Can we create organizations that act wisely? It is easy to be cynical about such a question. The news shows us images of misbehaving corporations and ineffective governments. Those who have gone to work in large organizations return with tales of mind-numbing bureaucracy, nonsensical policies, and ruthless managers. Wisdom, it seems, is a rarity.

Yet, consider the following. In 1981, forty-four percent of the world’s population lived in extreme poverty. By 2015, only ten percent did^[1]. In 1950, the global average life expectancy was forty-eight years^[2]. By 2014, we extended that to seventy-one years^[3].  We did not achieve these accomplishments by accident, but rather through an intentional, coordinated effort across hundreds of organizations and thousands of people spanning the globe. Some might consider organizations capable of such achievements wise.

Thus, the question is not can we create wise organizations, for it seems we already have some capacity to do so. Instead, it is how can we create wise organizations on purpose. Is wisdom the product of chance, or is it an attribute we can develop?

This textbook is premised on the assumption that wisdom is an attribute we can develop and lays out a framework to do so. First, though, we must establish an understanding of what wisdom is, which the following section does.

What is Wisdom?

Is a politician who votes to turn undeveloped parkland into a condominium development a wise leader or a destructive fool? Your answer to that may depend on several factors, including the situation, your attitudes, and your culture. Regarding the situation, your assessment of the politician may depend on several factors. Your view may differ if the undeveloped park is a haven for coyotes that attack pets and small children versus if it is a tranquil hiking area for nearby residents.

Your attitude also influences your judgment. Your view of the politician’s actions will differ if you believe, for example, that creating homes for people is more critical than preserving nature. The culture in which you live will influence your attitudes.  If the beliefs and values of your culture honor the sanctity of nature above commercial development, then that may seep into your views, which affect your judgment of the politician.

The actions we define as wise depend on our understanding of the social context in which the action happens as well as personal and cultural perspectives.^{[4] [5]} Different people may perceive the situation differently. Their values and beliefs may differ from one another. They may come from different cultures with different attitudes. Thus, though you may judge the politician a dangerous fool, another person may see them as the wisest of leaders.

If perceptions of wisdom differ from one person to the next, can we truly know what wisdom is? If there is no unifying perception of what is wise, how can we develop wisdom? Though opinions of wisdom may vary, there are unifying structures that we can understand. Though various thinkers and cultures may categorize them differently, this textbook presents these unifying structures as follows.^[6]

• Values:  Values guide wise action
• Rationality: Knowledge is required but insufficient for wise action
• Power: Wisdom is action-oriented

Values guide wise action. Values define the ends we believe are worth achieving and the means we feel are appropriate to achieve those ends.^[7] Generally, the people we perceive as wise are those who pursue the values we share. In complex organizations, different groups may pursue different values. For example, the finance department of a hospital may want to focus on reducing costs whereas physicians and nurses may wish to maximize the quality of care for patients. There are times when these values may conflict–reducing costs may impact patient care, for example. Wisdom requires deft management of these value interactions.

Knowledge is required but insufficient for wise action. Knowledge means knowing how and knowing about.^[8] It is related to the concept of rationality. Rationality describes how we come to know something as well as how we justify which action to take.^[9] Knowledge is required because we need to understand our environment to choose what action is appropriate. Knowledge is insufficient, though, because what we truly know is often limited and flawed. Moreover, different people “know” different things, so whose knowledge is pertinent in a given situation? For example, the finance department of a hospital may rely on ‘economic rationality’ where decisions are based on cost-benefit analyses. Physicians, on the other hand, may rely on ‘technocratic rationality,’ which uses scientific experiments to choose a course of action. If those two forms of rationality justify different actions, to whom should we listen? In many situations, we must choose a course of action even though our knowledge is incomplete and disputed.

Wisdom is action-oriented. Wisdom is not knowing the right thing to do, but doing it.^[10][11] Taking action requires passion and courage. Passion because you need to believe it is worth the effort to act. Courage because acting involves risk. You may make mistakes. You may make enemies. Action is related to power. To create organizational action, you must understand how to get things done and then exercise your power to make things happen. You must also understand how others might use their power to resist your efforts and what you can do to overcome that.

Can we Teach Wisdom?

A wise society is built upon wise organizations. Wise organizations, in turn, arise from the wisdom of individuals within them. Is wisdom, however, something we can teach?

The fun thing with that question is, if the answer is no, we can close this text and turn on the TV. The following section highlights the challenges of teaching wisdom. The subsequent section argues that despite these challenges, there are reasons to keep the TV off for a while.

The Challenge of Teaching Wisdom

We draw on wisdom to deal with the complexity of real life. Classroom environments and textbooks, at best, present simplified models of reality. Creating the real muck and messiness of life in the classroom is often impossible.^[12] We draw on wisdom when knowledge is lacking or flawed–if the answer is clear and known, we do not need wisdom. If no one “knows” the right answer for a particular problem, what right does the teacher have to assign you a grade for your solution?^[13] Wisdom is subjective. Different people perceive different acts as wise depending on the situation, their attitudes, their cultural beliefs, and so on.^[14][15][16] Without an objective measure, how can a teacher grade your wisdom with any validity? If wisdom is a matter of opinion, can a teacher teach you how to act wisely?

Moreover, people acquire wisdom over a lifetime–it is a neverending journey. It is through the accumulation of experience over the years that one achieves wisdom, which classrooms and textbooks cannot replicate.^[17] Importantly, wisdom is action-oriented–it is doing the right thing. The teacher may teach you how to approach a problem. You may write a fantastic paper on a proposed solution, receiving excellent marks in return. Will that give you the courage to act, however, when you are in a real-world situation where the stakes are high and the consequences of failure severe?^[18]

Wisdom cannot be taught. We can, however, identify the skills that wise people rely on and develop those skills. If we cannot teach wisdom, perhaps we can foster its development.

A Path to Developing Wisdom ^[19]

Values guide wise action. Knowledge is required but insufficient for wise action. Wisdom is action-oriented. If you wish to develop your wisdom, learn the role values play in guiding human behavior. Recognize the values operating in organizations and how they interact and conflict. Develop your capacity to manage value conflicts productively.

To develop your wisdom, gain knowledge about your discipline and the world around you. Recognize, though, that our understanding is limited and flawed. Therefore, strengthen your ability to think critically so you can navigate through uncertainty. Recognize that rationality takes many forms–different disciplines learn different things and see the world in varied ways. Be willing to learn from others. The solutions to our hardest problems come not from asserting our knowledge over others, but from creatively combining knowledge to produce innovations.

If you aspire to wisdom, know that you must act. To act effectively requires that you understand how power operates in organizations. Develop your political savvy and strengthen your social and emotional intelligence to manage conflicts and facilitate collective action.

This textbook aspires to be a stepping stone in your path to developing your wisdom. In the following chapter, this textbook presents a more detailed overview of organizational wisdom. Brace yourself. We rely on wisdom to help us navigate situations of complexity and ambiguity. Consequently, it defies a simple definition. Wisdom is not a single attribute, but rather a collection of skills, perceptions, and attitudes. The three structures of wisdom (values, rationality, and power), however, will give us a guiding framework to understand this complex phenomenon.