In our work understanding how Haier has succeeded, we often point out that "they've created big change out of small moves." One reason that this has been so successful is that it never asks the employees to take-on all of the risk of change, without any security. Maintaining as much of the familiar in a world where everything else is changing is what my good friend and IMD colleague George Kohlrieser has called a secure base. Such built-in security makes it less threatening to take big chances. Relying on tacit knowledge is often central to such security, even though tacit knowlege is often informal and possibly ethereal, as a result.

In search of such a tacit-knowledge-oriented secure-base, one of the things that Toyota knew and yet forgot was that one must, in the words of Paul Ingrassia, the author of Crash Course,  “never build … a new product in a new factory with a new workforce.”  Read more