Can organizations act wisely?

Your response to that question is a wonderful gauge of your cynicism. If you are scoring high on the cynicism-meter, well … it is hard to blame you. The world makes cynicism easy.

For example, I used to sit on the board of an agency that worked to prevent drug abuse in schools. We approached several agencies to obtain funding. A consistent argument they gave for refusing to finance us was our organization aimed to prevent drug abuse. If we did our job, nothing would happen because no one would abuse drugs. But if nothing happens, how can funders know we’re doing anything? They would rather donate their money to repairing the damage caused by drug abuse because the damage is visible. Repairing damage makes you a hero. Preventing damage is invisible, and so few agencies are keen to spend their resources on it.

So, yes, working with organizations can be frustrating.

It is easy to be cynical, but here’s the thing. We are, in fact, a wise society, and we have the capacity to grow ever wiser. Don’t believe me? In 1981, 44% of the world’s population lived in extreme poverty. By 2015, only 10% did. In 1950, the global average life expectancy was 48 years. By 2014, we extended that to 71 years.

These were not accidents but the result of an intentional, coordinated effort. We did not achieve these improvements through the actions of any one person but through the efforts of different organizations working together. Organizations can act wisely.

They can, however, also act stupidly. The question then becomes, can we create wise organizations on purpose?

In the next few sections, I’ll specify what wisdom is, discuss why it can be so bloody hard for organizations to act wisely, and then end with thoughts on developing organizational wisdom.

What is wisdom?

I’ve written about this before. In brief, every culture has a rich history of thinkers contemplating what it means to be wise. When you review this literature, three themes emerge across cultures and across time.

  • Values guide wise action.
  • Knowledge is required but insufficient for wise action.
  • Wisdom is action-oriented. It is not knowing the right thing but doing it.

Why do organizations have trouble acting wisely?

Values may guide wise actions, but organizations must contend with a vast array of different values held by various stakeholder groups. The marketing people want funding to improve customer experience (value=user orientation), but the finance people want to balance the budget by cutting costs (value=sustainability). How can values guide wise actions when each group in the organization wants to achieve a different value?

Managers also find themselves beholden to the “tyranny of small decisions.” Managers are under immense pressure to resolve immediate issues but are seldom accountable for long term outcomes. As you might imagine, this can result in actions that contain the small fires of today while adding fuel to bigger fires of tomorrow. My experience with agencies that preferred funding programs addressing the damage of drug abuse rather than preventing it was an example of this dynamic. 

There are, furthermore, a myriad of cognitive fallacies to which managers (and all humans) fall prey. Some common ones include fallacies of unrealistic optimism, egocentrism, omniscience, omnipotence, and invulnerability. In other words, we humans are flawed and limited little creatures. How could we hope that sticking a bunch of us together would result in wisdom?

I could go on, but you get the idea of why achieving wise organizational action is hard.

Given all that, can organizations act wisely?

Sweet lord, yes. All those challenges are not barriers to wisdom, but problems to which wisdom is the solution.

Yes, there are a multiplicity of values operating within an organization. This collection of values, however, are key to survival. Organizations, for example, need to care about customers AND sustainability. As I’ve discussed before, wisdom means having the patience and willingness to understand those different values, to see how they contribute solutions to various aspects of complex problems, and then to balance them to achieve a higher goal.

Yes, our knowledge is flawed and limited. As I’ve discussed before, wisdom is recognizing that there are different ways people come to know the world. When we have the patience to understand the insights each of these ways brings and then blend them together, we can create innovative solutions to sticky problems.

These are teachable skills. These are attitudes anyone can adopt. If you’re looking for an easy first step to start, click here to learn about the power of reflection journaling.

If I could ask you to put your cynicism aside for a moment, rejoice in what we have accomplished through our ever-growing wisdom. We have created institutions that have nearly eliminated illiteracy, institutions that have extended life expectancy by decades, institutions that have allowed families to stay in contact despite living thousands of kilometers apart, just to name a few. And we will do more. We are wise, and we grow ever wiser.


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