Our modern society is infatuated with smartness. We highly value “smart” phones, “smart” cars, and “smart” cities. Smart assistants like Siri, Alexa, and Cortana are proliferating and they are barely scratching the surface of Artificial Intelligence (AI)’s potential. Likewise, smart people amaze us with their intellectual prowess and uncanny ability to spot opportunities and attain their goals.
We find, however, that smartness alone, without ethical clarity and discernment, does not keep leaders out of trouble or sustain their success over time — as we see in the case of Harvey Weinstein and Mark Zuckerberg.
For long, we have evaluated — and rewarded — leaders for their intelligence. In today’s complex world, however, we need a different approach to leadership that goes beyond optimizing smartness. We call this wise leadership.
Wise leaders are smart — but they know how to modulate their smartness in different contexts and strive to apply it to serve the greater good. They possess great self-awareness, perceive the world from a larger perspective, decide with discernment, and act with great humility and ethical clarity.
Over the past 10 years, we have interviewed and studied more than 200 executives whom we consider as wise in one dimension or another. After consolidating various dimensions in which people could be wise, we have identified six key capabilities of wise leadership that we formalized as the WISDOM framework. We introduced this framework in our book From Smart To Wise.
In January, The World Economic Forum hosted its Annual Meeting in Davos under the theme “Creating a Shared Future in a Fractured World.” The event offered an instructive setting to observe how wise leaders from around the world embody and express the six dimensions of wisdom. We will use these leaders as reference to elaborate on the six wise leadership capabilities, which collectively form the acronym W.I.S.D.O.M:
W for Work and act with authenticity and appropriateness:
Justin Trudeau, the boyish-looking 46-year-old Canadian Prime Minister, believes heterogeneous societies will shape the new reality of 21st century and leaders must find ways to use differences as a source of strength. He wants every Canadian to have a “real and fair” shot at success. For Trudeau, openness, compassion, equality, and inclusion are the core values that unite his country. He leads by example by showing how to put these values and ideals into practice. In 2015, Trudeau appointed the country’s first-ever gender-balanced cabinet — with 15 women and 15 men. A self-described “proud feminist”, Trudeau is an ardent defender and enabler of gender equality. “Any comment about how a man looks isn’t even an eyelash worth of the systemic discrimination women face,” he notes.
In his Davos talk, he explained how Canada offers parents more options for parental leave and has invested billions in affordable, high quality childcare. It also provides single moms about $9,000 in annual tax-free benefits. Trudeau urged the CEOs at Davos to act appropriately by promoting more women to senior positions and adopting a zero-tolerance policy toward sexual harassment at work. He explained how doing the right thing could also yield big economic benefits: by curbing its gender gap Canada would add $150 billion to its GDP by 2026.
Like Trudeau, wise leaders strive to align their actions with their North Star, which serves as their noble purpose. They act authentically: their words and behavior are always congruent with their true feelings and values. They also act appropriately by matching their actions with the dynamic context in their organization and in the larger community.
I for Insightful and flexible fortitude:
A pastor’s daughter, German Chancellor Angela Merkel was born and raised in communist East Germany. She experienced first-hand how political leaders can divide but also unite people. She was a protégé of former Chancellor Helmut Kohl who reunited Germany after the Berlin wall fell in 1989 (Merkel was 35 then). At a time when the world is more divided than ever, Merkel is on a mission to build an inclusive and united global community. In contrast with many Western countries that close their borders to refugees — or even label them as terrorists — Merkel-led Germany has welcomed over one million refugees and successfully integrated most for them.
Yet, Merkel’s decision has been unpopular in Germany and led to a far right surge that almost cost Merkel her fourth term in the late 2017 elections (Her party CDU didn’t get an outright majority of votes and is negotiating with rival CSU and SPD parties to form a grand coalition). Still, Merkel is sticking to her decision to welcome refugees arguing that “ever since the Roman Empire, ever since the Chinese Wall, we know that shutting ourselves off doesn’t help to protect your borders,” as she noted in her talk at Davos.
Merkel’s fortitude is also rooted in visionary pragmatism: given its rapidly aging population and shrinking workforce Germany would desperately need immigrants to sustain its industrial economy. For Merkel, letting refugees in is a decision that is both morally and economically sound. Her insightful fortitude has enough flexibility that she is willing to reach out to her political rivals to form a coalition and fulfill her vision of a strong and inclusive Germany.
Wise leaders such as Merkel, use their insight — an integral combination of deep self-awareness, keen understanding of the past, lucid grasp of the present, and vision of the future — to decide when to stick with a decision with courage and when to let go with grace. This discernment and flexible fortitude keeps them aligned with their North Star while making course corrections and yields long-term benefits for themselves and their organization.
S for Shift your perspective towards a noble purpose:
French President Emmanuel Macron is passionate about his noble mission: “Make our Planet Great Again.” With the US pulling out of the Paris climate agreement, Macron is assuming global leadership role in the fight against climate change. He is shifting the perspective of his country and the world on climate change by creating a sense of urgency and issuing a call for collection action. “We’re losing the battle (against climate change). We’re not moving quickly enough. We all need to act,” he said.
Aiming to “make France a model in the fight against climate change,” Macron declared at Davos he would shut down all coal-fired power stations by 2021 (France will also ban all fossil-fuel cars by 2040). As part of his Make Our Planet Great Again initiative, Macron is luring top scientists from all over the world with big grants to come to France to innovate in “green” technologies. He is teaming up with other countries on major renewable energy initiatives — such as the International Solar Alliance that France set up with India.
Wise leaders like Macron have a holistic perspective: they see the world as an interdependent, interconnected web of life. They strive to overcome divisions and resolve polarities and paradoxes with integrative thinking (“both…and”, as opposed to “either…or”). They are deeply connected to a North Star, which gives them a sense of purpose that transcends their ego.
D for Decision logic with discernment and intuition:
Jack Ma is an English-teacher turned Chinese Internet billionaire who founded Alibaba, an e-commerce and tech conglomerate valued today at nearly $500 billion. Ma famously said: “a smart man uses his brain; a wise man uses his heart.” All his entrepreneurial life, Ma has heeded his heart to make critical decisions, some of which were counter-intuitive at first but proved to be brilliant in hindsight. For instance, in 2008, Alibaba blocked Baidu — China’s largest search engine — access to its e-commerce site. In doing so, Alibaba lost revenues in the short term. But Ma wanted Alibaba to become the go-to destination for Chinese online shoppers. And his intuition was spot on: today most Chinese buyers start their shopping on Alibaba’s e-commerce portal.
Ma told leaders at Davos they need more than intelligence to decide and act effectively in the age of AI. “To gain success a person will need high EQ (Emotional Quotient); if you don’t want to lose quickly you will need a high IQ, and if you want to be respected you need high LQ — the IQ of love,” he noted. Ma also believes companies make better decisions when they have more women leaders. He said the “secret sauce” of Alibaba’s success are women, who make up nearly 40% of senior management. “If you want your company to be successful (and) operate with wisdom, with care, then women are the best,” Ma observed.
Like Ma, wise leaders decide with both ethical clarity and pragmatism. They use their inner ethical compass to instruct them what is right or wrong in a given situation but also in a larger context connected to a noble purpose. They act mindfully and don’t let strong emotions like fear or greed shape their decisions. Yet, wise leaders do listen to their heart, the seat of intuition (It is important to distinguish intuition from instinct: instinct is shaped by past experiences whereas intuition emerges by integrating past experiences with future insight). As such they decide with discernment: they can judge well in crises and make ethically sound and yet sensible decisions by bringing their body, heart, mind, and spirit to the task.
O for Openness to lead from any position:
In 2012, Malala Yousafzai was heading back home from her school in Pakistan when she was shot in the head by the Taliban for challenging the ban against girls attending school. Malala survived and went on to fight for the right of girls to education. Shy by nature, she rose to the challenge and found her voice — and her calling — as a champion of girls’ empowerment. Despite multiple death threats, Malala has valiantly persisted in her fight and her staunch moral leadership has inspired millions of women worldwide. For her bravery and activism she became the youngest person to receive the Nobel Peace Prize. Despite her notoriety the 20-year old Malala — who now studies at Oxford University — remains very humble and graceful.
At Davos, Malala invited men to also play a big role in the empowerment of women. “We have to teach young boys how to be men. In order to be a man you have to recognize that all women and all those around you have equal rights and that you are part of this movement for equality.” She cited her father as a role model for men who want to be feminists: he defied strong social taboos by sending her daughter to school and allowing her to speak out. Malala explained that girls’ education is a collective responsibility that all world leaders must assume. “All (political leaders) send their children to school. But when it comes to the rest of the world’s children, they struggle a bit. So you have to keep on reminding them,” she pointedly noted.
Wise leaders such as Malala demonstrate what we call role clarity. They humbly assume any role that is optimal in a given situation and is aligned with their North Star. They perform their role with detached engagement — that is, they act enthusiastically and yet without emotionally losing themselves in it. Deeply self-aware, they let their authentic-self shine through any role they perform, which inspires others. Wise leaders are also what leadership expert Liz Wiseman calls multipliers — they like to cast others into a lead position and let them shine. Yet, in times of crises, they courageously step forward to lead from the front and galvanize others to follow them.
M for Motivated by enlightened self-interest:
On January 16, a week before Davos, Larry Fink, the founder of BlackRock, the world’s largest asset manager with $6.3 trillion in investment, sent a letter to CEOs of public companies titled “A Sense of Purpose.” In it, Fink exhorted CEOs to radically shift their perspective, decision logic, and motivation. Fink urged CEOs to eschew short-term gains and implement a long-term strategy guided by a North Star. “Without a sense of purpose, no company…can achieve its full potential. It will succumb to short-term pressures…and sacrifice investments in employee development, innovation, and capital expenditures that are necessary for long-term growth,” Fink warned. He also cautioned CEOs that their firm will “lose the license to operate from key stakeholders” unless it shows how it makes a positive contribution to society. “Larry’s letter” — as Fink’s missive to CEOs came to be known — became a major talking point among CEOs attending Davos.
To encourage its portfolio companies — and their CEOs — to make these changes, BlackRock is doubling the size of its investment stewardship (IS) team over next three years. This team directly engages with companies on Environmental, social, and governance (ESG) factors that can sustain their long-term financial performance. ESG criteria range from diversity to board effectiveness to climate change (studies show strong positive correlation between ESG and firms’ economic performance). Recently, the IS team sent a letter to the 367 Russell 1000 companies with fewer than two female directors to justify the lack of diversity on their boards. Today, socially responsible investments total nearly $9 trillion. By combining these with BlackRock’s $6 trillion, Fink is making a whopping $15 trillion available to firms that want to positively contribute to society.
Wise leaders like Fink are purpose driven: they go beyond maximizing their self-interest and endeavor to serve others. Intrinsically motivated, they embark on a project and stay with it because it serves a noble purpose. Eschewing competition and short-termism, they patiently engage all stakeholders inside and outside their organization in win-win scenarios to co-create sustainable long-term value for all parties.
Wise leaders are not selfless: rather, they are driven by what we call enlightened self-interest. Instead of reasoning “What’s in it for me?” they ponder “What’s in it for all of us?” with the belief that a rising tide will lift all boats — even their competitors’. As such, they willingly contribute to the society at large knowing that by doing so, they would reap rewards for themselves and for their organization.
Using the examples above, we elaborated on the six WISDOM capabilities that make a leader truly wise: (s)he works and acts authentically and appropriately, demonstrates insightful and flexible fortitude, shifts his/her perspective — and others — towards a noble purpose, decides with discernment and intuition by engaging his/her whole being (mind, body, heart, spirit), is open to lead from any position, and is motivated by enlightened self-interest.
To be universally recognized as being wise, however, a leader needs to be wise not just in one or two of these capabilities but in all six. This is why there are very few leaders whom we can all agree to be entirely wise.
We can also use the WISDOM framework as an analytical tool to assess the performance of smart leaders and identify areas of improvement. We believe that US President Donald Trump, who also spoke at Davos, is the archetype of smart leadership: self-centered, opportunistic, and instinct-driven. If we evaluate his words and actions through the lens of WISDOM, the contrast between him and the wise leaders mentioned above is striking.
Unlike Trudeau who acts authentically and appropriately by uniting people and enabling gender and social equality, Trump behaves as if he is the “the Divider in Chief:” his comments and attitude towards women and minorities has made the American society hyper-polarized. While Merkel shows insightful fortitude by sticking to her pro-refugee policy and upholding Western democratic values, Trump is reversing the long-held US tradition of openness with his hardline approach to immigration in general and “Dreamers” in particular.
Macron’s internationalist perspective clashes with Trump’s America First worldview. At Davos, Trump began his speech with “I’m here to represent the interests of the American people.” Instead of enlightened self-interest, President Trump is promoting enhanced self-interest. Whereas Jack Ma decides with poise and discernment using his mind and heart with a long-term view, Trump has an impulsive decision-making style — including his use of Twitter to make big announcements — that most Americans find jarring.
Trump clearly lacks Malala’s role clarity as a humble servant leader. Trump’s Davos speech felt like a long self-congratulatory statement as he listed all his achievements in his first year in office — instead of what he is offering to the global community.
Larry Fink’s motivation is to do good for the society and the planet by co-creating long-term socio-economic value with all stakeholders. Trump, however, is motivated to serve the near-term goals of a select few. His tax cuts mostly benefit the rich — worsening America’s inequality. His decision to pull the US out of the Paris climate deal and overturn environmental regulations may benefit the fossil fuel sector in the short-term but it will aggravate climate change and seriously hurt US competitiveness in renewable energy in the long run.
It is unclear if Trump would ever be able to evolve from a smart to wise leader by incorporating the six WISDOM capabilities in his decision-making, action, and communication. One can only hope.
We must note here that, after 10 years of research, we have not found a single leader who embodies all six dimensions of wise leadership. The insightful and progressive leaders we mentioned earlier in this article have mastered — and practice — two or three of the WISDOM capabilities at the most, but not all of them. Our perspective is that one might never be THE wise leader but we all can become wiser every day if we keep expanding our self-awareness and become more conscious about how we decide, act, and relate to others.
We invite you to use the WISDOM framework to analyze and evaluate your own strengths and weaknesses as a leader.
You can visit sixcapabilities.com to get a free assessment of your wisdom.
This article was originally published in Thinkers50.com