Source: Harvard Business Review
Hirotaka Takeuchi and Ikujiro Nonaka, authors of the HBR article “The Wise Leader,” explain how the best executives strive for the common good.
The Idea in Brief
Business now demands a different kind of leader—one who will make decisions knowing that the outcomes must be good for society as well as the company. Leaders must keep a higher purpose in mind.
Although such leadership demands more knowledge than ever, executives should not depend on just explicit or tacit knowledge. They also need a third, often forgotten kind of knowledge, called phronesis, or practical wisdom.
Phronesis, acquired from experience, enables people to make prudent judgments in a timely fashion and take actions guided by values and morals. When leaders distribute such knowledge within their organizations, they can reach enlightened decisions.
Japan has a number of phronetic leaders, who possess six abilities: They can assess what is good; quickly grasp the essence of situations; create contexts for learning; communicate effectively; exercise political power to bring people together; and encourage the development of practical wisdom in others through apprenticeship and mentoring.