High-velocity change is the fundamental challenge facing companies today. Few companies, however, are prepared to continuously innovate-because they focus on the short-term and do not emphasize the wisdom needed to make sure that their interests are aligned with those of society. Practical wisdom is the bases of continuous innovation, where companies ceaselessly and repeatedly creating new knowledge, disseminating it throughout the organization, and converting knowledge to action over time. In The Wise Company, legendary management experts Ikujiro Nonaka and Hirotaka Takeuchi highlight how various companies have confronted the challenge of rapid change to create new products and new ways of doing business that benefit employees, consumers, and society. The key: a relentless self-renewal process where companies realize the future they envisions, rather than only responding to changes in the environment. Nonaka and Takeuchi argue that while knowledge-creating companies focusing on tacit and explicit knowledge can generate innovation, they cannot create it on a continuous and ongoing basis without having wisdom about human interactions and how they influence organizational structures and practices. Companies that have resilience, longevity, and sustainability share a number of characteristics, Nonaka and Takeuchi show. Strategies are based on alignment of organizational and societal benefits. Leaders grasp the core of any situation or problem quickly, and intuitively comprehend the nature and meaning of people, things, and events. But wise leadership is not enough: wisdom must infuse the organization through informal as well as formal shared interactions and communications that focus on metaphors and stories that convey the essence and meaning of strategies and actions. In short, Nonaka and Takeuchi demonstrate how continuous innovation results from companies ceaselessly and repeatedly creating new knowledge, disseminating knowledge throughout the organization, and converting that knowledge to action. The Wise Company presents a new model of knowledge-creation and practice for the twenty-first century.

How has Japan become a major economic power, a world leader in the automotive and electronics industries? What is the secret of their success? The consensus has been that, though the Japanese are not particularly innovative, they are exceptionally skilful at imitation, at improving products that already exist. But now two leading Japanese business experts, Ikujiro Nonaka and Hiro Takeuchi, turn this conventional wisdom on its head: Japanese firms are successful, they contend, precisely because they are innovative, because they create new knowledge and use it to produce successful products and technologies.

Examining case studies drawn from such firms as Honda, Canon, Matsushita, NEC, 3M, GE, and the U.S. Marines, this book reveals how Japanese companies translate tacit to explicit knowledge and use it to produce new processes, products, and services.

Praise for "Extreme Toyota"

"This book, based on unprecedented access to Toyota, offers a revealing look at one of the world's greatest companies. The authors, professors at Japan's most innovative business school, find that Toyota's success goes far beyond its production system and draws on its unique approaches to marketing, sales, and human resource management. Toyota has reshaped auto manufacturing into a knowledge-driven industry. Toyota's ability to manage apparent contradictions drives its continuous innovation and self-renewal."
--MICHAEL E. PORTER, Bishop William Lawrence University Professor, Harvard Business School

"At IBM's Business Leadership Forum, Chairman Fujio Cho of Toyota described the single most important challenge for any global enterprise: securing a supply of high-value skills. Extreme Toyota shows how this remarkable company has invested its resources in 'training, training, and more training.' It shows how business today depends not only on operational efficiency and strategy, but on people. And it shows Toyota's genius for the soft side of management--culture, relationships, and communication. This is a must-read for executives who want to learn about the true sources of innovation, competitive differentiation, and growth in today's global economy."
--SAMUEL J. PALMISANO, Chairman of the Board, President and Chief Executive Officer, IBM Corporation

"This is the definitive book on the secret to Toyota's phenomenal success, with important lessons for all leaders. The formula is simple and profound; namely, Toyota embodies the belief and practice that success requires leaders at all levels to make good judgment calls. From top to frontline, all leaders have the opportunity and responsibility to become masters of effective action. This book is a well written and engaging guide for building successful twenty-first century companies."
--NOEL M. TICHY, Professor at the Stephen M. Ross School of Business, University of Michigan

"A very fresh and comprehensive study of Toyota. You will find an outstanding analysis of the company's unique corporate culture and DNA in this book."
--YOSHIO ISHIZAKA, Former President and Chief Executive Officer, Toyota Motor Sales, U.S.A., Inc.