Leadership: Fostering Distributed Excellence in the Organization

In previous chapters we have discussed how a firm creates knowledge through dialogue and practice, guided by its knowledge vision and following a driving objective. We have also looked at ba, knowledge assets, and the ecosystem as the foundation for knowledge creation. The question remains: what drives the entire process? We believe it is a leadership capability that can coherently synthesize, direct, and implement the various elements that foster knowledge creation. However, in the knowledge-based firm, leadership is not exclusive to an elite few. It is distributed throughout the organization among individuals who can exercise phronesis to make decisions and act appropriately to each situation to realize a common good. Knowledge-based management requires management of both internal and external knowledge creation activities, case-by-case, because knowledge is created both inside the organization as well as in dynamic interaction with the external environment. In other words, companies exist in an ecosystem of knowledge. Therefore, leaders must be capable of immediate decision-making in response to the ba that continuously emerge and vanish both inside and outside the organization. This would be impossible in an organization where leadership is fixed.