Existing models of knowledge processing do not feature a systemic meaning of knowledge management and ignore the role of leadership and social energy in the knowledge processing system (KPS). This conceptual paper introduces the Leadership Invigorating Flows of Energies, (LIFE) Model as an attempt to remedy that situation and provide a more useful description of the KPS. The LIFE Model highlights the role of emergent leadership and flows of social energies as forces encouraging knowledge creation and dynamic diffusion within an organization through the Knowledge Processing Cycle in eight activities interacting with its social knowledge base in a self-organizing system.