Organisational Wisdom

Associate Professor of Psychology, Igor Grossmann at  The Wisdom and Culture Lab at The University of Ontario, Canada has been pivotal in establishing a practical framework for wise thinking that lends itself to coaching and mentoring. According to Grossmann and colleagues, “wise thinking is a skill. It is not simply an attribute of a person but rather a property of person-in-context. The potential for wise thinking emerges in the interaction of the person and their environment”. Grossmann and colleagues have established that wise reasoning mediates the effects of age on wellbeing. In other words, just thinking wisely improves life. Wisdom needs to be considered in the context of everyday life according to Grossmann and colleagues. The central characteristics of wisdom have a dynamic component. Just because you are wise in one context does not mean you will be wise in another. Understanding the situational contingencies where wise thinking may lead to wise actions is vital to...

Professor Emeritus of Psychology and Public Affairs at Princeton University's Woodrow Wilson School, Daniel Kahneman, won the 2002 Nobel Memorial Prize in Economics for his work on system 1 and system 2 thinking in “Thinking, Fast and Slow” .  The idea that much of our thinking and decision-making is subconscious, and automatic (system 1), as opposed to rational and deliberate (system 2). But he missed the observation by Japanese theorists, Professor Emeritus Ikujiro Nonaka at the Graduate School of International Corporate Strategy, Hitotsubashi University, and Professor Hirotaka Takeuchi, of the Management Practice in the Strategy Unit of Harvard Business School that there is a third system . We typically rely on system 1 thinking because it’s automatic, fast, and experience-based. We use our innate or gut feel to quickly arrive at a decision that “feels right”. System 2 thinking is logical, rational, and fact-based. We use system 2 when we need to slow down and analyse the i...

Wisdom is inherently hard to pin down and even harder to justify as a practical consideration for complex decision making. But three things have emerged in recent years to put wisdom centre stage. Firstly, we are facing unprecedented threats to our very survival as a species and the standard political, economic and social decision-making frameworks are proving to be ineffective. Secondly, two decades of research into wisdom has revealed credible ways to understand, measure, and enhance wise reasoning in decision making. And thirdly, the rise of evidence-based coaching and mentoring over the last 20 years has legitimized the role of coaching and mentoring as the primary intervention for developing wise reasoning. Now, more than ever we need to deliberately coach for the development of wisdom in our leaders, before it is perhaps too late. The problems with measuring wisdom through self-report scales arise from the inherent limits to introspection and the processes of impress...

How wisdom contributes to decision-making has been attracting a lot of research interest lately. Professor of Human Development at Cornell University, Robert Sternberg defines wisdom as “the search for a moderate course between extremes, a dynamic between knowledge and doubt, a sufficient detachment from the problem at hand, and a well-balanced coordination of emotion, motivation, and thought". For the past two decades the Berlin Wisdom paradigm has served to operationalize wisdom as a scientifically grounded psychological construct. Wisdom is defined as “good judgement and advice in difficult and uncertain matters of life”. The five criteria used for assessing individual wisdom-related performance are intended to reflect a balance between intellect and character: 1.      Rich factual knowledge about human nature and the life course, 2.      Rich procedural knowledge about ways of dealing with life problems, 3.    ...

It seems self-evident that decision-making has gotten more complex and tricky in the first quarter of the Twenty-first Century. Being smart is certainly necessary but it’s no longer sufficient for the wicked problems we must solve if life on our planet is to be sustainable.  We are facing the early impacts of runaway climate change, political discourse is becoming increasingly authoritarian, social media algorithms are polarizing opinion and creating “artificial ignorance”, enraged religious and political criminals strike indiscriminately, walls are being built to keep out ‘the other’, new technologies leapfrog each other in breathless utopian anticipation, government and community institutions implode through loss of trust, and business institutions seem more riven by greed than at any time since the fall of the Roman Empire. We may well be on the way to the collapse of civilization, even though we all agree on what to do, and yet we seem incapable of taking action ( Oreskes...

More than 50% of business decisions end in tears , some more spectacularly than others! In today's VUCA world (volatile uncertain,  complex, and ambiguous) business leaders are under pressure to act quickly and make the "right" call. So how do they get it so wrong so often, and how can you beat the odds? In the early 1970s, Ford Motor Company's charismatic CEO, Lee Iococca wanted a "2,000 pound car for $2,000". The result was the Ford Pinto, a popular compact car designed to beat the Japanese automakers at their own game. But there was a problem. The position of the gas tank meant a rear-end collision could easily rupture the tank and cause a fire. Engineers came up with a fix but it was going to cost about $11 per vehicle, which would amount to $137 million over projected sales of 12.5 million vehicles. Instead, Ford conducted a cost-benefit analysis on the litig ation costs due to likely deaths and severe burns of drivers and passengers and arrived a...