Wise Decision Making:
Unpacking Hidden Qualities and Practices of Leadership
Revised and updated excerpt from “Leadership Landscapes,” by NOW Partners’ Managing Partner Tom Cummings and Jim Keen
Leadership experts Tom Cummings and Jim Keen analyze the key elements of wise decision making — a critical skill for leaders — and consider how these skills can be practically developed.
We begin with the premise that a key aspect of civic and business leadership is the question of wisdom. Certainly no one should tackle this question without acknowledging that wisdom, like beauty, lies in the eye of the beholder. All the more so in a world in which diversity and complexity have become the norm and in which the ambiguity of uncertain futures has become visible in ways that are nearly inescapable.
Moreover, we see practical wisdom as measured between the dangers of paralysis, inaction, and wasted opportunity on one side, and, on the other side, the tragic over-reaching that the Greeks called “hubris.” In this light, we are seeking to take a balanced and considered approach to this topic. We intend what follows to be a contribution to a broader conversation on this topic as opposed to some kind of comprehensive, defining conclusion.
Our concern is with “wisdom in action” in this diverse, complex and ambiguous world as it is applied in leading on the landscapes of business, government, non-governmental organizations, and popular movements. This draws our focus to questions of choices and decisions rather than, say, insightful commentary or analysis or any other fruits of the human mind that one might refer to as “wise”.
Our attention here focuses on practices underlying leadership which can help produce wise decisions and support wise actions in a world in which diversity and complexity have become commonplace.
Wisdom looms as a question because it’s hard to say what is wise without the advantage of retrospect. Perhaps that is why a standard approach to practical wisdom rehearses the biographies of “wise” leaders recounting the wisdom they exhibited in their personal “moments of truth” facing up to the daunting challenges and dilemmas their leadership posed for them.
Look at leaders in the context of “moments of truth” for which they have become well known. For example, Paul Polman, then CEO of Unilever stood up to activist shareholders engineering a hostile takeover by Kraft Foods. To shareholders, a merger would provide excellent short term value creation. In the longer term, Unilever’s stakeholder orientation as an independent company that defied shareholders delivered extraordinary returns when compared to its peers.
An equally compelling example is Emmanuel Faber, until very recently the Chair and CEO of Danone, who was one of the first leaders of a large multinational to commit to becoming a B Corp by 2025 as a part of his lifelong commitment to social and climate transition. Faber’s remarkable record of earnings per share growth since 2014 and CO2 reduction incentives were pathfinding moves. Yet the Covid period slowed the growth of the company and threatened Danone’s regenerative business plans. Faber’s structural moves to implement an Entreprise à Mission legal status in France, combined with B Corp certification, assures that the social and environmental evolution of the company is likely to continue for future generations of leaders.
While there is much more to these two nuanced cases, to understand leadership in these scenarios we need to dig deeper and go beyond the personal qualities of the leaders. Let’s begin by considering that the qualities like “courage” or “charisma” or “vision” that a leader may exhibit or even embody, started with practices and experiences that began long before their “moments of truth”.
Our attention focuses on practices underlying leadership which can help produce wise decisions and support wise actions in a world in which diversity and complexity have become commonplace.
If only we could advise leaders in ways that would produce consistently wise decisions as proven by the outcomes to which their choices would lead, we would indeed qualify as sages! No one can promise that. Even when making their most sound and promising choices, all leaders are subject to Hamlet’s “slings and arrows of outrageous fortune.”
Given the contingent nature of the world, perhaps practical wisdom needs to start with an understanding that, in human affairs, things are likely to go wrong. For while some may remember Winston Churchill’s courageous choices as Prime Minister, we could hardly have imagined the fate of this foolhardy journalist who was nearly killed then imprisoned in the Boer Wars because he wanted to be the first one to the frontlines.
The Temporal Forms of Wise Decision Making
In practice, wisdom comes in several different temporal forms of deciding, two of which are:
- the spur of the moment, intuitive, or reactive choice, made in light recognizing recurrent patterns that may not need to be rethought, or made reactively in the face of a closing window of opportunity to act.
- the carefully considered choice, made by following principles of systematic inquiry, consultation, listening, weighing of alternative scenarios of unfolding future, and rehearsing possible outcomes, both positive and negative.
Intuitive or Reactive Choice
Intuitive choices are economical in terms of time and effort. Leaders have finite capacity to consider and must act decisively within time available. Indeed many of the best choices are made in the flow of the moment. Leaders often talk about “going with their gut.”
Though such decisions may appear spontaneous, they often call on previous experience with recurrent, familiar factors, and issues. That is one good reason to value experience — so long as the overall situation is relatively predictable. Sometimes apparently intuitive decisions come only after relevant work has prepared the ground and the leader has actually resisted making a choice until the optimal moment for making the decision has brought a decisive piece of the puzzle into view.
We call this active engagement with an unresolved choice until the moment is ripe, “temporizing.” Being able to control the timing of one’s choice is one of the marks of successful leadership. On other occasions something in the intra-psychic process of the chooser seems to catalyze a “shift” to clarity that happens in the moment, even though the shift is the result of a longer process of inquiry and pondering.
If only we could advise leaders in ways that would produce consistently wise decisions as proven by the outcomes to which their choices would lead, we would indeed qualify as sages.
Sometimes decisions are so obvious or of such little consequence that belaboring them would simply waste time. Assuming that time is a precious resource for most leaders, a quick decision will have the virtue of thinking little of it. It often depends on the stakes implicit in choice. If there were more risk or complexity in the decision than at first glance, the quick fix may prove unacceptably costly. Generally, spur of the moment decisions, while potentially useful, are best exercised in situations that will cause little, or easily reversible, damage if they turn out to be wrong. If it is not clear that this is the case and time is available for a more considered approach, more consideration may well be the pathway to a wiser choice.
There is also a case to be made for reactive decisions. One of the common practice fields for quick choice is driving at significant speed on a busy highway. Driving instructors often tell us to aim high, taking in a wide view of the road ahead of us. They tell us as well to know the parameters for controlling our vehicles so we know, for example, how long it will take us to stop. They suggest that we assume that other drivers may make mistakes to which we might have to react. The best advice seems to boil down to exercising caution while being prepared to react.
Those who do find themselves in an emergency situation may go through a sequence like the following:
- the point of surprise (a car in front of veers into their lane from the side,)
- the point of correction (they see the car and have enough time to avoid hitting it by slowing or moving out of the way,)
- the point of no return (they see the car but have too little time to correct and the car hits them, or they do correct but their corrective veering causes them to hit another car, or their sudden breaking causes another car to rear-end them.)
Ending at the second point represents a successful reactive decision in the face of emergency. The third point fails to avoid the accident. Either there is nothing that could be done because the point of surprise is beyond the point of correction to begin with, or if it is not, the reaction was too slow or a faulty reactive decision has caused a different accident to occur. These principles were enshrined by U.S. Air Force Colonel and strategist, John Boyd, when he coined the term “situational awareness” in his famous “OODA Loop: Observe-Orient-Decide-Act.”
Leaders have finite capacity to consider and must act decisively within time available.
Because reactive choices are, by definition, barely analytical, in the sense of not being subject to thorough consideration, they are particularly vulnerable to intervening variables that lead to unintended, unforeseen consequences. While reactive decisions have their place among wise choices, that place is located narrowly in the time between the point of surprise and the point of no return, that is to say, it is best exercised on those occasions when failure to react will lead directly to a point of no return.
There is a well-developed literature on crisis management that addresses decision procedures in cases where an extended interval of time exists between a point of surprise and a point of no return. A classic in this field was Graham Allison’s book Essence of Decision, which examined the thirteen-day interval between President John F. Kennedy’s point of surprise, on being informed of the Soviet Union’s surreptitious program of installing Intercontinental Ballistic Missiles (ICBMs) which were tipped with nuclear warheads in Cuba 90 miles from the shores of the United States and the resolution, at the brink of no return, of what became known as the Cuban Missile Crisis.
What is sobering in this narrative, as well as in the documentary evidence that came to light in the aftermath of the end of the Soviet Union, is how close the world came to nuclear Armageddon as it played out. What is inspiring are the basic lessons in managing a crisis of world threatening proportions under the pressure of a clear and present point of no return.
Considered Choice
The second temporal form of decision making has a better chance of increasing the wisdom of choices by carefully anticipating and considering decision points. Some of these methods can be deduced from situations such as the Cuban Missile Crisis, and are confirmed in our own experience counseling leaders.
1. Encourage dialogue and vigorous debate among advisers with differing backgrounds and points of view
Kennedy had stocked his inner circle with characters of strong mind and will who served his ends by their willingness both to provide their best counsel and to disagree, sometimes sharply, with each other’s assessments of what should be done regarding key issues, such as whether or not to launch an attack on the newly discovered silos for Soviet ICBMs or even an invasion of Cuba, following upon such an attack.
2. Listen carefully
Kennedy made it clear that his choices would be taken in light of the on-going discussion that he and, in is his absence, others in the group hosted. In the end, a suggestion made by one of the circle to ignore a later communication from the Soviet premier and respond favorably to an earlier letter that offered more promising terms, set the stage for de-escalation from the brink.
Kennedy’s willingness to listen and consider even surprising unconventional possibilities that reframed the sequence of the unfolding situation in the midst of the crisis is a distinguishing aspect of leadership that, in the end, appears to have been wise.
3. ‘Temporize.’ That is, forbear the pressure to act rashly while searching actively for a way to open a path that might lead to a resolution that would keep the situation manageable
At the core of Kennedy’s “moment of truth” was his balancing of two commitments: first, to fulfill his political responsibility — to obtain a politically viable outcome; the second, to avoid triggering an escalation of the situation to nuclear warfare, a scenario he knew would be beyond his control and catastrophic in its consequences.
In order to fulfill both commitments he bought time to search for a means to avoid nuclear war while also demonstrating serious and resolute engagement through bold, aggressive actions such as his quarantine (the euphemism that his advisors adopted to make an offensive blockade of Cuba seem defensive) of shipping to Cuba until the presence of Soviet missiles with nuclear warheads 90 miles of the shore of the United States could be resolved.
In the end, his ability to work within the tension of these competing commitments — not sacrificing one on the alter of the other, distinguished his leadership with wisdom.
In order to fulfill both commitments he bought time to search for a means to avoid nuclear war while also demonstrating serious and resolute engagement through bold, aggressive actions such as his ‘quarantine’ (the euphemism that his advisors adopted to make an offensive blockade of Cuba seem defensive) of shipping to Cuba until the presence of Soviet missiles with nuclear warheads 90 miles of the shore of the United States could be resolved.
Today we may live in a more unforgiving world in which leaders live between the unrelenting news cycles and tweets, fueled by algorithms that split our opinions and amplify our differences. Yet a very few leaders choose not to be driven by the polls and populism, able to seek their own counsel, guided by their moral compass.
While the jury is out, we will conclude with the example of Angela Merkel the Chancellor of Germany who is preparing to hand over the reins of power. Who would have guessed that a minister’s daughter and natural scientist from former East Germany would have shaped the Europe of today more than perhaps anyone else. Her signature of leadership of practical wisdom is clearly expressed by some of the principles voiced by Herfried Münkler, a political scientist at Humboldt University for a recent New York Times article (by Kathleen Benhold on January 16, 2021):
“You can definitely say that Ms. Merkel, who stands for a certain type of leadership — listening deeply, having a lot of patience, moderating, someone who has an incredible talent for accommodation — that this person in this position is not replaceable…In that sense, an era is ending.”
Over Merkel’s tenure she was also seen as a skilled, and at times, ruthless tactician, who foresaw the need to take clearly unpopular decisions, three that led to plunges in her polling numbers that later returned to high watermarks:
- the decision to stop the use of nuclear power following the Japanese Fukushima disaster and turn the country toward renewable energy;
- the decision to favor German and European interests during the Greek debt crisis, and
- the steps that invited more than a million migrants to emigrate to Germany when other states were building fences and mobilizing anti-immigrant hate campaigns.
In the end, her ability to work within the tensions of these competing commitments — not sacrificing one on the altar of the other, distinguished her leadership with wisdom.
Perhaps Reinhold Niebuhr’s oft-quoted reflection is a worthy end: “God grant me the serenity to accept the things I can not change, the courage to change the things I can, and the wisdom to know the difference.” And we would add:
Begin early the long practice of serenity, foster an ability to distinguish between what can and cannot be changed, and see your life as thousands of small experiments and learning moments that put you on the edge of your experience. For these are the long tail of a leader’s lifelong practice of wisdom to deliver wisdom in practice.
NOW Partners’ Managing Partner Tom Cummings is an Entrepreneurial Founder, Executive Board Member, and Senior Management Adviser to senior leaders in more than 30 countries over 30 years.
Selection is a revised and updated excerpt from “Leadership Landscapes.”
