12 July 2006
Successful Intentions Newsletter
Hi ,
"They lie they cheat they steal and they've been getting away with it for far too long!"
("Enough is Enough", Fortune, March 3, 2002)
It's not that the leaders of Enron, World Com, or One Tel were considered weak, far from it! They were generally perceived as highly charismatic. But they all acted unwisely.
The Fool on the Hill
It's much easier to find examples of foolish business decisions than wise ones, and somehow morality, ethics and wisdom all go together. Is it possible to be wise, but immoral?
The former CEO of Tyco International and his financial executives probably thought so. They were charged with stealing US$600 million, spending the money on art, yachts and luxury items. Thousands of dollars were spent on items such as a dog umbrella stand (US$15,000), a shower curtain (US$6,000), and a gilt waste paper basket (US$2,200). Revelations about an infamous birthday party held on the island of Sardinia for the CEO's wife came to light, prominently featuring vodka and an ice statue of "David"!
Did they consider the consequences of their actions - the impact on investors, employees, and whole communities? If they did then they might have exhibited managerial wisdom.
Perhaps Ray Williams, the founder of HIH Insurance, knew the difference when he described himself as being "foolish and perhaps gullible" during the Royal Commission into the A$5 billion collapse of HIH. Yet, he had spent, among other things, $700 on tips and $1,600 on cigars. In later hearings, Williams was described as "arrogant, high-handed and ignorant".
| "It's great to believe in one's self, but don't be too easily convinced." Anonymous |
Decisions are being made every day by people practicing management which demonstrate that they don't know how to exercise good judgment, nor do they demonstrate that they have an understanding of what it means to be "wise".
The March of Folly
And yet leaders are, by and large, highly intelligent individuals. Does being smart protect against foolishness? Well, think about Bill Clinton, a graduate of Yale Law School and a Rhodes Scholar, and Monica Lewinsky. And you don't need to be a Rhodes Scholar to consider George W Bush (also a Yale graduate) and the unwinnable war in Iraq. All around is evidence of the unmistakable "March of Folly" according to US Historian Barbara Tuchman.
Unsuccessful leaders typically display one (or more) of 5 flaws in their thinking:
- Unrealistic Optimism Fallacy: Leaders think they are so smart and effective that they can do whatever they please.
- Ego-centrism Fallacy: Leaders who think that only they matter, not the people who rely on them.
- Omniscience Fallacy: Leaders who think they know everything, and lose sight of their own limitations.
- Omnipotence Fallacy: Leaders who think they are all-powerful and can do whatever they want.
- Invulnerability Fallacy: When leaders think they can get away with anything, consider themselves to be too clever to be caught, and even if caught, figure they can get away with it because of who they imagine themselves to be.
| "Swallow your pride occasionally. It's non-fattening." Anonymous |
The Getting of Wisdom
How is that clever people fail to use their apparently boundless knowledge? Interestingly, intelligence (IQ) seems to have a positive correlation with leadership effectiveness during low stress conditions, but a negative correlation when stress is high. What's required are other kinds of "smarts", referred to as practical intelligence. This is the ability to solve everyday problems by utilizing knowledge gained from experience to purposefully change oneself to suit the environment, change the environment to suit oneself, or find a new environment in which to work.
A wise leader uses these skills to balance the interests of varying kinds, including their own, those of their followers, and those of the organization for which they are responsible. They also use their practical intelligence and experience, moderated by values, to seek to reach a common good.
But before leaders can act wisely they must become aware of wisdom and its presence as an ability. Wisdom is:
- An intellectual grasp of and insight into the means and ends of practical life.
- Both knowledge of the truth and action to do what is good.
- A way of thinking and being while moving through ever-changing situations and problems and being table to act wisely in relation to them.
- A fulcrum that balances overconfident knowing and overly cautious doubt.
- An innate quality which is deeply veiled within individuals.
- A means of making appropriate use of knowledge.
Wisdom enables leaders to approach dynamic and complex organizational environments with cautious confidence and the willingness to improvise in response to situational factors.
A successful leader needs:
- Creativity to generate good ideas,
- Academic intelligence to ascertain whether those ideas are any good,
- Practical intelligence to know how to persuade other people,
- Wisdom to make the ideas work for everyone's benefit, and
- A good executive coach!
Psychologist Richard Kilburg says "executive coaching, when done well, deliberately facilitates the continued emergence of wisdom in clients". You can find out more here :
[http://www.intentional.com.au/docs/Inspirational_chaos_executive_coaching_and_tolerance_of_complexity.pdf]
And watch out for the next edition of the Successful Intentions Newsletter
Keep your intentions clear,
Peter Webb
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