Wisdom in Business – Why? Necessary? Possible?

The views of the blog are those of the author and do not necessarily represent the opinions and views of the School of Leadership Studies.

Wisdom is not a word associated with, or discussed, in business. Yet one only has to look at the headlines in traditional or social media to see examples of unwise business decisions and actions. Wisdom and leadership have been historically linked (Solansky, 2014; Yang, 2011), the concept of wisdom is widely understood (Orwoll & Perlmutter, 1990), and we know wise people when we see them (Biloslavo & McKenna, 2013; Nicholson, 2007), yet wisdom is not named or “pursued” within a business context, and wise leaders are not formally recognized. Why? And does this matter?

                Compelling reasons for wise leaders include projected population increases which will further impact a world already in crisis due to global warming, conflict, and related water and food security issues. The increase in access to internet and social media, the lack of trust in traditional media, governments and even science, in tandem with the increasing speed of technological advancements, highlights the complexity in our world. Wise business leaders will be required to successfully navigate their businesses in this complexity. Further, wise business leaders will guide their organizations in contributing to solutions to world problems, while at the same time not taking decisions or actions that exasperate existing world problems. Or course wise leaders are required in all parts of the world economy (e.g., government, academia to name two), but given the significant assets and staff managed by business executives, developing wisdom in business executives and developing wise organizations may provide “the biggest bang for our buck”.

                Where do we begin? The first thing I am asked when I share that I am researching wisdom in a  business context is, what is my definition of wisdom. Thus, I suggest we begin by enculturing the notion of wisdom within the business lexicon as possible and as a concept that can be embedded into the existing organizational structure and processes. This means adopting a conception of a wise leader and a wise organization such that these concepts can be explained and communicated by senior leaders to the business organization. Ideally the board as well as the CEO and senior leadership team would be aligned on speaking to, and moving towards, a wise organization run by wise leaders. The change management necessary to advance wisdom in leaders and within the organization itself should not be understated.

                The second question I am regularly asked is, how does one measure wisdom? This question highlights the language of business that is founded primarily in capitalism and materialism, with results (primarily financial) measured quantitively. I suggest that there are other means of measure that could be incorporated into both organization and leader measures that would support and foster wise decisions and behaviours, many of them falling under the category of “stakeholder capitalism” (Freeman & By, 2022).

                Development of wise business leaders and wise business organizations is possible. Wise leaders are needed to lead organizations forward in the complexity that we are operating in, and wise organizations are needed to find solutions that our world and its people need.

Faith Matchett is a post-graduate student in the Doctor of Social Sciences program at RRU.