Takomichi

HITOTSUBASHI ON KNOWLEDGE MANAGEMENT CHAPTER 1

KNOWLEDGE CREATION AND DIALECTICS
HIROTAKA TAKEUCHI AND IKUJIRO NONAKA

The more turbulent the times, the more complex the world, the more paradoxes there are. Contradictions, inconsistencies, dilemmas, and polarities abound in this day and age. Successful companies are not only coping with paradox, but taking advantage of it. 1 F. ScottFitzgerald once pointed out that “the test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time, and still maintain the ability to function.” 2 A first-rate intelligence will start with the premise that life is made up of opposites: male and female, life and death, good and bad, young and old, work and home. One has to live with paradox, accept it, cope with it,make sense of it, and use it to find a better way. Joseph Schumpeter can be singled out as someone who was able to hold two opposing ideas in mind at the same time. Schumpeter postulated “dynamic disequilibrium” as the economy's only stable state, and “creative destruction” on the part of innovators as the economy's central driving force. A surge of interest in Schumpeter of late is a reflectionof
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See Charles Handy, The Age of Paradox (Boston: Harvard Business School Press, 1994), to gain a better understanding of the paradoxes confronting us. Quoted in James C. Collins and Jerry 1. Porras, Built to Last (New York: HarperBusiness, 1994), p. 45.

our times. What is interesting to note is the fact that his postulates are the antithesis of prevailing economic theory based on theidea of equilibrium as a healthy economy's norm and on monetary and fiscal policies as the drivers of a modern economy. A first-rate mind now has the opportunity of holding two opposing views - Schumpeter's thesis and the antithesis of modern-day economics - at the same time and using them to find a better way. Living with paradox is neither comfortable nor easy. Charles Handy described it asfollows: It can be like walking in a dark wood on a moonless night. It is an eerie and, at times, a frightening experience. All sense of direction is lost; trees and bushes crowd in on you; wherever you step, you bump into another obstacle; every noise and rustle is magnified; there is a whiff of danger; it seems safer to stand still than to move. Come the dawn, however, and your path is clear; thenoises are now the songs of birds and the rustle in the undergrowth is only scuttling rabbits; trees define the path instead of blocking it. The wood is a different place. 3 If we can bring light to the paradoxes, then the world could look different and less threatening. In fact, that is what successful companies are doing. Corporate success has never been more fragile. Only a few companies haveproven themselves capable of changing as fast as the environment around them and dealing with the complexities surrounding them. One of the main reasons that companies fail today is their tendency to kill paradoxes by sticking to old routines created by their past success.
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Charles Handy (1994), p. 14.
HIROTAKA TAKEUCHI AND IKUJIRO NONAKA: KNOWLEDGE CREATION AND DIALECTICS (0507; p. 2 )

Instark contrast, a new breed of companies has emerged as leaders in this day and age of paradox. These companies, which we are calling “dialectic” companies, are not just passively coping with paradox. They are actively embracing opposites. They are positively cultivating contradictions. They are passionately using paradoxes as an invitation to find a better way. PARADOX AND KNOWLEDGE Theonce-in-a-200-year shift from the Industrial Society to the Knowledge Society has changed the way we view paradox. Paradox was something to be eliminated in the Industrial Society. It went against the very essence of what Frederick Taylor was trying to achieve. In order to increase efficiency in production, he prescribed IIscientific” methods and procedures to organize and operate work, the most...