Capitalism with a Human Face

If the Jim Collins bestseller Good to Great was all about how companies can transit from ‘average’ to ‘great’， From Smart to Wise is about how business leaders can make a similar leap. Authors Prasad Kaipa and Navi Radjou （who also co-authored Jugaad Innovation） argue that while ‘smartness’ is necessary to succeed in business， it is not sufficient to do so in these complex times. Wise leadership succeeds where smart leadership cannot， they maintain.

So， how does one rise from being a smart leader to a wise one？ The first step， according to the book， is to find a noble purpose which it calls one’s ‘North Star’. Such a purpose， transcending the self， will enable leaders to apply smartness wisely instead of for mere personal benefit. It will bring authenticity and ethical clarity to their actions. Thus， for instance， when software giant Microsoft was being bombarded by a series of anti-trust trials at the beginning of this century， its legendary CEO Bill Gates stepped down and became instead its Chief Software Architect and Chairman of the Board. More importantly， he established the Bill & Melinda Gates Foundation and explored how he could use his wealth， smartness and leadership skills for the common good.

Gates’s initiative amplified and elevated his smartness， saw him perceived as a wise leader and enabled him to operate on a higher plane， the authors say. Today he is no longer seen as an aggressive and polarising figure who abused monopoly power at Microsoft， but as a righteous and moral figure tackling global problems such as the lack of universal education and the spread of infectious diseases. Microsoft has certainly benefited from this image change.

The authors go a step further and call for combining social consciousness with business performance. Are the two not mutually incompatible？ No way. “Take the case of Unilever Chairman Paul Polman，” Rajdou told Business Today during his recent visit to India. “Polman has said that by 2020 Unilever will double its revenues and halve its environmental impact. This is what we call enlightened self interest.”

Wise leaders， Rajdou added， align their actions to their North Star， act boldly and yet prudently， sensitive to the context in which they are working. They maintain their equanimity， rely on their intuition and above all， act with integrity.

The book offers a step-by-step guide to how a leader can make the transition from smart to wise offering examples such as apart from Gates Apple’s Tim Cook， PepsiCo’s Indra Nooyi， Unilever’s Polman， Infosys’s N.R. Narayana Murthy， Ford’s Alan Mulally， Xerox’s Ursula Burns and Tata group ex-chief Ratan Tata， to name a few.

The authors could， however， have focused more on the link between wise leadership and corporate performance. In the book， in some cases， this relationship has to be inferred. Also， while there are many examples of successes， instances of how smart leaders failed because they were not wise enough would have added more value.

At a time when the world is grappling with one corporate scandal after another， it is time the board of every company asks its CEO to spell out what his North Star is and how he will align his actions to it. If the authors are to be believed， this is the best oversight possible when it comes to corporate governance.