Albert Einstein once said that fantasy is more important than (explicit) knowledge. This complies with the Japanese understanding that implicit knowledge is as important as explicit knowledge opposed to the Western preference to explicit knowledge. This could explain the success of Japanese organization in product and process innovations. Nonaka and Tackeuchi point out four different learning steps, in which knowledge is transmitted and gained.

1. First step: Socialization (tacit-to-tacit)

Much knowledge, perhaps 80%, lies in people's brains. The aim for the knowledge worker is to find ways to collect this tacit knowledge. Socialization consists of sharing knowledge through social interactions.

People hold indeed know-hows, secrets, personal skills that will never be shared if none work on it. It is very important to try to gather this knowledge by socializing, that is, using face-to-face communication or better, share experience directly at work through 2 roles: the tutor and the apprentice. It involves arriving at a mutual understanding through the sharing of mental models. That way, there will be little risk that the know-how of your company leaves at the same time of employees' retirement. Socialization is a very effective means of knowledge creation, maybe one of the easiest but nevertheless the more limited. It is also very difficult and time-consuming to disseminate all knowledge using this mode only.

2. Second step: Externalization (tacit-to-explicit)

The process of externalization (tacit-to-explicit) gives a visible form to tacit knowledge and converts it to explicit knowledge. It can be defined as "a quintessential knowledge creation process in that tacit knowledge becomes explicit, taking the shapes of metaphors, analogies, concepts, hypotheses, or models" (Nonaka and Takeuchi, 1995). In this mode, individuals are able to articulate the knowledge and know-how and, in some cases, the know-why and the care-why.

An intermediary is often needed to execute this process. For instance, we can consider a journalist who is the typical person able to interview knowledgeable individuals in order to extract, model, and synthesize in a different way (format, length, ...) and thereby increase its scope (a larger audience can understand and apply this content now).

3. Third step: Combination (explicit-to-explicit)

Combination is the process of recombining discrete pieces of explicit knowledge into a new form. No new knowledge is created at this step. It is rather to improve what we have gathered so far, to make synthesis or a review report, a brief analysis or a new database. The content has been basically organized logically to get more sense, consolidated.

4. Fourth step: Internalization (explicit-to-tacit)

The last conversion process, internalization, occurs through diffusing and embedding newly acquired and consolidated knowledge. In some way, internalization is strongly linked to "learning by doing".

Internalization converts or integrates shared and/or individual experiences and knowledge into individual mental models. Once internalized, new knowledge is used by employees to broaden it, extend it, and reframe it within their own existing tacit knowledge.