Conventional ways of making strategy are inadequate to survive amid uncertainty and complexity. Rather, strategy must be grounded in company purpose based on deeply held values what the authors call "soul" and informed by "brain": cognition augmented by advanced analytics and other technologies. Implementing strategy becomes a way of life when leaders follow six key practices drawn from the examples of soulful business leaders in Japan and elsewhere.

In an era of increasing discontinuity, wise leadership has nearly vanished. Many leaders find it difficult to reinvent their corporations rapidly enough to cope with new technologies, demographic shifts, and consumption trends. They can't develop truly global organizations that operate effortlessly across borders. And they find it tough to ensure that their people adhere to values and ethics. The world needs leaders who pursue the common good by striving to create social as well as economic value and who pair micromanagement with big-picture aspirations about the future. The authors, who have studied, taught, and interviewed executives in some of the world's leading companies, assert that such leaders must acquire practical wisdom, or what Aristotle called phronesis: experiential knowledge that enables people to make ethically sound judgments. Wise leaders demonstrate six abilities. They make decisions on the basis of what is good for the organization and for society. They quickly grasp the essence of a situation and fathom the nature and meaning of people, things, and events. They provide contexts in which executives and employees can interact to create new meaning. Phronetic leaders use metaphors and stories to convert their experience into tacit knowledge that others can use. They exert political power to bring people together and spur them to act. And wise leaders use apprenticeship and mentoring to cultivate practical wisdom in others.

Eisai has used knowledge creation as the engine of growth for its operation in Japan and was wondering if it can be utilized on a global scale.

In an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge. Yet, few managers understand the true nature of the knowledge-creating company--let alone know how to manage it. According to this 1991 article by Japanese organizational theorist Ikujiro Nonaka, the problem is that most Western managers define knowledge--and what companies must do to exploit it--too narrowly. They believe that the only useful knowledge is "hard" (read "quantifiable") data. And they see the company as a kind of machine for information processing. Nonaka shows us another way to think about knowledge and its role in business organizations. He uses vivid examples from highly successful Japanese companies such as Honda, Canon, NEC, and Sharp. Managers at these companies recognize that creating new knowledge is not simply a matter of mechanistically processing objective information. Rather, it depends on tapping the tacit and often highly subjective insights, intuitions, and ideals of employees. The tools for making use of such knowledge are often "soft"--such as slogans, metaphors, and symbols--but they are indispensable for continuous innovation. The reasons Japanese companies are especially adept at this holistic kind of knowledge creation are complex. But the key lesson for managers is quite simple: Much as manufacturers worldwide have learned from Japanese manufacturing techniques, companies that want to compete on the knowledge playing field must also learn from Japanese techniques of knowledge creation.

A major reason why Japanese corporations succeed in global markets is the informed, hands-on market research they practice. When Japanese managers want information on customer needs or market response to a new product, they don't depend on market research professionals and the so-called scientific methods favored in the United States and Europe. Instead, they meet and talk directly with retailers, wholesalers, distributors, and brokers so that they can gain deep knowledge of their channels.

New product development has become fast paced and competitive. Managers need to realize that the traditional, sequential approach to developing new products will not work in the new arena. Instead, they must adopt a more flexible, holistic product development strategy where a development team works as a unit to reach a common goal.