Seeking Authentic Wadan: Pioneering Knowledge-Wisdom Circulation and Driving Autonomous Value Creation

Reexamining the Essence of "Harmonious Communication"

Wadan's management philosophy—"Pioneer knowledge-wisdom circulation and drive autonomous value creation"—encapsulates the essence of what we aim to achieve.

When people hear the name "Wadan," many interpret it as "a company teaching communication techniques." Indeed, this name embodies our desire to realize "harmonious communication (dan)". However, what we pursue as authentic Wadan goes beyond superficial smoothness of communication. It represents a value creation process born from deep dialogue spaces based on psychological safety, including constructive conflict. While dialogue is a form of communication, our greatest interest lies in bi-directional engagement that promotes knowledge creation and circulation, transcending mere information exchange.

When founding and building Kikagaku, an AI education venture, I encountered structural communication challenges. The more we tried to enhance technical education expertise, the more departmental divisions emerged, causing knowledge and insights that should have been shared to become buried within the organization. This challenge of balancing deepening expertise with cross-departmental collaboration couldn't be solved merely by changing the frequency or methods of communication. From this experience, I became convinced that dialogue quality is a fundamental factor determining an organization's intellectual productivity and creativity.

In this article, I'll go beyond the superficial view of "communication improvement" to redefine dialogue from the essence of knowledge creation and convey Wadan's philosophy of tackling structural organizational challenges. The purpose of this article is to bridge the gap between the general understanding of "harmonious communication" and the "authentic Wadan" we aim to achieve.

Communication Challenges in Modern Organizations and a Structural Perspective

In today's organizations, a surprising amount of knowledge and ideas are "dormant." This isn't simply a matter of "insufficient communication" but a more fundamental "knowledge-wisdom circulation disorder." This phenomenon stems from three structural factors.

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Cognitive Structure Issues

Each of us in organizations has our own unique "mental model" for understanding the world. These differences in mental models cause different interpretations of the same words, making dialogue unproductive. For example, the word "innovation" might mean "technological breakthrough" to engineers, "market creation" to marketers, and "business model transformation" to executives—each with different meanings.

Cognitive biases like the "fundamental attribution error" can cause us to misidentify the essence of problems and create rifts in relationships. When witnessing a colleague's failure, we tend to attribute it to personal factors (lack of ability, laziness) rather than situational factors (time constraints, information shortage). Such biases trigger exchanges of criticism and blame rather than constructive dialogue.

What's important is that these cognitive structural differences themselves aren't the problem, but rather our inability to recognize and utilize these differences. The existence of diverse mental models can be an organizational strength. However, when these differences go unrecognized and no shared mental model forms, dialogue doesn't deepen, and knowledge integration and creation are hindered.

Power Structure Issues

The power structure within organizations significantly impacts communication flow. In organizations with strong hierarchies, the phenomenon of "bad news not traveling upward" occurs, creating gaps in reality perception. Additionally, information asymmetry creates invisible walls between "those who know" and "those who don't," inhibiting essential dialogue.

In environments with low psychological safety, even constructive disagreement is avoided, and only superficial agreement prevails. Particularly in Japanese organizations, the culture of honne (true feelings) versus tatemae (public stance) sometimes hinders essential dialogue. This fundamentally damages the "quality of dialogue." According to Edmondson's research, teams with higher psychological safety engage in more learning behaviors and consequently perform better¹.

Such power structure influences lower dialogue quality regardless of individual communication skills. No matter how refined one's speaking or listening skills, if the organization's power structure undermines psychological safety, essential dialogue won't emerge.

System Structure Issues

Modern organizations often adopt departmental structures to enhance specialization and efficiency. However, this structure creates organizational silos, causing departmental disconnection. In siloed organizations, information may be actively shared within departments but barely flows between them. As a result, the organization's overall intellectual creativity and problem-solving capacity diminish.

What's even more dangerous is that communication problems worsen through self-reinforcing loops. For instance, a small initial misunderstanding creates distrust, leading to decreased information sharing, which further expands misunderstanding and distrust—a vicious cycle.

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These system structure problems occur independently of individual intentions or abilities. In other words, it's not an individual problem of "poor communication skills" but a phenomenon generated by the entire system.

Limitations of Surface-Level Countermeasures

Considering the three structural factors discussed above, it becomes clear why conventional "communication training" or "dialogue space creation" alone cannot solve knowledge circulation disorders in organizations. Surface-level countermeasures don't bring change to deeper structures.

There are examples of failed countermeasures in educational institutions and staffing companies. When AI education is conducted superficially and short-term, students experience the "Dunning-Kruger effect"², overestimating their abilities and gaining temporary satisfaction. However, when faced with real-world problems, they discover their superficial understanding is insufficient. This challenge cannot be solved merely by improving dialogue as a communication technique.

Authentic "Wadan" is not about improving communication techniques but about intervening in the very structures that inhibit knowledge-wisdom circulation.

The World Wadan Aims For: From Knowledge to Knowledge-Wisdom Circulation

Based on the analysis above, let's envision the world we want to create through "Wadan." It's not merely superficial communication but a state where knowledge, intelligence, and wisdom freely circulate within organizations, continuously generating emergent value autonomously. Let's examine the theoretical framework for realizing this ideal state.

Knowledge Creation Theory and the SECI Model

To reconsider dialogue from a more essential perspective, the knowledge creation theory by Ikujiro Nonaka and Hirotaka Takeuchi³ provides a useful framework. This theory emphasizes the importance of two dimensions in understanding knowledge: the epistemological dimension (qualitative conversion between tacit and explicit knowledge) and the ontological dimension (expansion range from individual → group → organization → inter-organizational).

The SECI model realizes organizational knowledge creation through the circulation of these four processes dealing with qualitative knowledge conversion:

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1. Socialization (Tacit → Tacit | Individual → Individual)
   • Process where tacit knowledge is shared between individuals while remaining tacit
   • Example: Apprenticeship where craftsman's skills are learned through observation, team hands-on collaborative work
2. Externalization (Tacit → Explicit | Individual → Group)
   • Process of converting tacit knowledge into explicit knowledge through language or diagrams that others can reference
   • Example: Documenting expert know-how into manuals, visualizing ideas through metaphors or models
3. Combination (Explicit → Explicit | Group → Organization)
   • Process of organizing and integrating existing documents and data to construct new systematic knowledge
   • Example: Creating company-wide strategic materials by integrating reports from multiple departments, creating specifications by combining market data with technical information
4. Internalization (Explicit → Tacit | Organization → Individual)
   • Process of embodying documented knowledge through practice and reinternalizing it as individual tacit knowledge
   • Example: Mastering documented operational procedures through practical application, deepening intuitive understanding by applying theoretical models in practice

At Wadan, we'll begin by focusing on supporting the externalization and combination processes in our initial services. This is because organizational leaders with valuable experiences and insights are typically too busy to transform their tacit knowledge into explicit form. Executives and business leads, consumed with daily decision-making, lack the capacity to convert deep insights from their experiences into shareable forms. This valuable knowledge remaining unexplicated represents a significant loss for organizations. However, we plan to eventually develop comprehensive services covering all four SECI model processes.

Information Volume vs. Data Volume: Conditions for True Value Creation

With recent advances in AI technology, automatic text generation has become easier. But how much value is there in merely "duplicating" existing information? Increasing data volume without increasing information volume is actually socially harmful. This is because when low-quality information proliferates, truly valuable information gets buried.

An important information-theoretical distinction is relevant here. "Data volume" refers to the physical amount of information (number of bits or characters), whereas "information volume" refers to novelty, usefulness, and richness of meaning in the content. For example, copying the same text 1000 times increases data volume 1000-fold, but information volume remains unchanged.

The value of human involvement lies precisely in the judgment that increases information volume by deciding "what to write." Organizational leaders' valuable experiences and insights aren't mere data but wisdom with rich information volume.

From Knowledge to "Chi": The DIKIW Model and the Importance of Practical Wisdom

While the SECI model focuses primarily on "knowledge" creation and transformation, what organizations truly need is the broader circulation of knowledge-wisdom represented in the DIKIW model, encompassing data, information, knowledge, intelligence, and wisdom⁴. In particular, Aristotle's concept of "phronesis" (practical wisdom) refers to practical wisdom beyond mere knowledge or technique—the ability to judge "what should be done" in specific situations.

This circulation of higher-order knowledge-wisdom is essential for organizations to address complex problems and create true value. Phronesis is deeply related to the essence of value creation that our "Wadan" aims for.

The Relationship Between Experience and Thought Process: The $y = p(x)$ Model

In our practice, understanding the relationship between experience $x$, thought process $p$, and result $y$ is crucial. Often, experience $x$ is merely used retroactively as evidence to reinforce result $y$, but this only creates superficial persuasiveness. The truly valuable approach is to utilize experience $x$ and result $y$ as materials forming thought process $p$, and from there derive new insights $y'$ in a functional relationship.

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This $y = p(x)$ model precisely reflects the phronesis approach (making practical judgments $y$ based on experience $x$ through deliberation $p$). The mental model mentioned earlier forms the foundation of thought process $p$, defining how we interpret the world and what values guide our judgments. The thought process is a dynamic information processing flow based on mental models, and they mutually influence each other.

From Binary Thinking to Latent Variable Thinking

Important in understanding dialogue quality is moving beyond the binary view of "good dialogue/bad dialogue" (binary thinking) to a perspective that sees it as a continuous "latent variable." Communication quality is a continuous variable determined by various complexly intertwined factors; observing, estimating, and appropriately intervening in this variable is crucial.

In modern organizations, by the time communication problems surface, they've often already reached a binary opposition state of "good/bad." However, behind this lies continuously changing latent variables, and with early appropriate intervention, improvement may be possible before reaching binary opposition.

This latent variable thinking leads us not merely to a quantitative approach of "let's increase dialogue opportunities," but to a qualitative approach that transforms the very structures supporting dialogue.

Shifting from Reactive to Proactive

In many modern organizations, the reactive approach of addressing communication problems after they surface is common. However, what we aim for is a proactive approach that structurally intervenes before problems become apparent.

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However, humans have cognitive and psychological cost limitations. While proactive behavior is desirable, it's difficult to realize in all situations. What's noteworthy here is the possibility of "breaking cognitive limitations" through technological advances, especially the latest AI technologies. Organizations can enhance their overall proactive capacity when AI actively collects and analyzes information with high uncertainty or value, supporting human decision-making.

Towards Collective Intelligence and Emergent Value Creation

When ideal knowledge circulation is realized, diverse knowledge, intelligence, and wisdom within the organization connect to form collective intelligence. And based on this collective intelligence, unpredictable "emergence" occurs, leading to autonomous value creation.

Emergence refers to the phenomenon where new order or characteristics that couldn't be predicted from individual elements arise in the whole. In the organizational context, it refers to the spontaneous generation of ideas, solutions, or business opportunities that no one anticipated, arising from interactions among diverse members.

To realize this emergent value creation, the knowledge creation cycle through the SECI model must function sufficiently, and appropriate interventions must be made into the three structural factors (cognitive, power, and system). And to support this emergence, Wadan will gradually deploy a comprehensive set of services.

Invitation to "Wadan": A Journey to Next-Generation Knowledge-Wisdom Circulation

Authentic "Wadan": A Structural Approach to Pioneering Knowledge-Wisdom Circulation

Even if workplace relationships are good, it's difficult to achieve harmonious communication without successfully producing results. Isn't it when the environment is set for contributing to the organization and recognizing one's own achievements that harmonious communication is realized?

When hearing the word "Wadan," it's natural to think of conversational chat. However, authentic "Wadan" as we conceive it refers to a state where multidimensional knowledge-wisdom—including knowledge, intelligence, and wisdom—freely circulates beyond structural barriers in organizations, supported by psychological safety that transcends superficial harmony and includes constructive conflict. And we aim to realize organizations where autonomous and emergent value creation sustainably arises from this circulation.

This vision cannot be achieved through superficial communication techniques. This is because what determines dialogue quality is the organization's cognitive structure, power structure, and system structure more than individual skills. True transformation can only be realized by simultaneously intervening in these structures.

Consider Your Organization's "Knowledge Circulation" State

I'd like readers to reflect on the state of "knowledge-wisdom circulation" in their own organizations. You can diagnose your current situation by asking yourself the following questions along the SECI model:

• Socialization: Are there opportunities and environments for tacit knowledge to be shared among members? Is interaction active between members with different specialties and experiences?
• Externalization: Are there opportunities and mechanisms for members' potential thoughts and tacit knowledge to be verbalized and expressed as explicit knowledge? Is there a culture where ideas are refined through constructive conflict?
• Combination: Are there mechanisms for externalized knowledge to be systematized and widely shared/utilized within the organization? Are there no barriers to knowledge sharing between departments?
• Internalization: Are there opportunities and mechanisms to learn formalized knowledge through practice and embody it as new tacit knowledge? Is there a culture that encourages learning from failures?

If answers to these questions are negative, structural obstacles to knowledge circulation likely exist in your organization. However, this is not an unusual situation. Many organizations face similar challenges. What's important is that structural problems have structural solutions.

Towards a New World of Organizational Communication

With the rapid development of AI, how communication and knowledge-wisdom creation occur within organizations will change even more significantly in the coming years. What won't change is the importance of "deep dialogue between humans" and "knowledge-wisdom circulation." Technology should support these, not replace them.

If your organization wants to realize "knowledge-wisdom circulation" and "autonomous value creation," I invite you to explore the new world of organizational communication with us. It's a world where deep mutual understanding and creativity coexist, including constructive conflict rather than superficial "harmony"—the world of authentic "Wadan".

References

Footnotes

1. Edmondson, A. C. (2019). "The Role of Psychological Safety in Predicting Performance", Harvard Business Review ↩

2. Kruger, J., & Dunning, D. (1999). "Unskilled and unaware of it: How difficulties in recognizing one's own incompetence lead to inflated self-assessments", Journal of Personality and Social Psychology, 77(6), 1121-1134 ↩

3. Nonaka, I., Takeuchi, H. (1996). "The Knowledge-Creating Company", Toyo Keizai ↩

4. Rowley, J. (2007). "The wisdom hierarchy: representations of the DIKW hierarchy", Journal of Information Science, 33(2), 163-180 ↩