How can I improve myself as a leader with Practical Wisdom?

Ikujiro Nonaka, Professor Emeritus at Hitotsubashi University in Toyko and Hirotaka Takeuchi from the Harvard Business School, wrote an article in the Harvard Business Review exploring the topic of Leadership Wisdom, which enables people to make prudent judgements in a timely fashion and to take actions guided by values and morals.

In an era when discontinuity is the only constant, the ability to lead wisely has nearly vanished. Dependence only on explicit knowledge prevents leaders from coping with change. The scientific, deductive, theory first approach assumes a world independent of context and seeks answers that are universal and predictive. However, all social phenomena - including business - are context dependent, and analysing them is meaningless unless you consider people's goals, values and interests along with the power relationships. Yet executives fail to do just that. Our studies show that leaders must also draw on an often forgotten kind of knowledge, called Phronesis, or Practical Wisdom - tacit knowledge that enables people to make prudent judgements and take actions based on the actual situation, guided by morals and values. When leaders cultivate such knowledge throughout the organisation, they will be able not only to create fresh knowledge but also make enlightened decisions.

Nonaka and Takeuchi draw historical comparisons between this form of 'Practical Wisdom', the Japanese concept of toku (a virtue that leads a person to pursue the common good and excellence as a way of life) and the Indian concept of yukta (which connotes 'just right' or 'appropriate'). They also make the commercial case by contrasting the 'crisis of confidence' which has engulfed Wall Street (which does not embrace these principles) with the respect afforded to many / most Japanese organisations (who do), and by referencing Gary Hamel's thinking in his 2009 HBR article 'Moon shots for Management', which suggests that "in contrast to the old notion of capitalism, which pitted business and society against each other, the best Japanese companies can become the exemplars of a new, communitarian approach to capitalism."

A course entitled Leading at the Speed of Trust, which mirrors some of this thinking, describes '5 waves of Trust', culminating in in Societal Trust, which identifies/distinguishes between the 20th vs 21st Century realities of:

• Business being responsible to shareholders vs Business being responsible to shareholders and the community at large
• Unconscious consumers vs Socially conscious consumers
• Profit as the measure of success vs Profit and contribution as the measure of success.

It then explores the Trust 'Taxes' and 'Dividends' that apply to organisations as a result. Moving from the 'macro' to the 'micro', Nonaka and Takeuchi talk about Executive sessions to build character and integrity at the individual level and this reflects another of the course's 'waves of trust' i.e. Self Trust, where the balance between Character and Competence is explored and the elements of Intent and Integrity as the building blocks of Character are further considered.