 Welcome back. I continue with the second part of clip 8 about knowledge in organizations. In the previous clip I talked about the knowledge in the group level in organizations. In this clip I'm going to take one step further and talk about how organizations create new knowledge and how organizations can store the knowledge that was developed and make sure that future generations also can value and learn from this information that was collected. So after this clip you'll understand how the processes of knowledge creation and innovation work and how new knowledge develops. And at the end of this clip I'll share with you some information about how knowledge storage and retrieval works in practice. Because in many cases, after a project closes, when the people go away, especially the tested knowledge tends to vanish with them. So continuing about knowledge at the group level. To learn more about knowledge creation and innovation, I'm going to take you to a theory developed by Professors Nunaka and Takuchi, two Japanese professors who went working in the United States and took with them their Japanese type of organizing in the 1980s. What they did is they brought to the management field a theory that emphasized learning in organizations or learning from what organizations do, what happens in the organization, by talking continuously about ways to improve organizations. The knowledge creation theory by Nunaka and Takuchi defines innovation as a continuous flow between tested and explicit knowledge that eventually results in new knowledge. And any new knowledge is supposed to help organizations and improve processes and actually kind of an incremental way of continuously improving your organization and learning new things. So let's have a look at knowledge creation. Knowledge creation, like we've seen in the previous slide, new knowledge is created when people share what they know, when they internalize it and when they apply it to what they learned. So the concept of knowledge transfer is very much central to the theory of Nunaka and Takuchi. The value and award of individual group and corporate knowledge grows exponentially when it's shared and increased in value with use. This means that there is benefit to organizations to organize the exchange and the transfer of knowledge between individuals. Nunaka and Takuchi developed a model that explains how this exchange between tested and explicit knowledge between individuals and individuals and groups, how that happens and how that ends up in the spiral of continuous knowledge development. I'm going to take you step by step through this process. This is the model. It's a schematic representation of how knowledge is transferred on different levels. All these processes together, they make that new knowledge is developed and that there's continuous increase in what is known in organizations. I'm going to explicate the model by highlighting the elements that contribute to it. So in essence, what you see here is the concepts, tested knowledge and explicit knowledge. So the upper side of the model represents the tested knowledge, the downside explicates the explicit knowledge and you see two people to keep it simple, individual A and individual B. I'm going to zoom into the processes that are highlighted and also explain where knowledge is shared and where knowledge is created. First, let's have a look at knowledge sharing. Knowledge sharing happens when knowledge is exchanged between two people and it actually comes down to individual learning. As you can see in the yellow process, individual A has explicit knowledge by working together with individual B, for example, observing or, for example, by having some on-the-job coaching. They learn by doing. They socialize their knowledge between each other so that one person is also able to do the tasks that the other person is doing. Imagine, for example, learning how to do a presentation. You can read books about it, but oftentimes it's just the easiest thing to do, is to watch somebody do a presentation and then maybe discuss a little bit afterwards, but what did you do exactly? And then you have some tips and tricks for doing a presentation yourself. A similar thing happens at the explicit knowledge. So explicit knowledge, you remember, those are the facts and the figures and the things that you can learn from books or from the internet and everything that's easily explained and put under words. You can put things together and, for example, create a summary of the book that you just read. That would be a way to exchange information between two people. In these two processes, there's no new knowledge created. There's an exchange of knowledge, but no new knowledge creation. There's learning happening, so one individual may develop new knowledge for that person themselves, but not for the entire group of people as a whole, because individual A, who knows about the presentations, will teach individual B. Individual B will also know about presentations, but they didn't come up with anything improved or new. That's the key to knowledge sharing, the learning part. On the individual level, there's also learning by reflection. So imagine that individual B is going to be happily doing the presentation and then afterwards these questions from the audience are tricky. How could I have done my presentation differently so that next time I can answer these questions? So these processes of continuous reflection about what you're doing give hints about where areas for improvement are. Again, this is within one person, so no new knowledge for the organization has been developed yet. Now it becomes interesting. There can be an exchange between what individual A knows on the test level about their job and tries to explicate that and explain it to individual B. So for example, imagine the individual A was the person who has had a lot of experience doing presentations and wants to find a way to improve presentations in general. So a starting point could be for individual A to explicate all the things that they do naturally, not even think about it, and then individual B's task would be to ask critical questions. So what exactly, why do you do it this way? And by trying to make all these implicit thoughts more explicit, they together can discuss how to maybe do things differently. Then in a next step, the new things that I thought of can be taken back to the presentation of person A who's trying to do something new, internalize the discussion, the point of improvement, the new ideas that come up in this brainstorm thing and try to do it in a different way. So this is actually new knowledge. It hasn't been explored before. Is it new to the entire group of all the people who are involved? This picture illustrates very nicely how Nonak and Takochi originally thought of this process of continuous knowledge exchange. What you see here is a fish diagram. A fish diagram is something that starts with defining the end product or service. So what is it that this team is responsible for? What would they like to deliver in the end, their most important product or their service? And then going back, they try to analyze together with the team all the little things that need to be done in order to deliver this end product. So you see all the side steps in the model and they illustrate everybody's contribution to the end product. And their aim is to also make people think about what they do implicitly. So what is tacit to what they do? Oh, I always first do this before that. Why do you do that? Oh, that's because somebody over there never responds to me. So they also find all kinds of tacit processes in the organization that either help or hinder the realization of the end product. So this way of thinking about contributing altogether to an end product helps to highlight all the tacit processes and helps to help each other find new ways or improvements. So the idea of total quality management is a little bit outdated, but that is what followed after the communication of this theory. And actually nowadays when you look at IT organizations and they use this process of scrum where developers come together and together they discuss how they can best serve a client with a certain software problem, actually that is exactly what is in line with the process of knowledge creation as suggested by Nona Kanta Kutchi. So the final step, the combining of new knowledge means that after such a session you come up with a new set of ideas, a new set of instructions of how this work process should be organized. This is shared between everybody in the team and then the new knowledge is actually there. They start using it, so it's going to be internalized again and then after a while you can repeat the process and try to understand where new avenues for improvement may be again lie. So the process never ends. It's a continuous spiral of improvement. If you read the book about learning organizations you'll come across this idea of learning being a spiral from individual knowledge to team knowledge to individuals and back also outside the organization. So think of this model as a continuous stream of information, continuous stream of knowledge between individuals, explicit knowledge, tacit knowledge, sharing knowledge and that leads to new knowledge. So this summarizes the final step in the knowledge creation after the knowledge has been combined and made up into new policies and new practices. Again, they are integrated in everybody's tacit knowledge because once you start using it you'll come across new things, how you can actually use it in the workplace and then it becomes tacit and part of the organization. How does this effectuate in organizations? Well, you can imagine that these knowledge processes and the way of working as suggested in the theory by Narnak and Takerchi is very important for human resource management in the context of product improvement. A nice example is the solar car racing teams by university teams of students. So every year there's a new team of students. They start off where the team last year passed and they try to make an even better solar car and try to win the competition. There are mixed teams, mixed professionals, everybody has their own knowledge. You can only move forward as a team when you combine all this knowledge, when you exchange all the tacit and explicit knowledge and try to make it into a strategy, a product, anything that actually helps you win the race. There's however an important disclaimer to this very nice suggestion that there's a continuous stream of new knowledge. Unless managers recognize the improvisations and inventive ways people use to get things done, tacit knowledge in particular will be lost. So this highlights that knowledge sharing does not happen automatically. When a team finishes, for example, such a solar team car at the end of the competition, everybody finds a job, they can do something different, what of this team's results are actually stored for the next group? And this is an important question. Usually these that are stored are the report, the final product. If you're lucky, some kind of process description. However, how to collaborate with a certain sponsor? How to address difficulties in the submission system? I just mentioned a few things. All these things are typically not stored, not written down on paper. They are in the minds of people. They are in the minds, they are shared in the team. But as long as the team is there, people will know about these things. But once this team dissolves, this knowledge will get lost. And this may pose very much troubles to the teams that continue with the project. So there are strategies to also consider the storage of tested knowledge in particular when project teams are dismantled. So knowledge storage and retrieval is about retaining the vital test knowledge, which vanishes when companies reorganize or merge or downsize. So it's not only teams that dissolve, but sometimes also the reorganizations can do a lot of damage to the storage of tested knowledge. Because when employees leave, they take their valuable knowledge with them, and nobody knows anymore, literally. Projects, when they end, many insights get lost. Knowledge gets buried on the new chunks of information. Or sometimes knowledge just vanishes because people don't use it any longer. That's also sometimes you hear organizations complain, say that they are reinventing the wheel over and over again. So some of this might come from the not effectively storing the knowledge that was developed. So from a resource-based view perspective, this is actually a loss of resources. We want to prevent this. How to? Going back to the literature. What do we know about effective knowledge storage? Especially when it comes to tested knowledge. So I want to focus on the storage of knowledge that is in the minds of individuals and is probably going to leave when individuals leave as well. Explicit knowledge. You can store it as semantic knowledge, and semantic meaning sentences, literally. You can just write it down, the product is there, the project is there, the process, the presentation, the patents. Easy to store. Usually there is some company drive where all this information can be found. Tested knowledge, however. We want to store this as episodic knowledge. Episodic means more like you want to know the stories. What happened exactly? What is the process that resulted in the end project? Stories like that. What were things that were helpful? What were things that were kind of hindering during the project? The way that we store this episodic knowledge is preferably by lessons learned. So we want to share with others, with your successors what worked and what did not. How to do this? How to gather lessons learned after a project? Well, the simplest way to do this is to organize a debriefing and make sure that the successors are already there and then you verbally explain everything that has been done. So debriefing is an important first step. It can also be keep some of the relationships for future use. So people are leaving your organization but can I call you in the future? That is a way also to keep access to tested knowledge. If this is impossible, there are systems to record and store explicated tested knowledge. So essentially what you do is you organize a lessons learned session with a team and you just record and take notes and then you store it in any repository where you want to maybe find it for future use. So what is good about in general about doing this lessons learned is that it stimulates informal learning and sharing of practices. So it's actually a good practice to do no matter if a team dissolves or not but after any project that is done to organize some informal learning about the tested processes that took part in the team. Where you see these things happen is for example in communities of practice. These are teams of experts who meet and who exchange how they do things with each other. Also it can be an important contribution to effective teamwork and of course it's again important to improve the social capital of organizations. So a big benefit of actively thinking about storage and retrieval of tested knowledge in particular is that it really contributes to the spiral of knowledge which is important for organization innovations and improvement. So this brings me to the end of this knowledge clip we talked about the use of knowledge in organizations and that it needs management you need to organize that people share knowledge both the tested and the explicit to stimulate this process of knowledge creation and you also need to think about how to store and retrieve tested knowledge in particular. So that brings me to the end of this clip and the next clip is about the next chapter which is about change management.