In an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge.

When markets shift, technologies proliferate, competitors multiply, and products become obsolete almost overnight, successful companies are those that consistently create new knowledge, disseminate it widely throughout the organization, and quickly embody it in new technologies and products.

The key to this process is personal commitment, the employees’ sense of identity with the enterprise and its mission.

A company is not a machine but a living organism. Much like an individual, it can have a collective sense of identity and fundamental purpose. This is the organizational equivalent of self-knowledge—a shared understanding of what the company stands for, where it is going, what kind of world it wants to live in, and, most important, how to make that world a reality.

The essence of innovation is to re-create the world according to a particular vision or ideal. To create new knowledge means quite literally to re-create the company and everyone in it in a nonstop process of personal and organizational self-renewal.

New knowledge always begins with the individual. A brilliant researcher has an insight that leads to a new patent. A middle manager’s intuitive sense of market trends becomes the catalyst for an important new product concept. A shop-floor worker draws on years of experience to come up with a new process innovation.

Making personal knowledge available to others is the central activity of the knowledge-creating company.