Wise Leadership in a Complex World

Aung San Suu Kyi’s words about the journey toward peace have some resonance with what we know and have tried to convey about the path to wise leadership. It is a lifelong, ever expanding, and unending journey. It requires much from us: discipline and humility, reflection and action, a commitment to continuing growth and change. For a smart leader busy dealing with a complex and changeable business environment, the question may be, “Why?” Leadership is a challenging endeavor in itself. Why must we also strive for wisdom?

We touched on this question in the Preface, but it bears revisiting. It’s true that the quest for wisdom in leadership yields many gifts on many levels, from personal to organizational. But on the most pragmatic level, wise leadership is the strongest position we know of from which to meet the demands and challenges posed by a rapidly changing globalized world. In particular, five contextual variables—diversity, interconnectivity, velocity, ambiguity, and scarcity—are increasingly shaping how people respond to problems and how organizations function. These variables aren’t new within organizations or social systems, but we see them becoming more intense and widespread in the twenty-first century, and we are not alone in this assessment. In a survey conducted by IBM in 2010 with over fifteen hundred chief executives worldwide, eight in ten CEOs anticipated greater complexity in the future, but fewer than half of them said they feel confident about coping with complexity and being able to innovate and drive higher revenues in these circumstances.³²

For smart leaders, complexity tends to trigger the fight-or-flee reflex: functional smart leaders hunker down, and business smart leaders tend to tackle complexity head-on, often reusing outdated formulas that served well in the past. But wise leaders are not overwhelmed by complexity: rather, they see the potential benefits in complexity and seek to turn it into an opportunity to bring value to their organization and the larger community. And since wise leaders are both grounded in a noble purpose and at ease accepting the idea of change as a constant, they are much more likely than smart leaders to turn the key drivers of complexity (diversity, interconnectivity, velocity, ambiguity, scarcity) to their organizations’ advantage.

While smart leaders might feel challenged by the growing diversity among employees and in the customer base, wise leaders have the capacity to welcome this diversity and turn it into a competitive advantage—for example, by leveraging the creativity of their diverse workforce to address the needs of their more heterogeneous customer base.

Smart leaders who are generally used to command-and-control management style can feel threatened by the world’s pervasive interconnectivity, which disrupts the top-down leadership model they prefer in favor of an open, bottom-up, participative approach.³³ Wise leaders can more readily see social media–enabled interconnectivity as an asset because it allows more stakeholders to interact and collaboratively solve problems in a way that is faster, better, and cheaper.

Change is now the only constant in business, which means that ambiguity and velocity are the rule. The velocity of change continues to accelerate, drastically shortening product life cycles and forcing firms to rapidly adapt or reinvent existing business models. When confronted with such high velocity, smart leaders tend to either refuse to adapt or to attempt tepid changes when bigger and bolder transformation is required. And many smart leaders, accustomed to basing decisions on past patterns, fail to leverage ambiguity, which, by its nature, provides conflicting signals and breaks down traditional patterns. Wise leaders, who are able to integrate logic, emotion, instinct, and intuition into their decision making, can more readily improvise innovative solutions that factor in the nuances of the rapidly changing context, or situation.³⁴

And finally, smart leaders attached to a more-is-better growth model (which produces more output by consuming more resources) are ill equipped for the resource scarcity ahead. Wise leaders, whose worldview does not depend on zero-sum or tit-for-tat thinking and action, are freer to devise sustainable business strategies that make more efficient use of limited resources and yet generate higher value to consumers and the society at large.³⁵

This is why, all other benefits of wisdom aside, we believe that only by tapping into their inner wisdom will leaders be able to cope with the escalating complexity in the global business environment.