The Oxford Dictionary defines wisdom as the capacity of judging rightly in matters relating to life and conduct. The essence of wisdom is soundness of judgment in the choice of means and ends, especially in practical affairs. Such a virtue should be carefully cultivated by every leader and consciously built into the culture of every organization. Oddly enough the literature describes our 'age of information' replete with 'knowledge-based organizations' but hardly addresses how to turn knowledge into wisdom.

In this article I shall suggest three ways of dealing with knowledge in organizations that can contribute to the making of wiser decisions. I shall contrast better and worse ways of creating, sharing, and utilizing knowledge. Wisdom in the organization culture is the resultant of conscious efforts to introduce specific norms of behavior associated with the use of knowledge for action.

All organizations strive to manage available knowledge in order to solve problems.

Some organizations strive to leverage available knowledge in order to prevent problems.

A few organizations strive to construct new knowledge in order to progress beyond problems.

The domain of health can serve to illustrate the three different paradigms or frames of reference. Knowledge has to be managed in order for society to move from passive acceptance of illness toward the curing of particular diseases.

According to the maxim 'an ounce of prevention is worth a pound of cure'. A wiser approach would simultaneously encourage the leveraging of available knowledge in order to establish general principles of disease cure and prevention.

Both these orientations define health as the absence of disease. If one looks upon health as a concern for how a person lives, for how that person uses his/her energy productively and creatively, then appropriate knowledge has to be imaginatively constructed in order to serve this ideal. The wisest approach requires the simultaneous efforts to cure, to prevent, and to strive for the ideal life.

Currently in industry, a problem-solving emphasis prevails. This language of problem solving shapes the direction of the organization. The language supports rationality and logic at the expense of imagination and value judgments. Technical concerns for 'what is' block out considerations of 'what ought to be under ideal circumstances' or even of 'what could be' to avoid recurrence of the problem.

The wise leader recognizes that problem solving, problem prevention, and ideal-striving all have their place at particular times. When the unit is embedded in managing frequently occurring problems, such a leader gets the unit to aim higher by introducing the language of problem prevention. Knowledge management merges into knowledge leverage, which aims to make optimal use of available knowledge, expertise, and technology.

To move from a deficiency to a growth focus requires constructing knowledge that can transform the organization. Transformation refers to second order rather than to incremental changes, to fundamental changes in the culture rather than to instrumental improvements. Wise leaders support the construction of knowledge that challenges prevailing assumptions and norms and that contributes to progress toward ideal standards.

An attitude of humility is preferred to an attitude of overconfidence regarding what one knows.

The overconfident claims to know everything that one needs to know in order to act. This person doesn't know that he/she doesn't know. The 'I know-it' person blocks awareness of relevant information. Worse still, the person discourages others from presenting viewpoints to the contrary. Subtle distinctions characteristic of complex situations are lost. Novel ideas that do not fit comfortably into the predetermined position are ignored.

Humility, the quality of having a more modest sense of one's own knowledge and significance, is not often advocated for organization leaders. Nevertheless wisdom requires openness, receptivity to new information from others. Wisdom requires a readiness to rethink ongoing strategies, to revise strongly held assumptions.

Perhaps this is the meaning in the following two quotes:

The organization that claims "We know what our customers want and need. We know what they think of us" is expressing a false confidence. A direct inquiry of the customers may reveal surprising attitudes and criticisms that could be useful in helping the company maintain their customers.

Similarly the differentiation and fragmentation of perspectives to be found within the workforce might shock managers who believe they understand their employees' outlook on the organization. Management would come to recognize that the workforce is not one cohesive entity embracing the company value system.

A wise leader believes that knowledge construction for transformation purposes is a social process, requiring the active collaboration and cooperation of those concerned with the wellbeing of the organization. This leader encourages passionate dialogues and earnest debate of alternate interpretations of the organization's current reality. This leader encourages the creation of imaginative scenarios for the future direction of the company. This leader is conversant with a variety of methodologies that exist for sharing knowledge throughout the organization.

Improvisation beats cautious delay.

The opposite of overconfidence lies in the belief that we don't have sufficient knowledge to launch a project. There are some that always insist upon the need for greater certainty, more accuracy, and more reliable information prior to action. This inflation of what still needs to be known leads to 'paralysis by analysis'. The possibilities of failure are exaggerated by this overly cautious attitude.

Wisdom comes through action coupled with a reflection about that action. The wise leader recognizes the value of quick responses in certain circumstances. This leader encourages improvisation, launching projects on the basis of plausible knowledge. Knowledge is plausible when it seems to fit the known information. It may be too late to wait until all the evidence is in.

Situations are always in a state of flux. Even if perfect knowledge were available at one point [an impossibility], knowledge obsolescence would take hold. The best way to deal with constant change is by seeking relevant feedback on project process, project progress and project outcomes.

Test marketing of product refinements or of entry into new market niches illustrates this concept. The organization watches carefully the results of its initial efforts, keeps what is successful and goes back to the drawing board when the feedback is negative. There is a tentative commitment to a project alongside its questioning. Early negative feedback can prevent major investments in the wrong areas while early positive feedback can encourage the efforts of the design group.

The three suggestions apply equally well to the behavior of an individual manager and to the norms for group behavior within the organization. A leader should promote an ideal-striving vision for the organization, should ensure that all interested parties have been consulted, and should trust his/her intuition to start things moving in a desired direction.

An ideal-striving organization inquires of its stakeholders and shares this knowledge with its workforce. This wiser organization is ready to act on the basis of tentative knowledge by using relevant feedback as a protection from downside risk and as a guide to upward success.