Business decision-making is complex.

One reason
we admire a business manager is for the quality of
his or her decision-making. Research into wise
management indicates that managers become
outstanding when they are able to transcend
self interests for the sake of the common
good. What does wisdom mean in the
practice of managerial decision-making?
bv Dr Mike Thompson
SPOTLGHT
59
SSUE 4 \\ 2013
I
n April 2013, Mr Tan Suee Chieh, chieI executive oI
NTUC Income, was named as Outstanding chieI exec-
utive oIfcer (CEO) oI the Year at the Singapore Busi-
ness Awards 2013 ceremony. I was struck by Mr Tan`s
brieI and gracious acceptance speech. During his six-year
tenure as CEO oI NTUC Income, Mr Tan saw NTUC`s
capital adequacy ratio increase Irom 187 per cent in 2006
to 271 per cent in 2012the highest in NTUC Income`s
history. But in his acceptance speech, Mr Tan chose to re-
Ier to NTUC Income`s social purpose oI providing aIIorda-
ble, accessible, and sustainable insurance, remarking that
'social causes are more uniIying than private gain.
In listening to him speak, I could sense that the company`s
philosophy oI 'Honest Insurance was a deep conviction
and not merely a slogan. Mr Tan dedicated his award to
all the people in NTUC Income and reminded everyone
present oI 'what is possible iI we set our dreams and ide-
als high and pursue them with passion and commitment.
In October, Mr Tan would have become group CEO oI
NTUC Enterprise to scale up NTUC social enterprises to
meet the needs oI Singaporeans Ior aIIordable and qual-
ity products and services.
The Singapore Business Awards 2013 are a symbol oI the
communal desire to recognise good people and companies.
OI course, in business we expect admirable companies to
be making profts not losses, but we also look Ior more in-
tangible signs oI goodness. Amidst the anger we Ieel to-
wards leaders who do not command respect, we like to pick
out leaders that we admire. The people best able to make
that judgement are the people who are in the sphere oI the
leader`s infuence. They can better understand the diIfcul-
ties oI making the best decision when there are no good
outcomes Irom a challenging business situation.
People who were in Mr Tan`s circle were interviewed aI-
ter the awards and oIIered genuine comments about his
achievements. One oI the reasons that a business manager
is admired is Ior the quality oI his or her decision-making.
Decision-making in the complexity oI business can never
be a perIect art. But when managers are able to transcend
their own selI-interest Ior the sake oI their responsibility to
their organisation and its stakeholders in making an 'un-
selfnterested judgment, then they are admired Ior their
character and not just their perIormance.
Business decision-making is complexespecially when
plans do not work out and alternative plans have to be put
into place at speed. Statistical techniques are prone to esti-
mation errors, and data points may be incomplete or even
non-existent despite the ever-increasing reliance on big
data. Investment decision-making is also complex. Ana-
lytical modelling used to assess the risk oI losses in a port-
Iolio are less secure than once believed. The once-powerIul
Value at Risk (VaR) model has now been Iound to contain
inherent risks in its methodology. In the midst oI complexi-
ty, managers need wisdom to respond to complexity and
uncertainty with simplicity and consideration Ior the hu-
man Iactors within and beyond the organisation.
But what does wisdom really mean in the practice oI
managerial decision-making? From 2010 to 2012, the
Centre oI Leadership and Responsibility at the China Eu-
rope International Business School (CEIBS) conducted
an enquiry into this question. We surveyed 94 executives
in Western countries and 97 Chinese executives. Most oI
the respondents worked in commercial organisations at
the most senior levels. We asked them to explain what
wisdom meant to them. Management has oIten been
regarded as a Iact-based scientifc approach and mana-
gerial decision-making requires knowledge (technical
expertise, data, Iacts) and a rational approach. We also
asked the respondents how wisdom might add something
more to the decision-making process.
The executives` responses generated 18,000 wise words
which have been analysed and mapped. For example,
a vice-president oI a multinational insurance company
described wisdom as 'the critical element that separates
good decisions Irom brilliant, successIul decisions, as
well as what separates the decision-making oI eIIective
leaders Irom that oI mere managers or bosses. When the
most commonly-used phrases and ideas were grouped
together, it became clear that the complexity oI wisdom
could be visualised as a three-dimensional prism with
three clusters oI human capacities: rational capability,
intuitive insight, and humane character.
Wisdom is More than Brain Power
Research by cognitive psychologist, Gary Klein, leads
him to believe that 'many business intuitions and exper-
tise are going to be valuable; they are telling you some-
thing useIul, and you want to take advantage oI them.
1

Intuitive insight is a sight Irom within` that provides Ior
the ability that I have oIten observed in entrepreneurs
in which they can almost Ioresee opportunities and risks
that are not observable through conventional methods
using data analytics.
Mr Su Xin, Iounder oI the Chinese Go-High Iund, began
his entrepreneurship aged 40 by buying a commercial por-
tion oI the Kaide Huaxi buildings in Shanghai in 2009. Mr
Su`s opinion was that commercial real estate was under-
valued. Then he looked Ior the Iacts which supported his
60 SSUE 4 \\ 2013
(M THOMPSON)
opinion. BeIore building a business model, Mr Su made
the Kaide Huaxi investment as a random choice: 'It`s
totally unlike what they tell you in the textbooks, which
is: frst, fnd a direction; then decide what resources are
needed. Reality isn`t as perIect as a textbook.
2

By 2012, Go-High was named among the Top 10 RMB-
denominated private real estate Iunds by CBN Maga:ine.
Mr Su had leIt a saIe and lucrative job as a board director
oI SOHO China Limited, a prime oIfce space developer
which he describes as 'a decision I made with my heart.
He needed a change and wanted to do something that he
really lovedit became a 'spiritual awakening.
3
The idea oI entrepreneurs trusting their intuition and
Iollowing their heart is not new. Mr John Mackey, the
co-Iounder oI Whole Foods Market, a US$12 billion
Iood retailing business, borrowed US$45,000 in 1978 to
start his frst store in Austin, Texas. In his book with Mr
Raj Sisodia entitled Conscious Capitalism, Mr Mack-
ey writes about business as a 'wonderIul vehicle Ior
both personal and organizational learning and growth.
Mackey recounts what he calls 'awakenings oI rising
consciousness in his liIe and work and recalls that in
this early twenties 'I made what has proven to be a wise
decision: a liIelong commitment to Iollow my heart
wherever it has led mewhich has been on a wonderIul
journey oI adventure, purpose, growth, and love.
4
Intuitive instincts require checking wherever possible
primarily with known data points and knowledge using
one`s rational capability. Being aware oI the limits oI
one`s prejudices and expertise is also part oI the rational
balance to intuitive judgements. But in the 21
st
century
there has been a greater willingness to recognise that in-
tuition and the sense oI selI is not Iully explained by ce-
rebral reason or scientifc` knowledge alone. Science
can only measure outward behaviour and not what
people reIer to as gut instinct`. According to Aristotle,
wisdom requires intuition and scientifc knowledge.
RationaI CapabiIity
Wise managers are competent
in reading and analysing the data
objectively and rationally to inform
quality decision-making. Executives
in the Wisdom Project survey spoke
about how wisdom helps with the
rational processes associated with
managerial decision-making.
Humane Character
Character is the nature self-shaped by our values
and beliefs. t relates to what we might call our
"inner world. Being humane means living with the
tension of following our own self-interest whilst
considering others and living for the common good. Being
humane describes all the best characteristics of human
nature: care, compassion, respect, integrity, love, cour-
age, justice, and moderation. n short: goodness. Adam
Smith called it "fellow-feeling. A Russian general man-
ager in our survey commented that "a wise person is a
kind one, not a saint but ethical, with high morals. His
personal values are human-oriented; more listening than
speaking.
Intuitive Insight
n the words of two Chinese
executives, information, data,
and a rational approach are "use-
less or "insuffcient. What emerged
in the data was the power of intui-
tion as a hallmark of wisdom. The
vice president of a biofuels company
told us: "Wisdom is close to intuition.
t refers to insight into what might hap-
pen in the future. t combines intui-
tion with logic and applied common
sense. A UK toy retail chain director
described wisdom "as an ability to read
how events will play out in the future
and make decisions accordingly.
The Wisdom Prism
61 SSUE 4 \\ 2013
Dr Mike Thompson is Professor
of Management Practice at the
China Europe nternational Busi-
ness School, Shanghai where he
teaches leadership and corporate
governance. He is co-founder of
Good Leaders Online, the talent
network and recruitment portal and
was formerly CEO of GoodBrand,
the sustainable enterprise con-
sultancy.
Wise leaders are aware oI their prejudices, their social
conditioning, and are thus able to moderate the tendency
to be over-optimistic with their intuitive instincts. But
they have also learned to value intuition and combine
this with their rational capability and experience.
!"#$%& ()$*$+,&*
The idea oI humane character approximated to Aristot-
le`s description oI the good and proper Iunction oI hu-
man liIe as an activity oI the soul that expresses genuine
virtue or excellence. This is evident in Mr Tan`s passion
Ior honest and good business and his championing oI lo-
cal social causes and campaigns such as 'I Care Ior My
Cleaners and the Singapore Children`s Society.
Despite all the bad press about some business leaders,
there are still many business leaders who demonstrate
wisdom in their judgement and leadership. Mr Paul
Polman, CEO oI Unilever has been praised Ior his selI-
less energy in leading his company to serve the common
good. He has made clear that he only wants shareholders
who are with Unilever Ior this sort oI long-term project.
And Unilever`s share price continues to outstrip its com-
petitors on the New York Stock Exchange.
But there are many business leaders who do not attract
the media headlines. Yet, they are admired within their
own circles Ior their capacity to live beyond their selI-
interest in making judgments that serve the good oI all.
This does not mean that wisdom does not take care oI
one`s selI-interest; it simply means that there is wisdom
in striving Ior a bigger world and combating bad news
with good news about companies and brands wanting
to do good while delivering fnancial returns. To just do
well, according to Mr Tan, is not good enough: 'Busi-
ness enterprises must make social sense. People beIore
profts; not profts beIore people.
5
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So, what has all this to do with the complexity oI manage-
rial decision-making today? The responses by the senior
executives in the CEIBS Wisdom Project can be summa-
rised by Iour general principles which support fndings
by wisdom research proIessors Bernard McKenna and
David Rooney oI the University oI Queensland Business
School:
Wise leaders have Ioresight,
Wise leaders use reason, experience, and careIul
observation,
Wise leaders allow Ior non-rational and subjec-
tive elements when making decisions, and
Wise leaders have an orientation beyond selI-
interest towards the common good.
The Iour principles are by no means a Iull defnition oI
wisdom in practice but they set out broad themes which
will help managers to make wise decisions.

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1
Garv Klein interviewed bv McKinsev Quarterlv, 'When can vou
trust vour gut?`, March, 2010. Source. https.//www.mckinsev-
quarterlv.com/StrategicdecisionsWhencanvoutrustvour
gut2557.
2
Su Xin interviewed bv Kellv Chen and Shawn Shen in The Link,
CEIBS Alumni Maga:ine, CEIBS, Shanghai, vol 2., 2013, p. 35.
3
Ibid, p. 39.
4
Mackev, J and Sisodia, R., 2013, Conscious Capitalism, Har-
vard Business Review Press, Boston, MA, p.7.
5
Tan Suee Chieh speaking at the NTUC Enterprise Semi-
nar, 31 Januarv, 2013. Source. http.//www.voutube.com/
watch?vBuHO:lTAveY
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