The Urgent Need to Protect Tacit Knowledge

A key to Japanese manufacturing prowess is kaizen, the discipline of continuous improvement grounded in worker involvement partnering with management to accomplish program goals. Inherent with kaizen is gemba, meaning “the actual place,” precisely where the work is done. When people design and build products convene, they exchange ideas, develop best practices, and share what they have learned. A term for such lessons is tacit knowledge, meaning the “knowledge behind the knowledge.”

Today tacit knowledge is less prevalent in management discussions than in the nineties. But that is changing. A recent Bartleby column in The Economist sketched the reason why. “All organisations face the problem of storing and transferring knowledge so that newcomers know what’s what, lessons are learned from successes and failures, and wheels are not constantly being reinvented. An ageing workforce adds to the urgency of training inexperienced hires before the old hands leave the building.”

Tacit Knowledge

Examples of tacit knowledge are what skilled tradespeople practice daily. A licensed electrician has passed the certification courses, but their actual knowledge is how to apply it to the workplace situation. That only comes from their apprenticeship and journeyman experiences. In short, you can read the diagram, but making it work requires expertise honed from experience. Electricians possess tacit knowledge.

Every discipline needs tacit knowledge. With such knowledge, things get done. 

One of the foremost thinkers in the area of tacit knowledge is Ikujiro Nonaka. “Tacit knowledge is personal, context-specific, and therefore hard to formalize and communicate,” wrote Nonaka. “Explicit or ‘codified’ knowledge, on the other hand, refers to knowledge that is transmittable in formal, systematic language.”

“By definition, tacit knowledge is knowledge that we aren’t aware we have. So it is hard to surface,” says Dan Denison, a founding partner of Denison Consulting and professor emeritus at IMD in Lausanne, “Ever hear the phrase, he (or she) has forgotten more than I’ll ever know? That’s an acknowledgment that someone has tacit knowledge that they aren’t aware of and that it is powerful.” 

In the mid-nineties, Denison was a visiting professor studying with Nonaka and his colleagues at Hitotsbashi University in Tokyo. He shares a story that Nonaka tells about what Mitsubishi when it was working on the development of bread-making machines. “The early ones burned the bread on the outside and left it gooey on the inside,” says Denison.

 Mitsubishi sent engineers to observe how pastry chefs worked. The engineers “discovered that the pastry chefs used a twisting and stretching technique, rather than just stirring up the dough.” The design team built a machine that could twist the dough, and it worked well. “Surfacing tacit knowledge often means using something like an apprentice model to get started.”

With Hirotakei Takeuchi, Nonaka developed the SECI model of knowledge transformation via socialization, externalization, combination, and internalization. The SECI model helps organizations translate their implicit knowledge into explicit knowledge that can be shared and practiced. [The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation is a seminal book on tacit knowledge.]

Addressing the Problem

With the Boomer generation exiting the workplace in droves, how can you ensure that you and your team embrace tacit knowledge? Here are some suggestions.

Create awareness. Tacit knowledge resides in the experience of those doing the job. For this reason, managers need to identify who on the team knows what and enable them to practice what they do best. 

Share it. Mentoring is a perfect way to disseminate knowledge. Tradesmen excel at doing this with on-the-job training. Junior technicians are paired with the veterans to learn “the right way” to do things. 

Improve upon it. Tacit knowledge is generative. It feeds upon itself. Once someone has gained the know-how to do the job, they can share and improve it. That practice is the key to learning within kaizen. Never is tacit knowledge more important than now as we integrate AI into our daily work processes. 

Make It Work

Tacit knowledge is not novel; it is not innovative in itself, but without it, innovation fails – or at least is much more complicated – because you are always starting from scratch, metaphorically redesigning the wheel by ignoring it is already there. 

Many organizations invite former employees to rejoin as consultants. This is a good solution in principle, but the challenge is to integrate the practice of tacit knowledge into daily management.

“In an economy where the one certain is uncertainty,” wrote Professor Nonaka, “the one sure source of lasting competitive advantage is knowledge.” Every organization’s challenge is to capture, nurture, and sustain that knowledge.

First posted on 3.20.24