Evolving from Smart to Wise

Smartness is another word for intelligence, which means many things in both popular understanding and scholarly circles.⁴ Our use of it here is closest to a definition from Robert Sternberg, a renowned contemporary scholar in the area of human intelligence who described “successful intelligence” as “one’s ability to attain one’s goals in life, given one’s sociocultural context, by adapting to, shaping, and selecting environments, through a balance of analytical, creative, and practical skills.”⁵ This is aligned with our own definition of smart leadership as a capacity that goes beyond simply being a smart or intelligent person to being a person who applies his or her smartness through action for moving forward for primarily personal growth and success.

It’s this quality—intelligence applied through action in the service of personal growth and success—that we divide into two main styles: business smartness and functional smartness, or in our shorthand, the red zone and the blue zone. Each represents significantly different intelligences, energies, and capabilities. Each of us is born without filters, but with innate tendencies and external conditioning, we tend to put on the red or blue filters that gradually color our perspective, and we soon forget that we have those filters on. This skewed perspective influences where we focus our own developmental efforts, and typically we end up cultivating exclusively either a blue or a red perspective.

As we grow older, we tend to lean on our particular area of strength, honing our capabilities in that area. As we do so, we become attached to that kind of intelligence, and without much conscious thought, we can get stuck there. Our strength becomes a winning formula, and we grow dependent on it, which eventually makes us weak and vulnerable in other areas. The type of smartness—functional or business—that we gravitate toward shapes our worldview and defines our personality. We can develop such an attachment to our kind of smartness that we see only negative aspects of the other kind of smartness without recognizing—or being willing to accept—the limitations of our own kind of smartness. Yet our two definitions of smartness—functional and business—are actually complementary.

Functional smartness is grounded in issues that are concrete, tangible, and tactical, and when this becomes well developed, it leads to operational and execution smartness. Functional smartness also allows us to focus on developing strength in the domain that we are inherently good at—say, marketing or finance—without getting distracted by anything outside that domain. Functional smart leaders, at least those we have studied, are generally comfortable with details. They take on work with careful focus, and whatever they accept as work, they execute it effectively and deliver predictable, high-quality, and reliable results. Many of them are effective managers and maintain a healthy bottom line by pursuing operational efficiencies. Using a sports metaphor, functional smart leaders tend to play defense, protecting their turf against the competition. Not surprisingly, they are often risk averse, preferring to place safe bets when considering investing in new projects because their motivation stems from a basic need to be safe and secure. Being a functional smart leader offers many advantages and benefits because such a leader tends to be prudent and efficient. Over time, these leaders grow in their ability to apply their practical intelligence to bring success to themselves and their organization.

Business smart leaders, in contrast, are often driven by the desire to do bigger and better things and are not easily intimidated by risks. They tend to have a visionary perspective and are strategic in their approach as they focus on entrepreneurial growth opportunities more than bottom-line profitability.

Business smart leaders relish high-stakes games and sometimes have a winner-take-all mentality. They can be dynamic, proactive, and even aggressive in search of growth, as Bill Gates was during his tenure as Microsoft’s CEO. As a general rule, business smart leaders focus on creating new markets while at the same time seeking to dominate existing markets by grabbing market share from competitors.

Former GE CEO Jack Welch is a business smart leader who was famously nicknamed “Neutron Jack” during the 1980s for his extremely competitive mind-set.⁶ When this tendency is unchecked, leaders on the edge risk becoming obsessive, quick tempered, and dissatisfied with the status quo. Some of these competitive leaders can also become moody, intense, and restless in pursuit of goals and success. To a small group of smart leaders, values and ethics usually play a secondary role to winning. If they can keep their business smart temperament in check, however, these leaders can balance self-interest with the greater good and use their intensity and strong focus on growth to deliver sustainable value not only to their organization but also to society.

Regardless of the kind of smartness we tend to act and lead out of, when we take the time to reflect, we realize the limitations of business smartness and functional smartness. 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. Wise leadership is not about giving up our smartness, but transcending it and gaining a broader perspective on life. That perspective enables us to rein in our smartness and harness it to serve a larger purpose in an ethical and appropriate manner.

Wisdom is grounded in ethics, shared values, and serving a larger purpose. Thus, we define wise leadership as leveraging smartness for the greater good by balancing action with reflection and introspection, gateways to humility and ethical clarity. In contrast, smart leadership draws on all of our skills and strengths in the service of personal gain. Wisdom itself grounds us, helping us to shift from using our smartness for our own benefit—and often with a zero-sum mind-set—to using it for creating new value for a higher purpose.

The journey from smart to wise is about becoming able to see the strictly rational and logical way of focusing on what is tangible and personally beneficial as well as the authentic way of including intangibles, such as shared values and ethics, and the greater good. Attention to those intangibles allows us to avoid attachment to either kind of smartness. Ignoring them leaves us stuck with one kind of smartness or the other, unable to discover and claim wise leadership, which transcends and yet encompasses both kinds of smartness.⁷ Hence, the journey to wise leadership consists in gaining an appreciation for values and ethics, simultaneously transcending one’s smartness while also including it as a tool to serve a larger purpose.

The foundation for wise leadership is context sensitivity: discerning what kind of smartness is appropriate for a particular situation. Such context sensitivity is a key asset for leaders in a dynamically changing global business environment because it balances out conditioned responses and broadens a leader’s field of awareness, helping him or her gain a larger perspective. As leaders advance in their careers, they tend not to increase their context sensitivity and broaden their perspective, but to surround themselves with others who share their worldview. This solidifies their position and makes it even more difficult to step out of their zone. As a result, both business smart and functional smart leaders struggle to adapt their success formulas—or let go of old ones and adopt new ones—even when the external context changes. For example, functional smart leaders at the now defunct Borders had perfected a bricks-and-mortar book distribution model that was successful during the pre-Internet era, but they failed to adapt its business model for a digital economy dominated by online commerce platforms like Amazon.com.