Wise Leadership in Organizations: Integrating Eastern and Western Paradigms

Abstract

In today’s highly turbulent world, organizational leaders are largely adrift in an uncertain global interconnected economy, where not only cultures but also religions, their belief systems and their values, are in increasing interaction and potential conflict. The aims of this chapter are to (1) present concepts of wisdom and wise leadership that are based on both eastern and western philosophical, religious, and spiritual traditions; (2) discuss the relevance of wise leadership at work for stakeholders, including employees, managers, and local communities as well as the sustainability of the physical environment; and (3) propose implications for the development of effective wise long-term organizational leadership. This chapter aspires to provoke readers to conceive of how organizations can benefit from wise leader/managers, who utilize wisdom for both organizational and societal sustainability in their daily decision-making.

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Introduction

The beginning of wisdom is this, get wisdom;

With all your getting, get insight.

Proverbs

If wisdom is present,

then everything else becomes possible.

U. Tejaniya (2008)

Today’s world is laden with extreme uncertainty, which presents high risk as well as great opportunity. In this context leadership is far too often self-oriented rather than oriented toward the greatest good for all relevant groups and individuals, not just the shareholders. Most organizations, and their leaders, are measured by criteria that explicitly, or implicitly, aim to maximize short-term profitability (i.e., ROI, ROE, ROA, or ROS). The fundamental economic model-in-use appears to be that the most efficient use of financial and human capital is the best way in which leaders can create organizations that make the world function maximally for its inhabitants. (Note: Unless otherwise stated the terms leadership and management will be used interchangeably, knowing full well that there is a long-standing debate about their differences.)

There is clearly a deep crisis in human affairs that is occurring virtually at all levels of scale from the individual to the organizational to the societal. The symptoms of the crisis are numerous. At the societal level, if we turn on almost any television news program, we observe the breakdown of social structures occurring not only in areas of the developing world, but also in western Europe and North America. Most people are at a loss as to how to intervene in this complex of “breakdowns” that are occurring. Wisdom seems to be noticeably lacking at numerous levels of social systems.

At the organizational level, one simply has to ask people in the workplace what sense of meaning, purpose, and, ultimately, joy they derive from their work. At the individual level, we observe the lack of enthusiasm with which many, if not most, people engage in their daily work tasks. Something needs to change, but the complexity of the transformation that is called for seems intractable.

About 15 years ago, Fritjof Capra (1997, p. 6) stated the challenge very succinctly in The Web of Life: A New Understanding of Living Systems:

There are solutions to the major problems of our time, some of them even simple. But they require a radical shift in our perceptions, our thinking, our values... (However,) the recognition that a profound change of perception and thinking is needed, if we are to survive, has not yet reached most of our corporate leaders, either, or the administrators and professors or our large universities.

Given the depth of the problems, we ask, “Why is this and how can we effect deep wisdom-inspired transformation in both organizations and their leaders?” Close attention to the processes of organizations reveals the depth of the need for transformation in the organizations we inhabit. Without wisdom and compassion-inspired action, we will fall far short of our true potential as human beings, organizationally as well as individually. But how do we accomplish this?

Leadership is a product of subtle, often invisible feelings, thoughts, and intuitions (Badaracco 2002). Visible behavior is just the surface of how wise leaders create effective organizations. The concept of wisdom-inspired action and leadership is obviously important for today’s organizations.¹

In sum, organizational leadership in the twenty-first century is embedded in an economic and financial environment which is highly uncertain and, in turn, operating within an evolving global order where not only cultures (Laurent 1983; Adler 1986) but also religions, their belief systems, and their values are in increasing interaction (Smith 1991).

The events of the past several years, with the near-total meltdown of the world economy and its current “recovery,” should have provided the motivation to develop alternative ways of conceptualizing and measuring organizational effectiveness and returns for society. The so-called triple bottom line—profits, social responsibility, and the quality of the environment—is an alternative which has been extensively considered and written about (Fry and Slocum 2008). But, to date, the efforts have not had their intended effects.

The overall aim of this chapter is to delineate a more radical alternative to the prevailing paradigm, by addressing several questions, beginning with these two:

• 1. What would organizations look like if they were measured by how much wise action and decision-making they generated, in addition to being measured by profitability?

• 2. What are the implications for management development if wisdom is included as one of the primary requirements for managerial effectiveness?

Making Sense of Wisdom: Paradigms and Perspectives from the East and the West

Wisdom is the foundation of virtually all spiritual practice, in both the east and the west. Wisdom takes on several forms, including wise attention, wise action, wise speech, wise thoughts, and awareness of the workings of the mind itself.

More formally we can define “wisdom” and understand it in several ways that emphasize varying aspects of the concept:

• (1) Psychological: “An individual is wise to the extent he or she uses successful intelligence (the ability to succeed in life, given one’s own conception of success, within one’s socio-cultural environment) as moderated by values to (a) seek to reach a common good, (b) by balancing intrapersonal (one’s own), interpersonal (others’), and extrapersonal (organizational/ institutional/ spiritual) interests, (c) over the short and long term, to (d) adapt to, shape, and select environments” (Sternberg 2002, p. 306).

• (2) Managerial: Managerial wisdom is “... the ability to detect those fine nuances between what is right and what is not... the ability to capture the meaning of several contradictory signals and stimuli, to interpret them in a holistic and integrative manner, to learn from them, and to act on them” (Malan and Kriger 1998, p. 249).

• (3) Organizational: “The wise organization is characterized by institutionalized structure of checks and balances (logical); viability-enhancing leadership (ethical); behaviourally grounded change processes (aesthetic); accepting, empathic, and congruent understanding (epistemological); and a vision that inspires courage and hope to make a positive difference (metaphysical)” (Kessler and Bailey 2007, p. lxi).

• (4) Economic: “Wisdom is a deep understanding and realization of people, things, events or situations, resulting in the ability to choose, act or inspire to consistently produce optimum results with a minimum of time, energy or thought... Wisdom is also the comprehension of what is true or right coupled with optimum judgment as to action” (Wikipedia, downloaded 29 September 2011).

Spiritual approaches and definitions of wisdom and wise leadership add further complex aspects to the construct of wisdom which can be approached from a number of viewpoints, paradigms, and worldviews (see Tables 16.1 and 16.2). In light of the commonality underlying the diverse sources of wisdom in these exhibits, leaders would do well to consider how the wisdom or lack of wisdom embedded in their daily decisions and actions shape the cultural norms and overall climate of their organizations (Goldstein and Kornfield 1987; Goldstein 2002).

Table 16.1 A sample of spiritual/religious approaches to wisdom

Table 16.2 Wisdom paradigms and sub-paradigms

For example, one of the central Buddhist teachings concerns development of the “four immeasurables” (i.e., in pali, the so-called brahmaviharas which include deep joy (mudita), equanimity (upekkha), loving-kindness (metta), and compassion (karuna)). Wisdom, in the Buddhist and Taoist traditions, has been intentionally developed and practiced for over 2,500 years to increase the presence in the world of each of the preceding “immeasurables.” This approach to wisdom occurs in all three of the major lineages of Buddhism—the Theravada, Mahayana, and Vajrayana streams. If these qualities were being intentionally developed in today’s organizations, even by a minority, it would have profound positive effects on both the organizational climate and culture in inestimable ways, as well as likely strong commitment to the vision and values of the organization.

The ways in which wisdom and the wise leader are conceptualized across five major religions are summarized in Table 16.3. Exemplars of wise leadership and the bases for morally wise leadership differ across each of these traditions, as a result of their respective unique historical customs, beliefs, and processes of institutionalization. However, the underlying values and virtues that each espouses are largely cognate, if not nearly identical. As a result, the manifestation of wisdom differs, but the construct of wisdom has many commonalities across both western and eastern paradigms. There are, however, some notable differences which will be discussed in the next section.

Table 16.3 Comparisons of wise leadership across five religio-spiritual traditions

Toward an Integrative Understanding of Wisdom

Figure 16.1 is a framework for conceptualizing wisdom and, more generally, the acquisition of knowledge that involves the reconciliation of two sets of dynamic tensions that are observed to be present in most organizations (March 1991, 2011). The first tension is between the need to be consequential (goal-directed behavior) and the tendency to be playful. The former, consequentialism, tends to lead to exploitative strategies, and the latter, playfulness, tends to support and lead to exploratory strategies. Without goal-directed behavior, an organization and its managers are adrift, not knowing where the firm should be heading nor knowing how to reach key objectives and goals. This vertical dimension in the framework essentially involves an orientation toward doing (engaging in activities), and the horizontal dimension is an overall orientation toward cognizing, i.e., how one expands knowing about the unknown. Figure 16.2 places a number of the world’s spiritual paths and religions in the context of this framework. Forms of wisdom can occur anywhere in this “doing-cognizing” space, but are more easily accessed by some wisdom traditions over others.

Fig. 16.1

The sources of wisdom: consequentialism, playfulnessness and supra-rationality

Fig. 16.2

Paradigms of wisdom orientation in organizations

The types of wisdom are differently categorized depending on the tradition or paradigm. For example, Buddhist authors (Pandita 1991; Migyur 2009; Tejaniya 2011) refer to several increasingly refined kinds of wisdom: (1) information (sutamaya panna) that comes from reading books, conversations, and listening to the words of others about wisdom; (2) understanding that comes from reflection and reasoned analysis about what one knows and perceives (panna); and (3) insight (cintamaya panna) that comes from direct experience of the reality and the nature of the way things are.

Wisdom, Virtues, and Effective Leadership

Seek knowledge from the cradle to the grave.

Go in quest of knowledge, even unto China.

Hadith of Mohammed

The Tao is called the Great Mother: empty, yet inexhaustible,

it gives birth to infinite worlds.

It is always present within you.

You can use it any way you want.

Tao Te Ching, Chapter 6

The importance of wisdom and its salience for effective leadership has received varying degrees of acceptance in the management literature. For some, when linked to spirituality, wisdom has come to be viewed as the means by which religious beliefs can positively impact leaders, the workplace, and even society (Kriger and Seng 2005; Goldman-Schuyler 2007; Fry and Kriger 2009).

In a more reactive way, wisdom has at times been linked to myopia-inducing extreme religious views making it a marginal topic in relation to understanding effective leadership (Collier and Esteban 2000; Painter-Morland 2008; Pruzan 2011). On the other hand, there are leaders of large corporations who freely admit that they are driven by an intrinsic commitment to wisdom and deeper values (Bouckaert 2011; Kaipa and Kriger 2010; Pruzan 2011). Here we find a likely missing link between the normative core of managerial ethics and various philosophical and spiritual traditions which is useful to understanding wisdom in business organizations. However, this kind of thinking has not fared well in a world where businesses, and business schools, favor rationality, consequentialism, and the pursuit of material goals over a more balanced set of values and virtues (March 2011). Goodpaster (1994) calls this teleopathy, a form of “goal sickness” which can lead to dispassionateness, a detachment of compassionate feelings from the calculations of the mind. What can be done to build a bridge between wise ethically driven leadership and economic consequential goals?

One aspect of the solution lies in the valuing and development of virtues, what Aristotle termed the “golden means,” which are useful in reconciling dilemmas in decision-making arenas. In the business environment, these virtues are:

• (1) Prudence—neither being overly short term nor too long term in time horizon

• (2) Temperance—neither too narrowly materialistic (want driven) nor too broadly dispassionate (idea driven)

• (3) Courage—neither reckless nor too risk-averse

• (4) Justice—neither too anarchic regarding law nor too compliant

• (5) Loyalty—neither too shareholder driven (private sector thinking) not too driven by other stakeholders (public sector driven) (Goodpaster 1994, p. 55)

Obviously, the aim is to achieve an appropriate balance between the extremes in order to realize wise leadership. Wise leadership based on virtues, according to Aristotle, is not culture dependent. Virtues are argued to be objective features of being human, and overall not relative to any specific culture. With regard to business ethics, wise leadership based on virtues is not the same as following rules, but rather it is the art of remaining open and willing to respond ethically in any context:

Nussbaum (1993, pp. 259–260) describes some of the universal features of wise leadership:

… Aristotelian virtues, and the deliberations they guide, unlike some systems of moral rules, remain open to revision in light of new circumstances and new evidence. In this way, again, they contain the flexibility to (attain) local conditions that the relativist would desire – but, again, without sacrificing objectivity... All general accounts are held provisionally, as summaries of correct decisions and as guides to new ones.

Furthermore, Adam Smith (Smith, 1975 (1790), p. 140) in his Theory of Moral Sentiment also offered advice regarding the importance of virtue:

Man, ought to regard himself, not as something separated and detached, but as a citizen of the world, a member of the vast commonwealth of nature (and) to the interest of this great community, he ought at all times be willing that his own little interest should be sacrificed.

Clearly, for Smith, prudence (and wisdom) goes far beyond the simple maximization of profits motivated by self-interest, even though it is helpful for the individual, where “humanity, justice, generosity, and public spirit, are the qualities most useful to others” (p. 189).

Two cases, Stormberg AS, a Norwegian clothing company, and Whole Foods, a US supermarket company, will next be used to illustrate the framework and its efficacy for understanding wisdom at work.

Two Illustrative Cases

When you know yourselves, then you will be known...

But if you do not know yourselves, then you dwell in poverty, and you are poverty.

Jesus of Nazareth in The Gospel of Thomas

We are what we think. All that we are arises with our thoughts.

With our thoughts, we make our world.

Gautama Buddha

Case No. 1: Stormberg AS

To illustrate virtues as the basis of wise leadership from a western (in this case, Christian) perspective, we have chosen a Norwegian company and its leader, Steinar Olson, who is both the leader/manager and the owner of Stormberg AS, a sports clothing company. From its beginning, Stormberg had a clearly formulated and value-based mission statement consisting simply of “we care.” Recently this has been extended to “we want to make the world a better place.” The corporate Web site espouses four values: honesty, courage, including, and sustainable. In order to give work a deeper meaning, Olson’s strategy from the beginning has been to involve employees in all major decision-making processes. Stormberg stated (personal interview):

My employees and I don’t believe we can change the world. (But) we know we can change a small part of it. We know that through our caring, several hundred workers in Chinese factories have a better day at work. We know that by caring about safety in the children’s clothing we produce, the accident rate in daycare centers has been reduced. We know that by caring for each other in the company we have created a pleasant and safe workplace for everyone, including those who are otherwise on the outside.

In an interview with Mr. Olsen as CEO, we found that he sincerely believes in people and their ability to contribute with their own unique resources—if only they are given the opportunity. Olsen’s sense of caring is fundamental to his notions of ethical and social responsibility. In his words, “Social responsibility in companies is fundamentally simple. It is about caring, about having the courage to do things in a simple, yet different, way.”

The firm also involves employees in the recruitment and employment of former prisoners and drug addicts. This has had a strong impact on Stormberg’s organizational culture, where the employment policy creates and strengthens positive capacities in organizational members. The value added to the organization is (1) heightened awareness of the need to care for others, whatever their past behavior, and (2) a greater capacity to dare to be different. It fosters a shared set of understandings of how ethics-driven behavior and business results can work together, inside and outside the company. Olsen’s view is consistent with understanding that business organizations need to engage in the development of a society where individuals want to do business, since businesses are influenced by the society in which they operate. In the final analysis, societal problems often affect, either positively or negatively, the efficiency and effectiveness of the organization (Freeman and Vea 2003). Consequently, Olsen’s view, which is based on moral justice and caring for others, is oriented toward the realization that the common good is in the long-term interest of the individual organization.

Case No. 2: Whole Foods

The Whole Foods case involves John Mackey, its visionary founder and CEO. Starting with only $45,000, he developed the company within 30 years into a business with over 36,000 employees, $5 billion in annual revenues, and a market capitalization of more than $8 billion. According to Sisodia and Wolfe (2007), Mackey, who is a practicing Buddhist, also draws inspiration from Adam Smith’s work The Theory of Moral Sentiment and his thinking that human nature is not solely driven by self-interest: values such as sympathy, empathy, friendship, love, and the desire to do good are consistently found to be present in the actions of wise organizational members. Mackey formulated this in the following manner:

At Whole Foods we measure our success by how much value we create for all six of our most important stakeholders: customers, team members (employees), investors, vendors, communities and the environment … our potential as human beings, is to take joy in the flourishing of people everywhere…. To extend our love and care beyond our narrow self-interests is neither antithetical to our human nature nor to our financial success. Rather, it leads to the fulfillment of both … The ideas I am articulating result in a more robust business model than the profit maximization model that it competes against… These ideas will triumph over time, not by persuading intellectuals and economists but by winning the competition test of the marketplace. (quoted in Sisodia, p. 264)

In 1997 Whole Foods published its Declaration of Interdependence, the purpose of which is to unite stakeholders by highlighting the importance of each group. As stated on their Web site:

Balancing the interests, desires, and needs of stakeholders … requires participation and communication by all our stakeholders. It requires listening compassionately, thinking carefully, and acting with integrity. Any conflicts must be mediated and win-win solutions found. Creating and nurturing this community of stakeholders is critical to the long-term success of our company.

Implicit in this Web statement of the company’s “Declaration of Interdependence” are aspects of wisdom and underlying values that reflect the Buddhist perspective of the founder. For example, “interdependence” is the same as the Buddhist belief in the codependent arising of all beings and phenomena, i.e., that everyone is found to be interdependent when one traces the network of causes and effects. Also, the emphasis is on caring and compassion for all relevant stakeholders and involving them actively in the direction and policies of the firm. Every 5 years the company brings together representatives of each stakeholder group to collaborate in designing the next 5-year strategic vision to shape the future of the company. This policy is highly reminiscent of and similar to the Judeo-Christian injunction, “To love one another as oneself.”

Both these cases illustrate the power of wise leadership, where the emphasis is not just on executing leadership via autocracy, but also on the empowering, listening, and inspiring of others to be involved in the search for the best for all.

Implications and Conclusion

The ancient Masters were profound and subtle.

There is no way to describe it;

all we can describe is their appearance...

The master doesn’t seek fulfillment.

Not seeking, nor expecting,

she is present and can welcome all things.

Tao Te Ching, Chapter 15

The preceding diverse religious philosophies and worldviews, as a result of numerous adjustments to societal and human challenges over centuries, provide a needed foundation for the generation of ethical behavior and long-term appropriate strategic action in organizations. We shall conclude with implications for leader/managers who wish to encourage and develop wisdom in their organizational units, albeit keeping in mind the above excerpt from the Tao Te Ching which cautions us to recognize that the highest forms of wisdom, according to the Taoist and other eastern traditions, cannot be described, only realized.

Implication 1: The eastern wisdom traditions (e.g., Taoism, Advaita, Buddhism) can be perceived as superior to the western wisdom traditions (i.e., Christianity and Judaism) in that they facilitate greater integration of apparent opposites (e.g., both rationality and suprarationality). (This highlights the importance of having a process orientation that favors the use of and-also logic.) See Figs. 16.1 and 16.2.

Implication 2: The western wisdom traditions can be perceived as superior to the eastern traditions in their ability to allow human activity to focus to a greater extent on consequential achievement through the valuing of rational intentionality. (This highlights the importance of having an outcome orientation that favors the use of either-or logic.)

Implication 3: The field of organizational wisdom will increasingly involve the marriage of both eastern and western traditions and approaches. These have been largely separate and distinct for millennia until now but are currently converging in organizations because of the need for wisdom to embrace multiple paradigmatic sources.

The real challenge for organizational leaders in the turbulent, complex business environment of the twenty-first century is to develop cognitive and behavioral competencies that include a number of aspects of enduring enacted wisdom. Not only leaders but also all organizational members should develop the following in order to create wise, sustainable organizations:

• 1. The ability to embrace both eastern and western paradigms that draw upon their respective rich spiritual and cultural traditions, while discarding those elements that are extremist or advocating that their way is the only way

• 2. The cognitive ambidexterity of simultaneously valuing and having access to rationality (i.e., logical analysis and reasoning) at the same time as suprarationality (e.g., intuition and inspiration), choosing depending on the situational appropriateness (see Kahneman 2011)

• 3. The ambidexterity of being able to be both playful (which facilitates the exploration and creation of new business models, products, and services) and consequential (which facilitates the exploitation of competencies and firm resources to increase efficiency in the production of existing products, services, and attendant business processes). See March (1991, 2011)

• 4. The ability to utilize the faculty of creative imagination to visualize alternative futures and the long-term likely consequences of one’s decisions along with being able to get others to be highly motivated to achieve a collective vision (e.g., the reported reality distortion field that Steve Jobs created in people around new products and projects at Apple)

• 5. The ability to balance and meet the needs of multiple stakeholders who often have competing agendas, but do not necessarily have to, when leaders foster the valuing of interdependence

• 6. The transformation of finite games (“I win and you lose”) into infinite games (where all parties are working toward the prolonging of the system of which they are members and changing the rules when necessary to enlarge the returns and consequences for all involved) (see Brand 1999; Carse 1986)

Without the development of truly wise leaders, or at a minimum leaders who are aspiring to be wise, and consciously working on being wise, the twenty-first century will be a much poorer place—economically, socially, ethically, culturally, and personally.