Ikujiro Nonaka, Leading Japanese Scholar and 'Professor of Knowledge'
Presents Distributed Phronesis as Strategy for Knowledge-Creating Firms
“Strategy as Distributed Phronesis” was the topic of a presentation delivered on February 12 to Drucker faculty and students by Ikujiro Nonaka, Professor Emeritus of the Graduate School of International Corporate Strategy, Hitotsubashi University, and currently Xerox Distinguished Professor in Knowledge at The Haas School of Business at the University of California, Berkeley. Nonaka is the first to hold the nation’s first-ever professorship dedicated to the study of knowledge and its impact on business
Nonaka defined phronesis as the strategy of practical wisdom and reasoning that promotes making decisions and taking actions that serve the common good. Describing it as the ability to find “right answers” in particular situations that include a level of reasoning and improvisation from synthesizing particulars and universals, he said, “It is the high-quality tacit knowledge acquired by experience and guided by values and ethics.” Presenting the Organizational Knowledge Creation SECI Model of dialogue and process to illustrate interaction between explicit and tacit knowledge, Nonaka identified six attributes significant to phronetic leadership practices: 1) Ability to make a judgment on goodness (actions that serve the common good); 2) Ability to share contexts with others to create shared sense (empathy, understanding emotions of others); 3) Ability to grasp the essence of particular situations/things; ( 4) Ability to reconstruct particulars into universals using language/concepts/narratives; 5) Ability to use any necessary means well to realize concepts for common goodness (being able to see the entire picture, understanding others and timing interactions); and 6) Ability to foster phronesis in others to build a resilient organization (enabling others to understand phronesis through dialogue and to practice it at various Ba (human interaction that provides a platform to advance individual and/or collective knowledge).
In answering the question: “Why Do Firms Differ?,” Nonaka said, “Companies differ in how they envision the future and the process by which they create future.” Saying strategy is knowledge, he illustrated the spiral effect of strategic phronesis in a knowledge-creating company—expanding on the advantages of phroenesis which includes synthesizing of vision, dialogue, shared context, practice, knowledge assets and the ability to develop an ecosystem of knowledge to create knowledge.
Nonaka pointed to the phronetic management philosophies of specific companies including Souichiro Honda, Canon and Seven-Eleven Japan, in which strategies of distributed phronesis included practices of: 1) Respecting individuals of the company—from frontline to factory worker (Souichiro Honda); 2) Developing Distributed Leadership--adapting to changes and empowering individuals to make his/her own judgments in given situations (Seven-Eleven Japan); 3) Moving forward in the face of paradox—making political judgments by understanding others and timing interactions (Canon); 4) Dialoguing on the spot—reconstructing particulars into universals using language/concepts/narratives (Souichiro Honda and Canon); 5) Seeing reality in a dynamic context—focusing on the future and finding solutions in each particular situation context—(Seven-Eleven Japan); 6) Judging by philosophy—seeing technology as a means to serve people with philosophy as the underlying foundation. Nonaka identified the basis of phronesis as being grounded in humanity, peak experience, practice and tradition.
Nonaka advised that knowledge-creating firms practice synthesizing the company’s vision of the future and commitment to it (ontology-how to be); search for truth by synthesizing objective and subjective views using the SECI spiral (epistemology-how to know); and focus on how one can change itself and the environment (creation).
He concluded saying, “Knowledge-based management is a process that promotes knowledge—teaching judgment and turning it into wisdom—viewing management as a way of life, rather than a tool to make money.”
Nonaka’s book, The Knowledge Creating Company, is reported to be one of the most widely-referenced management tools by leading companies throughout the U.S. and Japan.
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