Innovation through knowledge and creation of new value

The most important factor in the knowledge society is “expertise”. However, “expertise” is the most important production factor for individuals and economies, but it only creates values or innovates when connected with certain tasks.

The purpose and function of most modern organizations lies in the integration of expertise for common purposes. This is true for both profit organizations and nonprofit organizations whose purpose is to maximize productivity and efficiency through expertise.

Modern organizations must constantly seek change. Change means destroying a stable state. In other words, the organization must be reorganized and destroyed on the assumption of constant change.

Even with expertise, the shelf life of the knowledge is not long. Even the knowledge that is sure today can go wrong tomorrow. This is the nature of knowledge.

Professor Peter Drucker, who discovered the nature of knowledge, said:

“Intellectuals with exceptional expertise in any area of the organizational society must learn new knowledge every four to five years. Otherwise, all the knowledge we possess becomes obsolete and becomes outdated.”

The acquisition of new knowledge is important because most of the changes that have the most serious impact on the knowledge system of any one field come from other knowledge fields. In the process of this change, knowledge drives innovation through knowledge.

Innovation in science or technology creates new knowledge. And it makes conventional technology obsolete. Social innovation is no different. Perhaps social innovation may be even more important than innovation in science or technology.

Organization change management for social innovation

Every organization must include change management in its own structure. Managers should ask the following questions about every process, product and policy every few years.

“If we were not doing this already, and now we know this, should we start this now?”

If the answer is “no” then you have to ask another question.

“Then what should we do?”

And it is important to “act” as soon as you have an answer. If you do “another study” rather than “action”, the organization can become very difficult. Organizations must not worry about how to maintain existing products, policies, and management practices, but rather have a “plan of action” about how to dispose of it entirely.

For this “complete disposal”, all organizations must have three systematic practices:

First, organizations must constantly improve everything they do. You should improve your product or service as soon as possible to make it completely new and extraordinary.

Second, every organization must learn how to leverage knowledge. In other words, you have to learn how to apply new knowledge and create new products and values.

Third, every organization must learn systematic innovation. After innovating, we have to systematically discard it and start the new process again from the beginning.

A knowledge-based organization that does not go through this process will not be able to attract or hold people with high qualities that can have a significant impact on the organization’s performance. And an organization that can not hold on to someone with excellent qualities will eventually become a cliche organization without innovation.

Finally, organizations need a high degree of decentralization to respond to change. Organizations that do not have a high level of decentralization will not be able to make rapid decisions and be driven out of competition.


This content is based on Professor Peter Drucker’s book “The Essential Drucker on Individuals”.

This article refers to the following article.

https://www.amazon.com/gp/product/B008CM8EI8/ref=as_li_tl?ie=UTF8&tag=attrest-20&camp=1789&creative=9325&linkCode=as2&creativeASIN=B008CM8EI8&linkId=d08664572facb5bb944da9b00ec670fa#The Essential Drucker on Individuals

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