and experiential knowledge that can not be expressed in words, sentences, numbers, or Formulas (Context-specific)Cognitive Skills
beliefsimagesperspectivesmental models
Technical Skillscraftknow-how
Tacit Knowledge Explicit Knowledge
Tacit and Explicit Knowledge- A metaphor: Iceberg -
Explicit
Tacit~~~~~~~~~~~
Essence of the metaphor is to understand and
experience an event/thing from the view of an
different event/thing.
(Source: Lakoff, G., & Johnson, M. (1980). Metaphors we live by. Univ. of Chicago)
Tacit – Explicit Spiral
- Toyota Way -
Source: Okuda, H & Zhu, J.R. (2007). Chikyu kigyo Toyota ha chugoku de naniwo mezasunoka; Okuda Hiroshi no
Toyota-ism [What global-company Toyota aims at in China: Toyota-ism of Hiroshi Okuda]. Tokyo: Kadokawa
Gakugei Shuppan.
(Manual can only provide explicit knowledge; at
the base, there is the invisible tacit knowledge
such as hunch or knack.)
With IT, more tacit knowledge may be
converted to explicit knowledge. While the
conversion occurs, new tacit knowledge
continue to emerge. President Watanabe
says, “with the spiral-up of tacit and explicit
knowledge, things go well.”Hiroshi Okuda, Former Chairman of Toyota
Organizational Knowledge CreationSECI Model
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 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
relationships among
the concepts
8. Editing and
systemizing explicit
knowledge
Exp
licit
Explicit
Tacit
Tacit Tacit
Exp
licit
Explicit
Tacit
SocializationSocialization ExternalizationExternalization
InternalizationInternalization CombinationCombination
OG
E
I
Environment
Individual
I G
G
G
G
Org.
E
I
I
I
I
I
Group
IE O
Copyright Nonaka I. 2010
Innovation as SECI Spiral
Empathize with the reality through actual experience (Socialization), condense the essence of awareness into concepts (Externalization), relate the concepts and systemize (Combination), create value in the form of technology, products, software, services and experiences and embody the knowledge (Internalization), and at the same time stimulate the emergence of new knowledge in the organization, market and environment, and spiral up to the Socialization step.
© Nonaka, I.
The Knowledge Leadership=
Drives the dynamic process of knowledge
creation by:
–providing knowledge vision and driving objective
–developing and promoting the sharing of
knowledge assets
–creating, energizing, and connecting ba
–enabling and promoting the continuous spiral of
knowledge creation through dialogues and
practices
At the base of such leadership is phronesis
Copyright Nonaka I. 2010
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.
�Can acquire only through high quality
direct experiences with contemplation.
Copyright © 2009 Nonaka, I
Abilities to Constitute Phronesis
1. Ability to make judgment on goodness.
2. Ability to create ba.
3. Ability to grasp the essence of particular
situations/things.
4. Ability to express the essence.
5. Ability to realize the concepts.
6. Ability to foster phronesis in others.
Copyright Nonaka I. 2010
Phronetic Leadership1. Ability to make judgment on goodness
Every sort of expert knowledge and every inquiry, and similarly every action and undertaking, seems to seek some good.
Aristotle, Nicomachean Ethics
Example: Self-sufficient values such as happiness and self-actualization.
Internal Good: Realized in the course of trying to achieve those standards of excellence (artisanship).
MacIntyre
Copyright © 2009 Nonaka and Toyama
Knowledge Vision
Essential Questioning:
“What do we exist for?”“Why does the society need us?”
“What value can we uniquely provide?”
“What do we want to be?”
“Where should we live?”
A vision that transcends the existing boundary.
“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.
Copyright Nonaka I. 2010
Phronetic Leadership
2. Ability to create ba
Imaginative capacity to understand and empathize with others through daily verbal and nonverbal communication, to read the situation to judge the best timing for interaction, and to elicit empathy in return.
Copyright Nonaka I. 2010
Ba: Sharing “here-now”
relationship
Shared Context Shared Context
in Motionin Motion
Ba(場)(場)(場)(場)
Intersubjectivity
Open Close OpenClose
Individual contexts are shared at “here now” context of Ba.
Shared context becomes the base of emerging knowledge.
Copyright Nonaka I. & A.Hirose 2010
Individual
Ba: Interpenetration of environment,
structure and individual
Structure
Conventional Theory Process View
Environment
Ba
Here-now
relationships
in actionIndividual
Structure
Environment
Copyright © 2009 Nonaka, I & R. Toyama
BaBa is formed in various is formed in various
spacespace--timetime
Meeting, drinking
Informal organization
Project teams
Office, factory, shop floor
Formal organization, system
E-mail, TV conference
Real
Virtual
故
Share the “ba” for
three days and
three nights
Thorough Thorough
discussions that discussions that
break the break the
individual barriers individual barriers
(interaction)(interaction)
Leap the idea
Construct the
concept
“Waigaya” at Honda
Individual
Team
© Nonaka, I.
“Waigaya” at HondaCompany prepare the ba (good hotel and good food)
• Out of the daily work environment
Day 1: Conflict between the individuals
• Start with “bad mouth-ing” the boss; frustration and conflicts
• Thorough discussions lead to conflict but there is no escape
• As the time passes, then superficial explicit knowledge runs out and individual barrier disappears
Day 2: Mutual understanding and acceptance
• Accept the difference, understand the beliefs of the others
• Accept the opinions of the others
Day 3: Leap of the minds
• With constructive thinking, leap of the minds and concepts will happen
Copyright Nonaka I. 2010
Inter-subjectivity of BaBa is dynamically created from the 3 steps of consciousness
3 steps of consciousnessSynthesis of senses: Like the relationship of mother and
child, sharing the vivid present before subject-object separation; state of passive inter-corporality
Synthesis of intelligence: Creating meaning in the form of “I-It relationship” from one’s intention and consciousness; state of active iner-subjectivity
Synthesis of senses and intelligence: Encountering the other as a whole “I” in the higher dimension of “I-Thou relationship”; senses are not captured to the detachment from the other, not restricted to the self, and open to the other
Source; Yamaguchi, I. (2005). From Existence to Creation
© Nonaka, I.
Which Hand is Touching?Merleau-Ponty
When I press my two hands together, it is not a matter of
two sensations felt together as one perceives two objects
placed side by side, but of an ambiguous set-up in which
both hands can alternate the roles of “touching” and “being
touched”5. in this bundle of bones and muscles which my
right hand presents to my left, I can anticipate for an instant
the integument or incarnation of that other right hand, alive
and mobile, which I thrust towards things in order to
explore them. The body catches itself from the outside
engaged in a cognitive process; it tries to touch itself while
being touched.
Phenomenology of Perception, trans. Colin Smith, p.93
Copyright © 2010 Nonaka, I
Discovery of “Mirror Neurons”– Socialization in the Neuroscience -
“Mirror neurons” are particular type of neurons that activate
when we see an individual performs an action. Discovery
was that when we see someone performing an action or
showing a feeling, part of our motor system becomes active
‘as if’ we were executing that very same action or the
feeling that we are observing. Various actions are coded in
mirror-neuron system, so when we see other’s action, we
can instantly understand and imitate it and even understand
it’s intention.Source: Iacoboni, et al. (2005), Rizzolatti (2005)
Copyright © 2010 Nonaka, I
Copyright Nonaka I. 2010
Founder Vincenzo
Founder’s son Andrea
Copyright © 2009 Nonaka, I & R. Toyama
Good Ba for Knowledge Emergence
1. Self-organizing with self-transcending goal
2. Direct sharing of senses, feelings and emotions (inter-corporeality) Sense of social Capital –care, love, trust, and safety
3. Shared objectives and commitment, not on-lookers
4. Self-awareness in the relationship with others (meta-recognition)
5. Permeating boundary with moving centers
6. Metaphor of sphere: Diversity of knowledge and efficient interactions (requisite variety)
Scrum Approach“The New New Product Development Game”
Source: Takeuchi, H. & Nonaka, I. (1986). The New New Product Development, Harvard Business Review January-February, 1986.
Sequential (A) vs. Overlapping (B and C) phases of development
1 2 3 4 5 6
1 2 3 4 5 6
1 2 3 4 5 6
A
B
C
Phase
Phase
Phase
Scrum ApproachMoving the Scrum downfield
1. Built-in instability
Members are given a wide measure of freedom with extremely challenging goal
2. Self-organizing project teams
Start from “zero information” as in the start-up company; members share
autonomy, self-transcendence, and cross-fertilization
3. Overlapping development phases
Development phases overlap and create “shared division of labor” where each
member feels responsible for the whole project
4. “Multilearning”
Learning occurs in two dimensions; multi-level and multi-functional
5. Subtle control
Emphasize on self-control, control by peer pressure and control by love
6. Organizational transfer of learning
Learn and unlearn the past successes and failures through osmosis
Source: Takeuchi, H. & Nonaka, I. (1986). The New New Product Development, Harvard Business Review January-February, 1986.
© Nonaka・Toyama
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.
© Nonaka, I
Small World Networking
“Asakai ”
((((Executive Early Morning Meeting))))
Management Strategy
Committee
Executive Management
Meeting
President
Luncheon MeetingOverseas Sales Subsidiary
President Meetin
g
Domestic Manufacturing Subsidiary
President Meeting
Executive
Advisory
Committee
Management
Reformation
Committee
Annual briefing to President
by business/functional divisionGeneral M
anagers
Meeting
New Year Presidential Address
New Year
President Visits to
Domestic Facilities
Presidents Award
President
home page
“Asakai ”Rewiring the multilayered Ba
Creating a Big Story: Toyota Prius
Zi (G21)
(Planning)
Calty Design Research
(Exterior Design)
BR-VF
(Hybrid System)
2nd Vehicle Tech Div.(Brakes)
Drive-train Tech Div.
(Hybrid transaxel)
1st VehicleTech Div.
(Suspension) 2nd EngineTech Div.(Engine)
EV Development
(Motor, Battery)
2nd & 4thElectronics Tech Div.
(Inverter)
Panasonic EV
Energy
© Nonaka, I.
Knowledge Ecosystem: Organic Configuration of Ba
CustomerGovernment
Supplier
CompetitorFirm
University
Local Communities
Copyright Nonaka I. 2010
Phronetic Leadership
3. Ability to grasp the essence of particular situations/things
The ability to recognize the constantly changing situation correctly, and quickly sense what lies behind phenomena to envision the future and decide on the action to be taken.
God is in detail
Copyright Nonaka I. 2010
Reality and ActualityRealitySubstance: an existing substance or object that could be observed.
Can be recognized and managed by logic.
Actuality
Action: a situation in
progress
Can only be grasped by those committed to and dwelling in the actual, situated experience, with the five senses and through empathy with others.
Bin Kimura, 1994
Honda 3-Gism: Be at the actual place of work (genba), know the actual product and situation (genbutsu and genjyou), be realistic (genjitsuteki).
Copyright Nonaka I. 2009
Contemplation in Action:Indwelling in Actuality with Deep Thinking
“I can see many things
when I see a machine. How
can we maneuver through
that curve? We should do
this, we should do that....
Then I think about the next
machine. We can make a
faster machine if we think
like this, and so on. It’s a
natural progress into the
next step.”
- Soichiro Honda
Source: Honda Motor Corporation
(Picture at the Automobile Hall of Fame, Detroit)
Copyright Nonaka I. 2010
Copyright Nonaka I. 2010
Phronetic Leadership
4. Ability to express the essence
The ability to conceptualize and articulate
subjective ideas in clear language, link
these ‘micro’ concepts to a macro historical
context and convincingly articulate them as
vision and story for the future.
Copyright Nonaka I. 2010
Concept Building: Dialoguing on the Spot
Soichiro Honda
Drawing on
the floor
Words and
actionsBy articulating into
language, we
clearly understand
what we are
thinking
Source: Honda Motor Corporation
Automobile Hall of Fame (Detroit)
Copyright Nonaka I. 2010
Phronetic Leadership5. Ability to realize the concepts
The ability to bring people together and
spur them to action, combining and
synthesizing everyone’s knowledge and
efforts in pursuit of the goal, by choosing
and utilizing the means and rhetoric (the art
of effective or persuasive speaking or
writing) suitable to each particular situation
with shrewdness and determination.
Why Practical Wisdom is important- Reasoning - in - Context -
Essence of Management: Making the right judgment and
taking action in the interactions of particular context (time,
space and relationship)
Center of decision making is a process of reasoning and
justifying the truth through dialogue and practice in the
competing objectivity and interpretations.
Basis of decision making is not abstract and subjective
theory or quantitative variables; but the sensitivity to the
practical context of the problem
© Nonaka I.
Copyright Nonaka I. 2010
Phronetic Leadership
6. Ability to foster phronesis in others
The ability to create a system of distributed
phronesis by fostering and transferring the
existing phronetic capabilities of individuals to
others to build a resilient organization which
can respond flexibly and creatively to any
situation to pursue its own good.
Copyright Nonaka I. 2010
System to distribute phronesis
- LPL and PL to nurture Honda DNA -
LPLIn charge of
development
Engineering
PLTest PL Design PL
●Engine
●Body
●Suspension
●Rigging
5 etc
●Engine
●Wind-tunnel
●Crash
●Emission
●Durability
5 etc
● Layout
● Exterior
● Interior
● Color
● Design data
● Design model
5 etc
Source: Honda Motor Company internal material
Copyright Nonaka I. 2010
Middle-up-down Knowledge-creation
Process
Solving
contradiction
ContradictionCross-leveling
of KnowledgeReality (What is)
(Top)
Mid-range theory
(Middle)
Grand Theory (What ought to be)
(Front-line)
Common
Good
CommonCommon
GoodGood
Explicit KnowledgeExplicit Knowledge
Tacit KnowledgeTacit Knowledge
Dialogue and Practice
Phronetic Leadership
Subjectivity
Experience
Particular
Pragmatism
Objectivity
Language
Universal
Idealism
Multi-la
yere
d N
eto
work
Kata
(Creative Routine)
Sensitivity
Ba
Copyright Nonaka I. & T. Hirata 2010
Idealistic Pragmatist:
Contemplation in ActionBrain
Deep Thinker
Brawn
Doer
in One Personin One Person““Intellectual MuscleIntellectual Muscle””
Relentless Pursuit of Common GoodRelentless Pursuit of Common Good
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