Ikujiro Nonaka

Hirotaka Takeuchi

In an era when discontinuity is the only constant, the ability to lead wisely has nearly vanished. All the knowledge in the world did not prevent the collapse of the global financial system three years ago or stop institutions like Lehman Brothers and Washington Mutual from failing.

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Reprint: R1105B
In an era of increasing discontinuity, wise leadership has nearly vanished. Many leaders find it difficult to reinvent their corporations rapidly enough to cope with new technologies, demographic shifts, and consumption trends. They can&#8217;t develop truly global organizations that operate effortlessly across borders. And they find it tough to ensure that their people adhere to values and ethics. The authors assert that leaders must acquire practical wisdom, or what Aristotle called phronesis: experiential knowledge that enables people to make ethically sound judgments.
Wise leaders demonstrate six abilities: (1) They make decisions on the basis of what is good for the organization and for society. (2) They quickly grasp the essence of a situation and fathom the nature and meaning of people, things, and events. (3) They provide contexts in which executives and employees can interact to create new meaning. (4) They employ metaphors and stories to convert their experience into tacit knowledge that others can use. (5) They exert political power to bring people together and spur them to act. (6) They use apprenticeship and mentoring to cultivate practical wisdom in others.

The Big Idea: The Wise Leader

Reprint: R1105B In an era of increasing discontinuity, wise leadership has nearly vanished. Many leaders find it difficult to reinvent their corporations rapidly enough to cope with new technologies, demographic shifts, and consumption trends. They can’t develop truly global organizations that operate effortlessly across borders. And they find it tough to ensure that their people adhere to values and ethics. The authors assert that leaders must acquire practical wisdom, or what Aristotle called phronesis: experiential knowledge that enables people to make ethically sound judgments. Wise leaders demonstrate six abilities: (1) They make decisions on the basis of what is good for the organization and for society. (2) They quickly grasp the essence of a situation and fathom the nature and meaning of people, things, and events. (3) They provide contexts in which executives and employees can interact to create new meaning. (4) They employ metaphors and stories to convert their experience into tacit knowledge that others can use. (5) They exert political power to bring people together and spur them to act. (6) They use apprenticeship and mentoring to cultivate practical wisdom in others.

The Big Idea: The Wise Leader

Summary.

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