PRACTICAL WISDOM: THE ESSENTIAL MANAGEMENT VIRTUE

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1 PRACTICAL WISDOM: THE ESSENTIAL MANAGEMENT VIRTUE Robert G Kennedy, PhD University of St Thomas (MN) ABSTRACT: Practical wisdom is a moral virtue which consists in a developed capacity both to recognize a possible state of affairs that would be good to realize and to devise and implement a sound strategy for making that possibility real. It is one of the four cardinal, or master, virtues recognized in classical moral philosophy. While its proper exercise depends upon certain kinds of abstract knowledge and certain skills, it nevertheless is essentially an ability to make sound judgments about actions to be done. Practical wisdom enables agents consistently to act in order to secure good and worthwhile objectives for themselves and others. In the contemporary world, which is a society of organizations, a species of practical wisdom as a virtue of managers is critical for the ethical and successful functioning of businesses and other associations. KEY WORDS: Practical wisdom, Prudence, Virtue, Ethical decision making Introduction At the foundation of classical moral philosophy are two convictions taken as self-evident. The first is that, as human persons, we have the capacity to choose our actions freely. Not everything we do may be freely chosen and in many cases our freedom may be severely constrained by circumstances, by our ignorance or by our fears. Furthermore, this capacity to choose our actions implies that we may choose well or choose badly. Consequently, we might call this the Burden of Freedom, for the possibility that we might choose badly, with damaging consequences for ourselves and others, imposes a burden on us to use our freedom wisely. This leads us to the second conviction, which is that our capacity to exercise this freedom well can be developed, perhaps even perfected. In other words, we can learn not only to avoid mistakes but also to improve our ability to choose well and to act in ways that genuinely benefit ourselves and those affected by our actions. Philosophers have traditionally spoken of these developed moral capacities as character traits or habits. More commonly, though, the character traits that constitute these developed capacities to use our freedom well are simply called virtues. (Indeed, the Greek word for virtue also means excellence. ) The most important of the virtues, by which human persons do well what they choose to do, is practical wisdom, or prudence (to give it its classical name.) In classical thinking, persons possessed of the virtue of practical wisdom are consistently able to recognize, in the concrete, good ends that are worth pursuing and possible to achieve. They are also adept at devising and employing sound means for realizing the good ends they first see as possibilities. 1

2 Virtue theorists have long recognized that practical wisdom may be both general and specific in character. Persons are generally wise when they can recognize the concrete components of a good human life and employ sound means to assemble these components for themselves and for others. But success in many areas of life requires not just a general ability to recognize the good but a refined capacity to pursue the good in a specific area of life. So, we might quite properly speak of a political practical wisdom or a military practical wisdom or even a managerial practical wisdom, the last of which directs and actively pursues success for organizations, including business organizations. Practical Wisdom in General Any discussion about practical wisdom presumes a set of convictions about human nature and about what constitutes the good for human persons. Classical moral philosophers like Aristotle, who first articulated a systematic theory of the virtues, had a fairly clear idea of what was necessary for a good human life. However, different theories of the good will inevitably give rise to different notions of what practical wisdom should be. For example, even though they may agree on some details, atheists and Christians will have divergent views about the ultimate and controlling good for human persons. What entails practical wisdom for one may in some cases be folly for the other. That said, regardless of the vision of the good that underlies it, practical wisdom is always a capacity in a person both to recognize a possible state of affairs that would be good to realize and to devise and implement a sound strategy for making that possibility real. That is, practical wisdom is always oriented toward action. It is a matter of judgment rather than a kind of knowledge, though it depends upon both knowledge and skill to be effective. Furthermore, in the exercise of practical wisdom, there are four moments or separate activities: first, there is a consideration of what possible state of affairs it would be best to pursue in a concrete situation, second, a deliberation about possible means, third, a choice or judgment about which means it would be best to employ in the circumstances (i.e., which plan to adopt), and fourth, the actual execution of the plan. We distinguish these four because each represents something that must be done well for our actions to succeed, which is also to say that each represents an element that can go awry and lead to failure. Human life is full of contingencies. Even if there were common agreement about what goods wise men and women ought to pursue, the real conditions of life are quite variable and often unpredictable. The first step in exercising practical wisdom is to imagine an objective which, though it is merely a possibility, would be good to make actual. This capacity to think practically depends upon experience as well as knowledge about the real world. For example, a choice about a career or profession to pursue will be practically wise if it draws upon a candid appraisal of one s interests and abilities (experience) as well information about what professionals in this field do and what education this requires. Making the choice may well entail consulting others and drawing on their wisdom and experience. The ability to take counsel is a key element of practical wisdom. 2

3 The second activity is deliberation about the means to be employed. At this stage, the task is not to evaluate the means but rather to generate ideas about what means could be available given the concrete conditions in which one must act. This deliberation depends upon knowledge or information about resources, limitations, and so on. The practically wise person will consult with others, where possible, in order to generate as complete a list of available means as he or she can. In our example, a person might generate a list of all of the ways it might be possible to prepare oneself for a chosen career. The third activity is simply a judgment, a decision, about which means to adopt. In many cases, a variety of means are possible, each with its own benefits and costs. Some of the means may be unsound, either because they are impractical (e.g., too costly or too unlikely to succeed) or morally bad (i.e., they involve damaging or destroying other goods that deserve to be protected). In most cases, we also face an array of practical and morally sound means that nevertheless require us to determine which one is best in the circumstances. Here again, the wise person seeks and considers the counsel of others in order to evaluate accurately the possibilities that the situation presents. In preparing for a career, for instance, wise persons would avoid educational possibilities that would burden them with crushing debt and also reject such means as cheating and fraud. Finally, the plan must be executed. Persons of practical wisdom must also possess the knowledge and skill to implement the plans they choose and to make them successful. To return to our example, the wise person would evidence skill in assembling the resources necessary to pursue the chosen course of education as well as the ability to do the work required. Failures of Practical Wisdom Practical wisdom is, therefore, an ensemble of abilities which work together to produce good actions and results. However, it is possible for persons to possess some, but not all, of the required abilities and so to fall short of really being practically wise, even if they give the appearance of being so. There are two broad ways in which this can happen. First, a person might be quite capable of identifying good ends to pursue but ineffective in devising or implementing means to achieve them. We tend to think of such persons as incompetent or impractical. They may have excellent ideas, and may be very good and insightful when it comes to criticizing the goals of others, but unless they can enlist the cooperation of people with skills at implementation, they will accomplish very little. These people are imprudent. Second, some persons are very clever and skillful at implementation but evidence little capacity to make good judgments about what goals to pursue. They might be good technicians who are indifferent to the ends realized by their work and this may be morally unobjectionable in many cases. They may also be persons who are so focused on accomplishing something that they are willing to use morally bad means to do so. In either case, these people display a sort of false prudence. 3

4 Practical Wisdom as a Managerial Virtue In the contemporary developed world, organizations of all kinds play a critical role in the lives of everyone in the society. It is nearly impossible for anyone to work or to assemble the necessities of life without interacting with organizations of one kind or another. As never before, it is crucial to the common good and to individual well-being that organizations be wisely managed. The ability to manage well constitutes a special form of practical wisdom. While good management will take care to avoid harming the overall well-being of all of the persons it may affect, its particular focus is on making an organization effective and successful in pursuing appropriate, worthwhile goals. In what follows, we will consider the situation of business organizations but analogous observations could be made about the practical wisdom of managers in non-profit organizations and government agencies as well. All organizations, including business organizations, are the kind of organizations they are because of the goods they pursue in general. A business, for example, is an organization that seeks (or ought to seek) to provide a product or service to customers, to sustain good work for employees and to create wealth for owners and investors by doing so. A nonprofit might be engaged in providing a similar product or service but since it does not aim at creating and distributing wealth to its owners, it is a different sort of organization. More concretely, no company is organized simply or solely to make money. Creating wealth may be one of its objectives but concretely it is organized to pursue that objective by engaging in a particular range of activities. To put this another way, for the managers in an actual business the goods to be pursued, whether in general (create wealth, sustain employment) or in particular (serve these customers, provide these sorts of products or services) are taken as given. That said, the four elements of practical wisdom are evident in specific ways in the work of managers. And only when they are all present can managerial work be truly effective and successful. Wise managers must recognize possible goals to be pursued: Some businesses, at some times, may operate in a very stable environment, with few changes or external shocks. Managers in such businesses, which must be increasingly rare in the contemporary world, have little opportunity or need to exercise practical wisdom. They may be content with pursuing the same goals as they did the year before, using the same means, and being satisfied with the same results. However, in most businesses wise managers must be aware of factors that would impede their pursuit of last year s goals and be alert to new and perhaps hitherto unimagined possibilities. This would lead them to imagine new possibilities for products or services. It would not ordinarily involve changing the nature of the business but it could entail moving the company in new directions consistent with its existing resources and competencies. A dramatic example of this can be found in companies like Apple under Steve Jobs, which successfully invented new product lines, while drawing on the organization s fundamental skill sets. 4

5 Managers must deliberate about means: Deliberating about means entails generating a list of possible courses of action that might be employed to achieve the goal. Wise managers have the capacity both to appraise conventional means astutely and to imagine new means that the organization might employ to achieve its goals. In both cases, seeking counsel is an important element of deliberating wisely. Good managers will not be unreasonably committed to using old methods nor will they allow a misplaced pride to prevent them from receiving advice from others. They will even be open to finding examples in the effective practices of rivals. Furthermore, in generating this list, wise managers will exclude means that are impractical, inefficient or unethical, leaving only those that are reasonable possibilities for the organization. This requires a knowledge and appraisal of the organization s resources and capabilities, a knowledge of the technical demands of the project and familiarity with the environment in which the organization operates. Consider, for example, the way in which a company like Amazon devises and experiments with different ways of delivering its products to customers by reimagining the entire logistics chain. Managers must make judgments about action: The essence of practical wisdom is good judgment about action. For managers, this means not only good judgment about possible goals to be pursued but also good judgment about which of the available means would be best to employ under a specific set of circumstances. Action requires choice and deliberation about means must come to an end. Wise managers certainly employ criteria to determine the best means to use in particular circumstances, such as efficiency, likely effectiveness, costs, ethical implications, and so on. But since some uncertainty almost always surrounds the assessment of these criteria, wise managers also bring a sound intuition about probabilities to their decisions about means. They may not be able to determine which course of action is absolutely best but they are able consistently to choose an effective and morally sound means in spite of the uncertainties. Examples of this are so common that they largely go unnoticed; we take them for granted in wellmanaged organizations. Practical wisdom in managerial decisions about means is probably most evident in situations of crisis. The best managers do not simply act defensively in such cases but are able to perceive the means that will promote the company s objectives in the long term, even if choosing those means is painful in the immediate future. Managers must coordinate execution: A well-conceived plan must also be wellimplemented. Wise managers, therefore, must not only be able to choose sound courses of action, they must also possess the skills necessary to execute effectively. This may entail technical skills appropriate to the plan but in their role as managers they must evidence skills in coordinating the work of others. They need not, and often will not, execute the plan personally but they do need to organize their subordinates to bring the plan into action. The best collaborations are voluntary, where people freely choose to contribute their skills and energies to implement a plan. To bring this about, managers need skills in explanation and persuasion, to say nothing of a commitment to respect the dignity of employees and customers. They need to appreciate the objections and reservations people might have and persuade or negotiate cooperation. They need to inspire trust and they need to understand what may incent or motivate their collaborators. 5

6 (Force and threats of punishment can result in a limited degree of cooperation but they have no place in wisely-managed organizations.) In anticipation of the need for sound execution, wise managers will also be careful about staffing their organizations with people whose interests and motivations align strongly with the organization s objectives and practices. All of this belongs to practical wisdom in management. Legendary managers and leaders demonstrate that this capacity for execution is indispensable. Developed societies depend upon the smooth functioning of all sorts of organizations, among the most important of which are businesses. These organizations, in turn, cannot function well unless they are led by managers of practical wisdom. Some of the knowledge necessary for this virtue can be taught and some of the skills it requires can be practiced but fundamentally this virtue is acquired by experience. Its full exercise is what makes the operations of an organization ethical and what ensures its success, properly understood. Further Reading: Bartlett, R and Collins, S (trans) (2011) Aristotle s Nicomachean Ethics. Chicago, University of Chicago Press Gilby, T (general ed) (1964) Aquinas s Summa theologiae vol 36. New York, McGraw- Hill. Nelson, D (1992) The Priority of Prudence. University Park, PA: The Pennsylvania State University Press Pieper, J (1959) Prudence: The First Cardinal Virtue. New York: Pantheon Books Yuengert, A (2012) Approximating Prudence. New York: Palgrave Macmillan 6