strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
 / Winter 2008 /Issue 53(originally published by Booz & Company)


The Practical Wisdom of Ikujiro Nonaka

Inside the Petri Dish
In person, Nonaka-Sensei (as students and colleagues call him, using the Japanese honorific for teacher) is a small, quiet man, reticent but full of warmth, with an engaging and unexpectedly impish sense of humor that comes through despite his heavily accented English. He is passionate in debate and eager to engage in the kind of spontaneous and direct exchange that he advocates in his writing.

That enthusiasm came across in August 2008 in Oahu, Hawaii — at the JAIMS facility on the eastern end of the island and in the lush gardens of Waikiki’s Halekulani Hotel — when Ikujiro Nonaka expanded upon the course of his work. After talking about a wide variety of subjects, Nonaka told his interviewer that they were creating ba, a Japanese term that describes a field or space where people freely and openly share what they know in the service of creating something new.

Ba resembles the concept of “flow” as set forth by psychologist Mihaly Csikszentmihalyi: It is the mental state that occurs when a person is fully immersed in whatever he or she is doing. But unlike flow, ba is never solitary; it exists among two or more people. As Nonaka says, “In ba, there is no you or me, there is only us, sharing a here-and-now relationship.” Ba can occur in a work group, a project team, an ad hoc meeting, a virtual e-mail list, or at the frontline point of contact with customers. It serves as a petri dish in which shared in­sights are cultivated and grown.

Companies can foster ba by designing processes that encourage people to think together. For example, at the Toyota Motor Corporation, an exercise called the “five whys” enables employees to diagnose problems, as depicted this way in Managing Flow:

  1. Why is there [a problem with overstock]?
    Because we produced excess parts.
  2. Why did we do that?
    Because we were told to produce them.
  3. Why was this order given?
    Because we honor [only] the front end of the production cycle.
  4. Why do we do so?
    Because our production line is based on a push system, where the front end defines needs and sets goals.
  5. Why doesn’t the back end have input?
    Because it has no way to communicate its needs.

After this methodical drilling down reached that fifth why, division leaders understood the problem much better; they ultimately redesigned the production line to signal more effectively how much stock to pull from the front line. Most factories would have tried to solve the overstock problem by reprimanding the frontline individuals who produced excess parts, but Toyota, by persistently drawing forth the tacit knowledge of people involved, was able to identify the more fundamental kinks hidden in the system.

As Nonaka points out, “Why is ultimately a question of purpose: Why do we exist? In most organizations, people are not encouraged to keep asking questions.” As a result, he says, people resign themselves to living with difficulties that they could actually resolve if they had “a way to frame their knowledge within a larger solution.”

Many leaders in the quality movement have noted the difficulty that Western companies have adopting ba in daily practice. (See, for example, “Jeffrey Liker: The Thought Leader Interview,” by Jeffrey Rothfeder, s+b, Summer 2008.) Nonaka believes that the problem is rooted in the scientific tradition that has prevailed in the West since the Enlightenment. Westerners generally esteem explicit or theoretical knowledge, which Aristotle called episteme, over tacit or embodied knowledge, which he called techne. Episteme can be delivered in a training session or absorbed intellectually: 10 steps for organizational change, four components of a balanced scorecard, seven habits of highly effective people. Techne, by contrast, exists in subjective, or even sub­liminal, awareness. According to Nonaka, this type of knowledge cannot be completely codified, universalized, or mea­sured scientifically because it is inseparable from the human beings who possess it. It must be communicated through informal apprenticeship or one-on-one guidance: How do you do that? Here, let me show you.

Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store



  1. Aristotle, Nicomachean Ethics, translated by Terence Irwin (Hackett, 1999): Original source on phronesis and other concepts that Nonaka draws upon.
  2. Denise Caruso, “The Real Value of Intangibles,” s+b, Autumn 2008: The case for standards for appraising the worth of nonphysical assets like brands, human capital, and tacit knowledge.
  3. Kevin Dehoff and John Loehr, “Innovation Agility,” s+b, Summer 2007: Knowledge creation lies at the heart of Toyota’s groundbreaking product development process.
  4. Peter Drucker, Adventures of a Bystander (HarperCollins, 1991): Autobiography of the great management writer, with a chapter on the Polanyi family.
  5. Michael Farber, Tom Greenspon, and Jeffrey Tucker, “The Practical Visionary,” s+b, Spring 2008: The new role of the chief information officer may make it easier to implement knowledge management as a process centered in human conversation.
  6. Tim Laseter and Rob Cross, “The Craft of Connection,” s+b, Autumn 2006: Discusses how organizational network analysis is helping companies share knowledge worldwide, one natural broker at a time.
  7. Ikujiro Nonaka and Hirotaka Takeuchi, The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation (Oxford University Press, 1995): Nonaka’s first major inside look at knowledge creation, primarily at Japanese companies.
  8. Ikujiro Nonaka, Ryoko Toyama, and Toru Hirata, Managing Flow: A Process Theory of the Knowledge-Based Firm (Palgrave, 2008): In-depth theory of knowledge-based management with an emphasis on the practical wisdom called phronesis.
  9. Jeffrey Rothfeder, “Jeffrey Liker: The Thought Leader Interview,” s+b, Summer 2008: A lean process expert explains why companies without ba find it so hard to emulate Toyota.
  10. Ikujiro Nonaka’s Web site, Hitotsubashi ICS Business School: Includes a bibliography of Nonaka’s published work.
Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.