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‘Absorbing by Observation’ or How can you leverage tacit learning in capability building   

The year was 1985. In the Japanese city of Osaka, the product development team of Matsuhita Electric Company were working overtime to develop a bread making machine for homes. The machine wasn’t turning out the way they wanted it. It was not kneading the dough  correctly. Result? The crust of the bread was overcooked while the inside was hardly baked at all. The team went to extremes analysing the problem. They even compared the X rays of the dough made by the machine with the dough kneaded by professional bakers. No meaningful data emerged. 

Software developer Ikuku Tanaka in the team offered to train under the Osaka International Hotel’s head baker to study his kneading technique as the hotel had a reputation for offering the best bread in Osaka city. Tanaka soon observed that the baker had a distinctive way of stretching the dough. So the machine specificiations were modified to accommodate special “ribs” inside to produce the ‘twist dough’ which was the special secret of the hotel’s head baker. The machine, when eventually released, went on to set sales records 

Ikijuro Nonaka, the venerated Japanese guru, relates this enchanting story in the Harvard Business Review Classic 2007 article  The Knowledge Creating Company. He cites it as an instance of converting tacit knowledge into explicit knowledge (learning by observing the head baker) and then incorporating it in the machine design to make it tacit again 

A similar story is related by Lynda Gratton professor of management practice at London Business School, writing for MIT Sloan Management Review (May 2021). She speaks of the corner office of an eminent London lawyer, which had, besides the magnificent city views and an expansive desk, three smaller desks, each occupied by a young trainee of the firm. What explained their presence? “They are here to observe” said the senior lawyer. Prof Gratton explains: “They listened in on tough telephone conversations, they watched the hours and hours spent redrafting a complex document, they attended client visits to hear client challenges and concerns. Of course, their job was not simply to be watchers — the lawyer also chucked them topics to research and drafts to write. But fundamentally, they were absorbing by observation” 

She goes on to quote Nonaka who explained the late working hours of Fujitsu employees in Japan. He said the period following the onboarding is when “the precious tacit knowledge flowed — those insights and ideas that are near impossible to read from the company manual.”

The art and science of selling too is learnt in a similar osmotic way, through a blend of observation, listening and modelling, apart from working with tools and frameworks. So, getting young salespeople to shadow senior sales professional is a good practice in building sales capabilities. But in the post pandemic hybrid work world, facilitating such shadowing may not be feasible all the time. How do we transmit tacit knowledge then? 

Prof Gratton has two suggestions aimed at ensuring that “unspoken knowledge, which accumulates over time” is absorbed through observation even in a hybrid work milieu. 

  • Innovate with technology - Knowledge by observation is crucial for new joiners. So, if face to face interactions with seniors and peers cannot be very frequent, then they may have to be replaced with virtual participation in meetings and client interactions 
  • Curate interactions – It pays to consciously pick the connections that new joiners should build and moments that matter they are exposed to. One company, for example, forms an academy of new joiners for every batch, which holds video sessions three or four days a week for an hour, followed by leaders sharing how they work, their problem-solving tactics, and descriptions of “a day in the life” of different roles. Such curated interactions promote absorption by observation 

Tacit knowledge is knowledge we have, and know we have, but nonetheless cannot put into words. In the words of philosopher Michael Polanyi “We can know more than we can tell.” A defined process to make such knowledge explicit and transferring it could expand the depth and width of sales skills in organisations 

“Without Knowledge, Skill cannot be focused. Without Skill, Strength cannot be brought to bear and without Strength, Knowledge may not be applied.”

- Alexander the Great

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