Tacit Knowledge-How Toyota Transfer Knowledge!

Tacit knowledge (as opposed to formal or explicit knowledge)

 is knowledge that is difficult to transfer to another person by means of writing it down or verbalising it. For example, stating to someone that Tooting is in London is a piece of explicit knowledge that can be written down, transmitted, and understood by a recipient.

However the ability to speak a language, use algebra[1], or design and use complex equipment requires all sorts of knowledge that is not always known explicitly, even by expert practitioners, and which is difficult to explicitly transfer to users.

While tacit knowledge appears to be simple, it has far reaching consequences and is not widely understood.

An example of the tacit knowledge approach to transferring knowledge within a global organization is provided by Toyota. When Toyota wants to transfer knowledge of its production system to new employees in a new assembly factory, such as the factory recently opened in Valenciennes, France, Toyota typically selects a core group of  two to three hundred new employees and sends them for several months training and
work on the assembly line in one of Toyota’s existing factories. After several months of studying the production system and working alongside experienced Toyota assembly line workers, the new workers are sent back to the new factory site. These repatriated workers are accompanied by one or two hundred long-term, highly experienced Toyota workers, who will then work alongside all the new employees in the new factory to assure that knowledge of Toyota’s finely tuned production process is fully implanted in the new factory.

Toyota’s use of Quality Circles also provides an example of the tacit knowledge approach to creating new knowledge. At the end of each work week, groups of Toyota production workers spend one to two hours analyzing the performance of their part of the production system to identify actual or potential problems in quality or productivity. Each group proposes “countermeasures” to correct identified problems, and discusses the results of countermeasures taken during the week to address  problems identified the week before. Through personal interactions in such Quality Circle group settings, Toyota employees share their ideas for improvement, devise steps to test new ideas for improvement, and assess the results of their tests. This knowledge management practice, which is repeated weekly as an integral part of the Toyota production system, progressively identifies, eliminates, and even prevents errors. As improvements developed by Quality Circles are accumulated over many years,Toyota’s production system has become one of the highest quality production processes  in the world (Spear and Bowen 1999).

by Ron Sanchez

Professor of Management, Copenhagen Business School