Innovation, the source of sustained advantage for most companies, depends upon the individual and collertive expertise of employees. Some of this expertise is captured and codified in software, hardware, and processes. Yet tacit knowledge also underlies many competitive capabilities—a fact driven home to some companies in the wake of aggressive downsizing, when undervalued knowledge walked out the door. The marvelous capacity of the human mind to make sense of a lifetime’s collection of experience and to connect patterns from the past to the present and future is, by its very nature, hard to capture.
However, it is essential to the innovation process. The management of tacit knowledge is relatively unexplored— particularly when compared to the work on explicit knowledge. Moreover, while individual creativity is important, exciting, and even crucial to business, the creativity of groups is equally important. The creation of today’s complex systems of products and services requires the merging of knowledge from diverse national, disciplinary, and personal skill-based perspeaives.
Innovation— whether it be revealed in new products and services, new processes, or new organizational forms—is rarely an individual undertaking. Creative cooperation is critical. We wish to thank Walter Swap. Barbara Feinberg, and three anonymous reviewers for their helpful comn’ients and the Harvard Business School Division of Research for supporting this work. 12 CAUFORNIA MANAGEMENT REVIEW VOL40,NO,3 SPRING 1998 The Role of Tadt Knowledge in Group innovation What isTacit Knowledge?
In the business context, we define knowledge as information that is relevant, actionable, and based at least partially on experience. Knowledge is a stibset of information; it is subjective; ii is linked to tneaningful behavior; and it has tacit elements born of experience. Business theorists have, for the sake of convenience, contrasted tacit knowledge with explicit knowledge as if they were distinct categories. J. C. Spender defines tacit knowledge as “not yet explicated. “‘ Ikujiro Nonaka and Hirotaka Takeuchi use this distinction to explain how an interaction between the two categories orms a knowledge spiral: explicit knowledge is shared through a combination process and becomes tadt through internalization; tacit knowledge is shared through a socialization process and becomes explicit through externalization. In this article, we build on Michael Polanyi’s original, messier assumption: that all knowledge has tadt dimensions. ^ Knowledge exists on a spectrum. At one extreme it is almost completely tacit, that is, semiconscious and unconsdous knowledge held in peoples’ heads and bodies.
At the other end of the spectrum, knowledge is almost completely explicit, or codified, structured, and accessible to people other than the individuals originating it. Most knowledge, of course, exists in between the extremes. Explicit elements are objective, rational, and created in the “then and there” while the tacit elements are subjective, experiential, and created in the “here and now. ” Although Spender notes that “tadt does not mean knowledge that cannot be codified,”” some dimensions of knowledge are unlikely ever to be wholly explicated, whether embedded in cognition or in physical abilities.
Semiconsdous or unconscious tacit knowledge produces insight, intuition, and decisions based on “gut feel. ” For example, the coordination and motor skills to run a large crane are largely tacit, as are the negotiation skills required in a corporate meeting or the artistic vision embodied in the design of a new computer program interface. The common element in such knowing is the inability of the knower to totally articulate all that he or she knows. Tacit knowing that is embodied in physical skills resides in the body’s muscles, nerves, and reflexes and is learned through practice, i. . , through trial and error. Tacit knowing embodied in cognitive skills is likewise learned through experience and resides in the unconscious or semiconsdous. While Polanyi addressed tacit knowledge at an individual level, others have suggested it exists in group settings, hi fact, Richard Nelson and Sidney Winter suggest that organizations maintain their structure and coherency through tadt knowledge embedded in “organizational routines” that no single person understands completely’ Much knowledge remains tacit for various reasons.
Perhaps its explication would not be beneficial. Unless an incentive is created, there is little reason for an individual or group possessing tacit knowledge that provides an important competitive advantage to explicate “away” that advantage. More commonly, however, people are unaware of the tacit dimensions of their knowledge, or CALIFORNIA MANAGEMENT REVIEW VOL 40, NO. 3 SPRING 1998 113 The Role of Tacit Knowledge in Group Innovation arc unable to articulate them. Spender notes various types of “automatic knowledge,” such as skilled use of tools (e. . , a computer keyboard) or instinctive reactions (e. g. , catching a falling object) or “action slips,” as when one starts out to drive on an errand and ends up at the office instead. ^ In all these cases, the physical and mental reflexes operate without conscious direction (or without what Polanyi termed “focal” awareness. ) Moreover, as psychological research has demonstrated, the acquisition of knowledge can occur through non-conscious processes, through “implicit learning. ‘
That is, we can acquire knowledge and an understanding of how to navigate our environment “independently of conscious attempts to do so. “** One intriguing implication is that not only can we “know more than we can tell,”‘ but we often know more than we realize. Furthermore, our efforts to rationalize and explain non-conscious behavior may be futile, if not counterproductive. “Knowledge acquired from implicit learning procedures is knowledge that, in some raw fashion, is always ahead of the capability of its possessor to explicate it. ‘° Researchers stimulating implicit learning found, in fact, that forcing Individuals to describe what they thought they understood about implicitly learned processes often resulted in poorer performance than if the individuals were allowed to utilize their tacit knowledge without explicit explanation. ” Studies on creativity, intuition, and non-analytical behavior suggest three ways that tacit knowledge potentially is exercised in the service of innovation. We speculate that they represent a hierarchy of increasingly radical departures from the obvious and the expected, and therefore are of increasing value to innovative efforts.
Problem Solving The most common application of tacit knowledge is to problem solving. Herbert Simon has argued that the reason experts on a given subject can solve a problem more readily than novices is that the experts have in mind a pattern born of experience, which they can overlay on a particular problem and use to quickly detect a solution. “The expert recognizes not only the situation in which he finds himself, but also what action might be appropriate for dealing with it. “‘^ Others writing on the topic note that “intuition may be most usefully viewed as a form of unconscious pattern-matching cognition. ‘^ “Only those matches that meet certain criteria enter consciousness. “‘”*• ” Problem Finding A second application of tacit knowledge is to the framing of problems. Some authors distinguish between problem finding and problem solving: linking the latter to “a relatively clearly formulated problem” within an accepted paradigm and the former, which “confronts the person with a general sense of intellectual or existential unease” about the way the problem is being considered,'” to more radical innovation.
Creative problem framing allows the rejection of the *obvious” or usual answer to a problem in favor of asking a wholly different 14 CALIFORNIA MANAGEMENT REVIEW VOL 40. NO. 3 SPRING 1998 The Role of Tacit Knowledge in Group Innovation question. “Intuitive discovery is often not simply an answer to the specific problem but is an insight into the real nature of the dilemma. “‘^ Consultants are familiar with the situation in which a client identifies a problem and sets out specifications for its solution, whereas the real value for the client may lie in reformulating the problem.
Of course, the more that the consultant’s unease with the current formulation derives from his or her semiconscious or unconscious knowledge, the more difficult it is to express and rationalize. Prediction and Anticipation Finally, the deep study of phenomena seems to provide an understanding, only partially conscious, of how something works, allowing an individual to anticipate and predict occurrences that are then subsequently explored very consciously.
Histories of important scientific discoveries suggest that this kind of anticipation and reliance on inexplicable mental processes can be very important in invention. In stories about prominent scientists, there are frequent references to the “hunches” that occur to the prepared mind, sometimes in dreams, as in the case of Watson and Crick’s formulation of the double helix. Authors writing about the stages of creative thought often refer to the preparation and incubation that precede flashes of insight. Darwin prepared himself for his insights into evolution through a childhood interest in collecting insects, the reading of geology, and the painstaking observations he made during the voyage of the Similarly, literature on nursing is full of references to the importance of listening to intuition and hunches in caring for patients.
For example, the medical team at Methodist Hospital in Indianapolis was able to revive a three-year old boy in respiratory distress because his nurse listened to her “insistent inner voice” and checked on the patient—despite the fact that “logically” nothing should be wrong. ^ As these examples suggest, much of the research on tacit knowledge focuses on the individual—perhaps because most investigators are psychologists, for whom the single mind is of primary interest, or perhaps because writers can always probe their own experience for data. For similar reasons, the literature on creativity likewise highlights individual expressions of innovativeness. However, as previously noted, innovation in business is usually a group process.
Therefore, we need to examine more closely both tadt knowing and creativity as they are expressed by members of groups—singly and collectively. Creativity and Social Interaction Creative ideas do not arise spontaneously from the air but are bom out of conscious, semiconscious, and unconscious mental sorting, grouping, matching, and melding. Moreover, interpersonal interactions at the conscious level stimulate and enhance these activities; interplay among individuals appears essential to the innovation process.
In some businesses—notably advertising, games, and CAUFORNIA MANAGEMENT REVIEW VOL 40, NO, 3 SPRING 1998 115 The Role of Tacit Knowledge in Group Innovation entertainment—”the creatives” or “the talent” are separated from the rest of the corporation because it is assumed that creativity and innovation bloom in isolation. However, even in businesses where “creatives” have held elite positions for years, some managers are beginning to question why all employees cannot contribute to innovation.
One manager in a toy manufacturing company complained that in a recent meeting with 20 people, “nineteen thought they didn’t need to be creative. ” Studies of people selected because of individually demonstrated creativity refer consistently to their interactions with others as an essential element in their process. One study elidted comments such as: “I develop a lot of my ideas in dialogue,”^” or “it’s only by interacting with other people in the building that you get anything interesting done; it’s essentially a communal enterprise. ^’ The authors of this particular study conclude that “even in the most solitary, private moment—the moment of insight itself—many creative individuals are aware of the deeply social nature of their creative process. “”’ This sodal interaaion is espedally critical for teams of individuals responsible for delivering new products, services, and organizational processes. Before turning to a discussion of how tacit knowledge is utilized by such groups, we present a brief description of the innovation process.