Emeritus Professor of Strategic Management Bruce Lloyd
On Wisdom in Business
Bruce Lloyd is an Emeritus Professor of Strategic Management at London South Bank University. He spent over 20 years in industry and finance before joining the academic world 20 years ago. Whilst his background is in Chemical engineering, he has more recently worked extensively in Knowledge management and Business Education. He was the UK co-ordinator for The Millennium Project from 1999-2005 and has published over 200 articles on a wide-range of strategy and futures-related issues, including leadership, organisational performance, knowledge management and wisdom. He is also on the Advisory Board of the online wisdom resource The Wisdom Page.
How did you become interested in wisdom?
My background was science and engineering so I had heard of the pyramid – data, information, knowledge and wisdom. I was very puzzled why, in this area of knowledge management, almost nobody talked about wisdom. I thought that was a bit strange since it was the ultimate pinnacle of the triangle. Then in the late 1990s, we had the run-up to the millennium and in that period there was an enormous emphasis on looking at the future. I did a project for The World Futures Society called ‘Messages for the New Millennium’ and the idea was to distil out a thousand wisdom sayings that were important to try to pass on to future generations. It forced me to think more about what wisdom was all about, which I found fascinating because it’s a very philosophical, meaningful and practical area to reflect on.
I then put together a paper called ‘Power, Responsibility and Wisdom’ in which we tried to rethink the relationships between data-information-knowledge and wisdom. Actually there is no mechanistic movement from one to the other as if it was a scientific progression. You don’t just wind a handle and distil one in to the other. There are some quantum jumps. Information is what gives context to data. Doing something with information is knowledge. Doing something good with the information, something positive, is the wise use of that information. Of itself information is values-free. It is only when you use it that your values determine whether you are going to use if for good or evil. Wisdom is a way of repackaging values statements about relationships between people, relationships within groups, and societies and the individual’s relationships with the universe. It’s not about just technical information. If we look at many areas of leadership today, wisdom is very relevant because the key element of leadership is values, not power. Rather, leadership is about how you use power and in whose interest. Statements of wisdom essentially have values in them. They have values that are related to what works in terms of the long-term relationship of the individual and the wider world.
Wisdom is a way of repackaging values statements about relationships between people, relationships within groups and societies and the individual’s relationships with the universe.
How do you define wisdom?
Wisdom is reliable, useful, information about what makes relationships and society work, in everyone’s interest, in the long term.
Do you have a favourite statement regarding the nature of wisdom?
One that I’ve put in some of my talks is ‘In the end, the most important factor in improving the quality of your decision-making is the quality of your conversations’. Strategy textbooks give the impression that organisations and strategy are a mechanistic process, but they’re not. They’re a very fuzzy, but not necessarily a very complicated, human process that, underneath it all, is driven by values, one way or another – to work or to self-destruct. A key issue, which doesn’t get researched, is that both personal violence and political violence is a reflection of the breakdown of the ability to hold these positive conversations. But what makes a conversation work? Mutual respect, listening and an ability to take into account the interests of the other person. Strangely enough, we don’t take enough notice early on with the development of children to help them develop the ability to have constructive conversations. The implication is that they know it all, or they don’t need to develop it, but in fact for the vast majority of people, their skills in this area are horrifying. Also, if you neglect the importance of values, conversational skills can be used in very strange ways, resulting in arrogance and other things that are potentially very damaging.
So I always started my strategy courses by getting the students to pair off and have an argument, and then afterwards to have a discussion about what had gone on. We need to encourage people to say: ‘These things we agree on. These things we disagree on. Why do we disagree on these? What would happen if you were on the other side?’ In South Africa at the end of Apartheid and in Northern Ireland at the end of The Troubles, there was an enormous emphasis on trying to get the parties to have constructive conversations. How else are these problems going to be resolved? If you said how do you apply wisdom to the debate in America about abortion, then the first thing that you have to do is to encourage the people that have different views on this to improve the quality of their conversations about what it is they’re agreeing about, and what it is they’re disagreeing about and why. Now, if you run into fundamentalism, you’ve got a bit of a problem. One essential element of this approach is that we’re assuming that we don’t have absolute answers. If you then come across somebody who says ‘I don’t care what you say. It’s in the Bible or the Koran’; how do you deal with it? All I can say is: With difficulty. You need a lot of energy, a lot of patience, a lot of wise application to deal with that, but it’s not impossible. If people have changed the mind of Dr Ian Paisley, anything must be possible. People can change, but you have to work from where they’re coming from. Otherwise you just get in a shouting match, or worse still a shooting match.
In the end, the most important factor in improving the quality of your decision-making is the quality of your conversations.
Can individuals/groups become wiser? If so, how?
I think this is very related to values. Can we become better people? Probably we all think we can. In fact, people who think that they’re perfect are a problem! So we can all become wiser. We can all develop our values and that starts very early on. There is no evidence that I’ve come across that it’s in the genes. There’s a lot of evidence to suggest that it can be influenced by your early life and that people can change later on in life. You can become a better person and you can become a worse person. Largely, I don’t think many people are living their lives in neutral. I think it’s very interesting that peer-group support systems can have a very considerable influence. If you want to be a better person, get together with other people that are trying to do the same thing. If you want to be a worse person, join a gang.
I’ve just reviewed a book on emotional resilience and emotional intelligence. Implicitly, both of those areas are very closely linked, in my view, to values but the authors don’t discuss that area explicitly. And because they don’t discuss it explicitly, they don’t really start discussing ‘what’s the difference between a wise person and an emotionally intelligent person?’ The difference, as I see it, is that there is a significant risk that the agenda of the emotional intelligence industry becomes one designed primarily to help you become emotionally intelligent so that you can get your way more often. That’s not helping you to become wiser! It’s not really what a values driven agenda would be about.
Can wisdom be taught/learnt or can it only be acquired through direct experience?
There’s not a lot of evidence, I think, that you can teach wisdom or values, but it must be that they’re learnt. So you can manage the learning environment. You can’t give somebody a lecture, and transfer information about the values that they ought to have and then expect them to change just because they have heard the information, but in the way you give the lecture, you can demonstrate values that they will take on board. So the process and the content go together.
There are a lot of people that say that children learn about emotions from their parents and they learn wisdom from their grandparents. The pressure on parents, personally in their own lives and the bringing up of children, is horrendous. Their grandparents have passed through that and have a much more philosophical reflection on life and generally have more time to think about these issues. This is especially tricky for parents if they haven’t got the conversational skills we mentioned earlier. They’re usually under enormous pressure and often just in survival mode.
One of the other relevant factors is the decline of the liberal arts and the classics. I did Science but the classics and literature are actually a very embedded source of wisdom about what works in relationships, societies that worked and others that didn’t. The current thinking seems to be that they should be put in a separate box somewhere, rather like Philosophy. They say that Philosophy departments are shutting all over the country because they’re not in demand. Actually Philosophy is very relevant, partly because it is essentially the search for wisdom. However, Philosophers don’t talk, or write about it, in that way and, by and large, they make the issues unnecessarily complicated and, hence they are not perceived to be relevant.
Are there any negative aspects of becoming wiser?
In general the answer would be no. The only reservation I might have is whether wise people are more tolerant of the things that they shouldn’t be tolerant of. But the argument should be that, if they really are wise, they are aware of these issues, and that should mean they’re not pushed beyond limits of what would be wise in the specific circumstances.
Do you think wisdom can be measured?
You could in my view find a way to assess the validity of statements of wisdom. For example, you could give people ten statements of wisdom and ask them what order they would put them in. You could investigate if there are cultural differences. Actually I don’t believe there are significant global differences in what various societies perceive to be wise behaviour, because that behaviour is what helps individuals work most effectively within their respective society.
You could also measure the extent to which people’s behaviour is wise. You could specify ‘what are the characteristics of wise behaviour in this set of circumstances, and how far does the behaviour of these individuals match this definition, or collective definitions, of wise behaviour?’ There are no perfect answers, just useful, workable hypotheses about what works. It is all a bit fuzzy, but it can be done, and it doesn’t get the attention it deserves.
After being neglected for so long by serious academics, why do you think that wisdom has recently started to receive more attention?
Perhaps some people felt, as I did, that the mechanistic approach to leadership and various related areas was lacking. Other people were thinking more about the future of humanity. One point that is relevant here is that we get obsessed with GDP as a measure of societal success. However, that is a quantity measure with very dubious components. It’s not a quality measure. Just like we’ve got obsessed with leadership being about power as a quantity measure – people at the top of organisations have big decisions to make, therefore they must be leaders. No! People who are leaders are people who take good decisions, not just large decisions. What we need to be concerned with in society is measuring the quality of things. We’re now trying to work out new quality of life indices, because the old model of economic growth is actually not sustainable; it’s not very meaningful and it’s not very helpful. In fact, it’s potentially disastrous for people working in our current system since it causes lots of stress and other problems, and generally people find it very unsatisfying. It’s a race against time over whether we really take these alternative ideas on board before the old model collapses. For example, what is it that makes people happiest? Helping other people, having a good conversation with other people, relationships. An obsession with material possessions is actually quite low down on any list.
We’re now trying to work out new quality of life indices, because the old model of economic growth is actually not sustainable.
In your experience, are business leaders open to the idea of conducting business ‘wisely’?
Often in companies, words are not consistent with behaviour. This is something we suffer from these days called ‘Organisational hypocrisy.’ To some extent companies have organised their bureaucracy so that they find a way of blaming other people for things that go wrong. But, in the end, people at the top should take responsibility for the culture. To some extent they have done this traditionally in Japan where, in the old days if a company had not done what is should have done, the chief executive would commit suicide at the annual general meeting. I am not suggesting we go to that extreme, but a few more resignations over the banking crisis would have helped. Those are the things that are also associated with, if you like, the traditional cult of leadership. If there was more a sense of collective responsibility, then it’s not so focused on one individual. Everybody from the top down should take a major salary cut if they’ve messed up.
The people at the top often don’t walk the talk of their values, with their escalating salaries, bonuses and payoffs. You can see how that creates all sorts of problems, sooner or later. The argument that I would put forward is that if you want organisations to be sustainable over the long term, the wise package that we’re talking about is much more likely to achieve long term sustainable results than the ego-driven self-interested, highly competitive approaches. An example of this is the bonus culture in The City in the mid-2000s. It was one of the major factors leading to the financial crisis, because it encouraged people to pursue their own agenda by pushing the boundaries of what was legitimate. The people at the top either knew it was going on and what was going to happen so they should be in trouble; or they didn’t know what was going to happen, but they should have known. Either way most of them should have been sacked. How do you manage that sort of competitive system so that it doesn’t evolve like that? It’s not a matter of moving in the direction of some other extreme. It’s a matter of really understanding these sorts of issues and how they can distort behaviour in unsustainable and unhelpful ways. The agenda of competitiveness is important, but we can provide greater guidance over in whose interest employees are taking decisions in the name of being competitive.
If you want organisations to be sustainable over the long term, the wise package that we’re talking about is much more likely to achieve long term sustainable results than the ego-driven self-interested, highly competitive approaches.
You have mentioned before in your work that collective ownership structures, as used by companies such as John Lewis, can end up stifling innovation. How does that work?
There is a paradox about innovation and the competitive system. There is little doubt in my mind that the competitive system encourages more innovation than the cooperative system. A cooperative system tends to have a lot of vested interests that tend to protect the status quo. If you look at many of the successful innovators, they’re not driven by just making money. In fact if you look at the entrepreneurs that are just driven by making money, they end up by cutting corners and many of them end up becoming crooks, because that’s the nature of their innovation – pushing the boundaries in those areas that are just concerned with making more and more money. That’s exactly what happens in the financial sector, since where do you find meaning and values in a system that is essentially just playing games with money? There was meaning in the past, when the bank manager was there to help you, but that concept of professionalism has been undermined. The underlying concept of professionalism is that you put the customers’ interests first. The professions don’t really want to know about this now because they have become so commercially focused.
Can businesses, governed primarily by economic interests, ever really be wise?
In the past, many businesses were not driven primarily by profit. This generally was for two reasons. One was religion. A lot of the successful companies that were formed decades ago were Quaker companies. They were pursuing the idea of inclusive stakeholders, long before anybody else was doing it. That was very critical for their long-term success. The other factor was that the concept of professionalism came from people who weren’t primarily motivated by just making more money (which, in essence, is what GDP is measuring). In other words, they perceived they had financial security. Unfortunately, the core message of our society today, in order to generate consumerism, appears to be to generate as much insecurity as possible in order to pressurise us to consume more and more. However, these early business leaders were in a culture and a peer group that accepted that their material level was not something that they needed to compete on. What enlightened companies do is take the stance: ‘We want to deliver good products and services to customers, and be able to manage our financial affairs properly, and in the long run, this is what’s going to make us the most money. But if we set out just to maximise the money we make, especially over the short term, we shouldn’t be surprised if things end up distorted in an ultimately self-defeating way.’
Another consideration is that, in the past, companies often operated in small communities that relied on repeat business. If you started screwing a customer, everybody soon knew about it and you were soon out of business. The concept of community, honesty and wise behaviour in business is not new, because people in the past knew what was in their long-term interest. They’re now beginning to bring the idea of the importance of ‘business relationships’ back, at least that is what many are trying to do. Of course, in this process, it is important that these relationships don’t become too close that they start encouraging abuses of power, even actually becoming corrupt.
What enlightened companies do is take the stance: ‘We want to deliver good products and services to customers, and be able to manage our financial affairs properly, and in the long run, this is what’s going to make us the most money. But if we set out just to maximise the money we make, especially over the short term, we shouldn’t be surprised if things end up distorted in an ultimately self-defeating way.’
Which single practical change do you think would lead to the greatest increase in the levels of wisdom in the business community and more generally in society?
There’s no magic bullet. In strategy I would always say, first try to define the problem, and then recognise that there are a hundred and one different things that will help move us in the direction of solving the problem. But the media likes to say ‘Wind farms aren’t going to solve our energy problem.’ We shouldn’t talk like that! The key question is ‘Do they help us move in the right direction, in a cost-effective way?’ Not ‘Will they solve the problem?’ So the language that people use, especially in the media, is often incredibly polluting in a divisive way over the way we think about problems and consider their solutions.
Also, taking a broad society-level view, in a competitive environment, one of the things that happens is not everybody can be at the top. That comes back to a very important element of the agenda that casts a shadow over our society: ‘What do we mean by success?’ If by success we mean that you’ve got to the top of a major corporation, or you’ve become Prime Minister, then only a few people can succeed. If success is to be a wiser person, then there is no limit to how many people can succeed. Everybody can be wiser. Actually if everybody is wanting to be wise, people will help each other to become wise. Conversely, if you’re trying to be Prime Minister, and everybody’s trying to be Prime Minister, the one thing you will do is be unhelpful to everybody else who is trying to be Prime Minister. Essentially this is an unsustainable model. A better model for society is a society where success is something that everybody can achieve and where it is in everyone’s interest to help others in that process. These ideas were well developed years ago in a perceptive book The Social Limits to Growth by the late Fred Hirsh.
More specifically, if I wanted to say what is the one thing that would help everybody be wiser in the long term, it is simply to approve our ability to have positive conversations. That gives us the best chance of making a better – that is wiser – world for everybody.
Finally, it would be greatly beneficial all round if we could just spend more time exploring the meaning and relevance of wisdom in an attempt to help us all become just a little wiser.
If I wanted to say the one thing that would help everybody be wiser in the long term, it is simply to approve our ability to have positive conversations.
Why not have a look at the following papers and articles to read more about Bruce Lloyd’s research?
Lloyd, Bruce (2004) “The Wisdom of the World: 1000 Messages for the New Millennium” World Future Society – An extensive catalogue of essential wisdom sayings from history compiled by Bruce Lloyd for the World Future Society’s ‘Wisdom of the World’ project.
Lloyd, Bruce (2009) “Power, Responsibility & Wisdom: Exploring the Issues at the Core of Ethical Decision-Making and Leadership,” The Journal of Values-Based Leadership: Vol. 2: Iss. 2, Article 6.
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