Practical Wisdom

“The ability to take the right actions at the right time and for the right reasons.”

To adequately deal with situations that involve human interaction, character is needed.  Aristotle called the character traits that deals most effectively with this interaction practical wisdom. 

People with practical wisdom have the moral will to do the right thing and the moral skill to figure out what the right thing is in any particular situation.

A good example of how wisdom is obtained is the Wisdom or DIKW Hierarchy.  It best illustrates the evolution of data to wisdom.

 

 

 

The first level in developing practical wisdom is knowing all the data (facts). These alone have no meaning until you give them a context in which you connect the facts and create information.

Information then turns into knowledge when you provide a structured framework to this information through experience, learning and understanding.

This knowledge turns into wisdom when the principles of past experience and knowledge are used to do the right thing.

You will notice that data and information are past tense while wisdom is the future. However, you need these steps to build on each other to evolve to wisdom.

Wisdom comes from experience which cannot be obtained in a vacuum.  We need alternate perceptions and realities through relationships, dialogue and interactions to blend collective knowledge into wisdom.

Practical wisdom is therefore considering future states, with possible implications and can anticipate problems and create scenarios that deal with these implications to the future.

References and Resources:

Collation of EMBA Research, notes and practical experience

“Practical wisdom and organizations” Barry Schwartz

“Making work systems better” Luc Hoebeke

“The Attitude of Wisdom: Ambivalence as the Optimal Compromise” by Karl Weick

We now understand what the term strategy means to our business and team, but how do you go about developing the management tools to help you create the right strategy? In the next few weeks we will look at developing management’s strategic capability and practical wisdom.

Strategic Capability

It is said that strategic capability is the “ability to imagine plausible futures and how they might unfold” and “the ability to shepherd the present into a more flourishing future”.

As previously noted, Luc Hoebeke refers to three levels of management as the first level which manage the present, the second plans the future and the third shapes the future.  It is in the planning and shaping the future that we need strategic capability.

From this we can see that in order to have strategic capability we need facts, experience, and imagination for to create this desired future path.

How is this achieved?

To create an unknown future path, we need to rely on our knowledge, beliefs and values but there is a still a fine line between overconfident certainty and over cautious doubt or fear.

To find the balance we need to really know our current situation – the skills, resources, abilities and “aggregate functioning” of all stakeholders before we can see if we have the capability to change towards a desired future state. This informed perspective of the current situation provides the framework of developing strategic capability and provides insight into future consequences of your strategy as you picture it unfolding.

It is this ability to imagine the future state with its potential scenario gains (benefits) and losses (risks) together with the motivation and desire to see it through that enhances your strategic capability framework.

References and Resources

“Practical wisdom and organizations” Barry Schwartz

“Making work systems better” Luc Hoebeke

“The Attitude of Wisdom: Ambivalence as the Optimal Compromise” by Karl Weick

What is mindfulness? or Mindful management?

Mindfulness means paying attention in a particular way; on purpose, in the present moment and non-judgmentally.

Mindfulness is about being fully awake in our lives. It is about perceiving the exquisite vividness of each moment. We feel more alive. We also gain immediate access to our own powerful inner resources for insight, transformation, and healing. (Jon Kabat-Zinn)

In a nutshell –it is being fully conscious of, and in the present moment and paying attention to whatever that moment can bring.

Mindfulness practices like meditation or breathing exercises help us to manage our emotions and bring clarity to thought processes. It is through this, that we can enhance our connection with others.

However, in the fast paced world we live in, practicing mindfulness could even be just stopping what we are doing to take the proverbial “deep breath”, slow down for a moment and reconnect with ourselves and what we are doing in that moment, that can make us mindful.

We can see through this explanation that mindfulness is a leadership trait, but how does it help us to manage mindfully?

Taking a mindful approach in our interactions with others, impacts the interaction. For example, a manager ensures instructions are carried out by those under them.

So, if a manager was mindful in the way they executed and managed the instructions given, perhaps the relationship and the desired outcomes could also be enhanced?

How would that work?

Being present in the moment and conscious of ourselves would mean we are more aware of our actions and the impact those actions have on others.

So the approach taken in managing others is considering how we influence them and what impact our actions towards others will have on the outcomes we want.

We might think we are being mindful when we manage, but it’s more than just being caring and considerate – it is being open to what is happening then and there in that moment.

It is to really immerse yourself into the present moment and consider all impacts that your actions as a manager can have, that results in mindful managing.

It is only when we are truly conscious of how we are influencing others in the workplace and what impact we have on them, that we can reflect on our behaviour and adapt or change it.

This is how we start to become self-aware and can enhance our relationships with our staff.

Below is a video and insights on Jon Kabat Zinn mindfulness exercises at a session he did for the Google team.

Why The Bigger Picture is Important for Business Growth!

Sometimes we just get stuck in the operations of our business – trying to make the customer happy while facing challenges with suppliers, debtors, creditors, staff and everything else that goes with having your own small business.

We forget to stand back and take a deeper look at who and what we are and where we are going and most importantly, how we are going to get there.

What are my company growth strategies?

Yes, it is scary sometimes as we crawl to stay ahead of economic downturns, but when we are stuck in an operational rut (inertia) we lose sight of opportunities not only for sustainability, but for growth and change.

Types of growth strategies.

Tip 1:    When in doubt, pull yourself back – away from all the small detail and look at the bigger picture.  This clears out the clutter and helps you keep aligned with your vision, mission and promise.

Tip 2:    Find more perspectives – a business associate or mentor to give you that fresh insight and another world view.  The power of knowledgeable, practical and relevant feedback that is away from the operational (emotional) connection to your business yet relevant to your specific needs, is profound.

Tip 3:    Always be open to learn and grow.

Circular management is about engaging in perspectives with those around you, specifically your management team.

As top managers in business, the ability to look at situations holistically and from the widest viewpoint possible is a prerequisite so that the decisions we make are as informed and as accurate as possible so our chances of assessing a problem and sourcing a solution are improved.

Yet why don’t we engage the perspectives of our management team and staff around us?

Each of our views of the world are incomplete versions of the actual reality.

Enhancing communication and being open to discussing perspectives, ideas and solutions with your management team not only provides a collective and deeper awareness of situations.

Plus a circular management team also empowers the individuals and the team to take initiative and think strategically, which is a win / win scenario in any situation.

How to be an effective manager and run a management team successfully is a process and all available methodologies needs exploring for optimum results.

As said last week, inviting the perspectives of your management team and staff empowers individuals to take initiative and think strategically.  Productivity, efficacy and efficiency are pretty much a job expectation and a paid for service, but how can you make someone want to do something better?

If we didn’t have to work, we wouldn’t. Yes, we need to find something that stimulates our minds and keeps us active but why should someone be going the extra mile for us?

As a manager you need to get your staff’s buy-in to have eager and empowered staff.  To do this, you need to create desirability and feasibility for the employee.

Desirability in this context refers to a measure of attractiveness of an outcome for the employee – in most cases it is the opportunity to excel, prove they can do something by being entrusted with contributing more than what you contractually engaged them to do – and the chance to learn and grow.

Feasibility in this context refers to the relevance – it makes sense to do as you have suggested, as the employee can now see the future benefits (for them) which creates desirability.   If you can start to consider the staff’s perspectives and their future value of contributing to the bigger picture, you can create this buy-in and work in a circular-management format which will go a long way towards contributing to creating an environment of eager and empowered staff.

Growth is a natural evolution of adapting to changes over time. Even if your company does not grow in size, complexity, market share or turnover – there are fundamentals of change inherently happening in your company. The environment and market you operate in is constantly changing. Your staff are growing and changing over time – individually and collectively as a workforce.

To keep up with this type of ‘change’, the company will need to continually adapt to these external and internal forces to stay focused on their objectives. We know that as people, we grow over time through our experiences. We then reflect on these experiences and adapt our behaviour and thinking as we move forward. This applies to company growth too. To look ahead and have the capability to adapt to the natural changes and growth of your environment – your company also needs to grow, adapt and change.

Therefore, before we look at ‘growing’ the company’s turnover and profit– we need to look at the adaptability of the company to these inherent changes and growths happening around you.

How do you do this?

Look at the level of your company’s resilience to changes in your environment as discussed above. How in-tune and adaptable are you with what is going on around you? Understand your mission, vision and promise. Ask yourself the following:

1. Where are we as a company now?
2. Do we know where we are going?
3. Are we moving toward where we want to go?
4. If not, how are we going to get there?

If you can answer these questions you will therefore have a deeper awareness of your company’s resilience to the inevitable change and growth around you, then your fear of growth and change can be greatly reduced.

Next week we will look at how to take this understanding and transition from an income generating (craft) to a profit generating (enterprise) entity.

Understanding the transitioning from an income generating (craft) to a profit generating (enterprise) entity

From what I have seen, many SMEs are the result of what could be called ‘accidental entrepreneurship’.

With many South Africans needing to provide their own income steam due to the high demands on the employment sector, many take the leap to create this income stream through honing their craft and passion or creating a small operating entity (an SMME), selling a service or products as an entrepreneur.

After a while with the initial objective being achieved of generating an income, we often continue on the same course as a means to an end without considering the implications of evolutionary growth (as discussed last week).

Once our ‘company’ has survived the first year, then the second and so on – we suddenly realised that our little craft or entity has become lucrative and is suddenly a company – with more staff, structure and complexity, and is moving from a mere income generating to profit generating business.

The fear of what to do next with the implications and consequences attached to being a shareholder/manager is often the down fall of most SMEs at this stage.

As discussed last week, before you can grow your company you need to know where you are right now (income generating or profit generating), to where you are going and how you want to get there.

The thought of contemplating new processes, capital, statutory and HR issues (including being the staff psychologist and personal banker) and everything else in-between that goes with being a shareholder/manager, is enough to send us running for the hills.

But if we can stop and reflect where we are in a trusted space and give ourselves the opportunity to grown in unison with our companies and structure, failure can be averted.

This is where mentorship is providing an essential support system not only for providing a guiding framework to evolve you and your company to the next level, but the sharing of skillsets and knowledge through the experiences of others over time is the best investment one can make into their future sustainable growth.

Thus, without a single doubt I can say that understanding the transitioning from an income generating (craft) to a profit generating (enterprise) entity is absolutely vital to your success!

This month we will focus on defining and understanding what is right for our own businesses, as what is best practice for one entity might not be the best practice for another.

What does the term best practice mean?  From Wikipedia: “best practice is a method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark” (Contributors, 2015).  There are many ‘best practice’ approaches and formats to help improve standardization, governance and company bottom-line performance.  Unfortunately, less importance is placed on the integrative approach to blending this methodology with logic and relevance to one’s own entity.

Removing the cookie cutter approach:

Some best practice examples are:

Best practice for our own business needs to adhere to two fundamental principles – statutory requirements and ethical considerations. 

Statutory requirements –  Law is law and the formats and processes which provide the framework for adherence to statutory parameters are also the initial governance (management) frameworks providing the backbone to our company  structures.

Ethical considerations – In today’s connected world, we also need an integrated look at our business’s impact on our environments and stakeholders as this affects our own best practice.   Secondly, South African law provides a utilitarian approach to the business in which the directors, members or agents are legally bound to act in “the best interests of the company”.

The big variable is what are the best interests?

What benchmark does a best practice for one company have that can be the best practice of another? 

I don’t think there is a carbon-copy generic best practice that will serve different company’s best interests.  That said, best practices can provide templates on which to grow from.

To create your own best practice – research other best practices and invite perspectives and an integrated thinking approach.

Again, the more holistic and informed the approach, the more prepared you will be to choose and tailor make what is best practice for your business, your statutory requirements and your ethical considerations.

This way you can eliminate unnecessary and time-wasting formats and processes which enhances sustainability and gives you the confidence to continually evolve and improve your own practices over time, to best serve your company’s own best interests – both current and future.

So to have the right practice, create your company’s own best practice to best serve the company’s best interest.

Knowing what practice is the right practice for your business goes hand-in-glove with the value you want to create.  As your business grows, so does the value expectation.The term ‘blended’ or shared value has been around for a while yet it lacks active consideration in many SME’s.

What is shared value?

It basically evolves around value based leadership – where value is not only determined by economic return but by blending shareholder value and consideration into other values like societal and environmental. It incorporates investing in and maximising value generation of a wider net of value creation models and promoting a leadership style of inclusiveness through multi-perspectives and being authentic and open to change.

Why do it?

It’s not just about giving back or sharing economic returns, it is a long-term approach to integrated and design thinking.  It is a conscious and strategic plan in determining your impact on the environments in which you work that will work together with your sustainability and growth plan.

As said last week, for determining your own best practices, you need to have ethical considerations of your business impact on all your environments and stakeholders.  This would be a pro-active first step in working towards creating shared value.