From Smart to Wise

Acting and Leading with Wisdom

Prasad Kaipa and Navi Radjou

Copyright 2013 Jossey-Bass, an imprint of John Wiley & Sons getAbstract 2013

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Take-Aways
Some leaders are business smart and operate in the red zone. Others are functional smart; they operate in the blue zone. Though viable, the personal-gain aspect of both leadership styles makes them inadequate to the needs of 21st-century enterprises. Better to be a wise leader. Wise leadership involves leveraging smartness for the greater good by balancing action with reflection and introspection, gateways to humility, and ethical clarity. Every wise leader must cultivate and integrate six capabilities: perspective, action orientation, role clarity, decision logic, fortitude and motivation. Connecting with your noble purpose changes your perspective, so you can act authentically and appropriately. Better role clarity enables you to set your ego aside, and pay less attention to your title and more attention to what others need. Discernment and discretion are the hallmarks of a wise leaders decision logic. Develop flexible fortitude to help you persevere as circumstances change. Wise leaders motivate and practice enlightened self-interest.

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Recommendation
Leadership and innovation consultants Prasad Kaipa and Navi Radjou present a method that can add depth and dimension to your leadership capabilities in six areas. They explain the differences between functional-smart leaders who operate in the blue zone and business-smart leaders who operate in the red zone. Noting that each type has its strengths and limitations, Kaipa and Radjou explain why neither compares to the wise leader who embodies the best of both, and then some. Their manual includes a self-assessment test, a guided program for embarking on your journey toward wise leadership and examples of leaders who personify wisdom. While noting that many of their concepts are tried-and-true, getAbstract humbly suggests that this concise, highly motivational book might help you find the wisdom you seek.

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Summary
Its Good to Be Wise Some successful leaders are better at seeing the big picture, while others shine at implementing strategies and still others excel at innovation. Each approach has merit. But merely being smart no longer suffices for the challenges of complex and uncertain times, and for achieving the personal and professional satisfaction leaders can and want to derive from their leadership efforts. Moving beyond smartness requires persistent dedication to practicing wise leadership skills. Smart leaders are either: 1. Functional smart These leaders exhibit expertise in a particular area such as R&D and deliberate before acting. Conservative about risk, they limit their activities to what they know best. 2. Business smart These leaders like risk, see the bigger picture, have a competitive streak and take a broader perspective. Both types of leaders stay within their comfort zones. However, wearing blinders or viewing the world through a perceptual filter can cost them and their companies. Metaphorically, business-smart leaders wear red filters and operate in the red zone when concentrating on business. Functional-smart leaders have blue filters and operate in the blue zone of short-term thinking. People are born without filters but develop them as they grow up, gain life experience, learn their strengths and limitations, and adjust to external conditioning. Perceptive business leaders understand the value of transcending the either-or choices inherent in only one type of smartness. They seek a kaleidoscope perspective that draws on the best of each mode at appropriate times. Wise leadership is leveraging smartness for the greater good by balancing action with reflection and introspection, gateways to humility, and ethical clarity. Consider Tim Cook, who became Apples CEO in 2011, and Harvard dropout and Microsoft co-founder Bill Gates. Gates personified the business-smart archetype by wearing his red filters and operating in the red zone. While battling an antitrust lawsuit filed in 1998, Gates made a major course correction in his life journey and stepped down as Microsofts CEO. He launched a philanthropic foundation with his wife. Gates evolved from a smart leader to a wise one. Cook made his professional mark wearing the blue filters of a functional-smart leader, notably in Apples supply-chain operations. Taking the helm when Steve Jobs became terminally ill, Cook realized he
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needed red filters and like Gates sought a more balanced leadership perspective. The six capabilities that wise leaders and those who are aiming to become wise leaders embrace are: 1. Shift Your Perspective: Connect to Your Noble Purpose Your perspective is the foundation on which you build the other five capabilities. Shifting and widening your perspective enables you to alter and mature, which is necessary for achieving wisdom. Successful smart leaders in the red and the blue zones must expand their perspectives to evolve from being smart to being wise. Consider, for example, business-smart Raj. In his early 40s he took his software company public and hired a CEO whose controlling leadership style conflicted with the firms entrepreneurial mores. Upon the CEOs departure, Raj resumed leadership and restored the firms vitality and success, but the effort sapped him. Working with a coach, Raj realized his narrow business focus a typical red-zone approach had jeopardized his family relationships and personal goals. By reorienting his red-zone mental model and through deliberate effort to achieve greater balance Raj gained the fuller, more rewarding lifestyle he sought. Austrian psychiatrist Viktor Frankl spent three years in a Nazi concentration camp. Despite physical deprivation and torture, Frankl recognized that his mind and spirit were free, a shift in perspective that gave purpose to his abject circumstances and helped him find meaning in life before and after his release. Smart leaders of both types who shift their perspectives will see new patterns in business and life, and gain important insights that increase wisdom. Seek your noble purpose and adopt the Buddhist practice of mindfulness. Achieve openness by reframing your perspective as your circumstances change. 2. Act Authentically and Appropriately Taking action is the heart of practical wisdom. Wise leadership requires being fully present in the moment and taking steps that are appropriate to others and authentically reflect your values. You must balance context sensitivity and groundedness in the face of challenges. V.R. Ferose, managing director of SAP Labs India, had a young staffer die when employee morale was already low. The same day, Feroses firm was to be interviewed for possible ranking as one of Indias best employers, and an Oscar-winning film director was scheduled to give a motivational speech to employees. Ferose handled the situation deftly by
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refusing to cancel the speech. Instead, the director revamped his speech to discuss creativity and spirituality. And SAP Labs India earned the fourth-place ranking in the survey. Ferose wasnt simply lucky. As the youngest managing director of an Indian multinational, he lowered employee turnover from 19% in 2009 to 7% in 2012. You must nurture the wisdom you need to adjust your actions to the present circumstances, while simultaneously acting within the parameters of your personal and professional values and goals. Learn how to be appropriate without losing authenticity. Respect yourself and others. Avoid adopting what Medtronic CEO Bill George calls a fake leadership style keeping up a faade or a borrowed style doing what you learned to do in business school. Align your actions with the insights and discoveries [your noble purpose] brings. Red- and blue-zone leaders can find a wiser middle ground by acting with bold prudence and context sensitivity, and by maintaining equanimity, heeding intuition and acting with integrity. 3. Gain Role Clarity: Lead from Any Position A wise leader moves nimbly among different roles within the same organization or in different companies. Achieve role clarity and you can be fully engaged, taking on different roles or transitioning through different contexts without judging or getting attached. Smart leaders who view the world through tinted filters have trouble separating their roles from their identities. They might act inauthentically or inappropriately. Wise leaders put ego aside. They pay attention to what others need and not to their own titles. Being able to lead from any position means being secure enough to support others as a servant leader. Having wisdom means owning your responsibilities while being unhampered by your ego, emotions or personal preferences. Leaders mired in the function-focused blue zone often cannot engage fully with their roles. In crises, they usually step back without acting. Conversely, red-zone leaders have difficulty separating from their roles. The wise leader understands when he or she can take charge and when it is better to delegate leadership to others. To gain greater role clarity, practice mindfulness, pursue a broader view of your various roles, and share your role and its perks with colleagues. 4. Clarify Your Decision Logic: Decide with Discernment Leaders make decisions rationally, nonrationally or irrationally; analytically or emotionally; and with unconscious or conscious brain processing. Cognitive research reveals previously unknown connections among different parts of the brain during the decision-making process, including areas formerly
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thought to be autonomous. If you make a decision when you are angry even a decision you favor implementing it will always produce anger in you. Smart blue-zone leaders make cautious, low-risk choices to implement predictably safe actions. They put off decisions and turn to authority figures for guidance. They rarely show discernment. Smart red-zone decision makers gravitate toward high-risk choices offering big rewards. They rush into decisions without input from others. They excel at helping others make crucial choices but are less capable with their own. Wise decision making must include the data, analytics, values, logic and expectations you bring to the table. How you blend them reflects your ability to make confident determinations based on insight and judgment, and shows how you incorporate logic, instinct, intuition and emotion. Every leader has his or her own decision logic [defined] as the system, process and principles of reasoning used in making important decisions. 5. Develop Flexible Fortitude: Know When to Hold and When to Fold When you make a decision, follow through on implementation while remaining open to course corrections as evolving circumstances warrant. Functional-smart blue-zone leaders often limit themselves to narrow structures, working stubbornly and methodically until the job is done even if their hearts arent in it. Their high-quality work compensates for their slowness. Business-smart red-zone leaders exhibit similar tenacity, but from an energetic, competitive stance based more on personal than organizational gain. Business-smart leaders bounce back from failures with resilience but seldom learn from their mistakes. Smart leaders exhibit faulty fortitude in one of two ways: Functional-smart leaders defend their turf at all costs; business-smart leaders give up too soon and jump to more attractive opportunities. Wise leaders understand when to keep pursuing an avenue and when to change course. These leaders embrace the Eastern tradition of surrendering to the context with both will and grace. They submit their egos to unpredictable outcomes in the name of noble purpose and retain their equilibrium in the face of changing circumstances. Harness your noble purpose, manage your energy selectively, foster flexibility through ethical clarity [and] demonstrate fortitude as a team effort. 6. Discover Drivers of Your Motivation: Act with Enlightened Self-Interest Ratan Tata, the former CEO of Indias largest industrial conglomerate, models his practice of enlightened self-interest on the values of his great-grandfather. The elder Tata founded Tata Group in 1868 on sound...business principles,
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prioritizing shareholder interests and employee well-being. In 2009, Tata Group launched a $2,000 car for the emerging Indian middle class. Tatas main goal was increased public safety and profit. As wise leaders do, act out of enlightened self-interest, balancing the need to create revenue with the publics well-being. Safety and security drive blue-zone leaders; red-zone leaders seek fame and money. But wise leaders embrace an other-centered approach and aim to serve others. Leadership based less on ego and more on noble purpose can ensure long-term success, as well as attract workers and customers motivated by social good. Making the Leap to Wisdom Nurturing each leadership capability enhances your leadership skills. Cultivate their interconnections to accelerate your transition from a smart leader to a wise one. How you integrate the six capabilities will determine your transition to leading with wisdom. No two leaders travel the same path. Your personal journey will require bravery and tenacity. Dont think you must travel alone; connect with others interested in the same goals. Form wise teams, organizations, communities and nations and engage in collective pursuit.

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About the Authors

CEO adviser Prasad Kaipa is the founding executive director of the Center for Leadership, Innovation and Change at the Indian School of Business. Navi Radjou is a World Economic Forum faculty member and co-author of Jugaad Innovation.

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Quotes
Wise leaders are people (not just business leaders or politicians) who step up to take action in the service of others. To be effective, leaders need to find partners...Yet to orchestrate partner networks effectively, leaders need to rein in some of their own self-interest. Wise leadership consists of applying and integrating smartness wisely for mutual, instead of just personal, benefit. Wisdom contextualizes your smartness and helps you act with role clarity, humility and intuition to be effective in your organization. A wise decision logic anchored by ethical clarity will enable you to avoid the decision-making traps that smart leaders often fall into, such as overreliance on data, rushing into decisions...or favoring short-term gains. Smartness is like a wild horse: riding it can be exhilarating for a while, until you are thrown from it. When wisdom provides the moral compass, smartness can become even more potent. Wise leaders transcend both kinds of smartness; they see the world as a kaleidoscope with all its many varied colors and then act out of that fuller perception. With role clarity, there is equanimity and clarity in crisis situations and a lack of emotional attachment that is, you are able to experience your emotions without judging or getting attached to them. Wisdom is both timeless and timely. A leader with role clarity can step in and out of different roles in different contexts with ease and be fully engaged in any one of them, knowing that it is just a role. Self-deception is a major stumbling block to wisdom; its a mental filter that limits our ability to be authentic and appropriate. Wise leadership is not about giving up our smartness, but transcending it and gaining a broader perspective on life. Wise leadership succeeds where smart leadership cannot.

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