The Wise Company summary

Rather than just obtaining valuable knowledge, we should focus on knowledge practice. What’s the right thing to do with the knowledge once you have it?

For the answer to this question, let’s get a little philosophical.

There’s another important name from the past that deserves mention, the Austrian economist Karl Polanyi. He brought together psychology and economics when he emphasized the importance of tacit knowledge in informing our actions. He focused on the impact of our actions on the world around us.

Polanyi recognized that companies are social institutions. Their actions influence society, just as changes in society will affect a business. 

Part of being a wise leader and utilizing knowledge practice is knowing how to grasp the essence. What is happening right now? What are the future consequences of plan A or plan B?

These are the kinds of questions that wise leaders need to be able to quickly assess, articulate, and act upon. Especially now, when changes in the marketplace can happen fast, and responses need to be devised as soon as possible.

Central to the success of the Balmuda toaster project was ba. Ba is a Japanese word that, roughly translated, means space or place. It refers to an area where people meet and ideas and information are exchanged.

This is important because for knowledge practice to work within a company, ideas need to be generated. Knowledge has to spiral outward through the company and touch everyone involved. This happens through the use of ba, by bringing people together.

Having a strong sense of purpose won’t get you very far if you can’t communicate it properly. Likewise, you can set up all the meetings and group outings you want, but your company will only be successful if everyone is on the same page. For that to happen, a wise leader needs to communicate the essence.

Fortunately, there are some proven ways in which leaders can effectively share their vision and get everyone on board with the same purpose.

What do you think of when you hear the term Machiavellian? Perhaps you think of evil, power-hungry schemers. In fact, that may not be entirely accurate if you take an honest look at Machiavelli’s best-known work The Prince.

As the scholar Richard Samuels points out, the wise prince isn’t necessarily evil. He isn’t even opposed to a higher good. He’s also willing to adapt and conform to whatever the current situation may require. Yes, he believes that the end justifies the means. But as long as you’re always standing on solid moral grounds, he may be right.

For a company to be a success, practical wisdom can’t be limited to CEOs and executives. Wise leaders need to share their passions, their inspirations, and, most of all, their knowledge. Wise companies practice mentorship and apprenticeship, and encourage leadership distribution.

One of the central principles of practical wisdom is the sharing of that wisdom. It’s important for wise leaders not to think that this wisdom should only be shared with other executives or managers. In wise companies, everyone should know what needs to be done. Practical wisdom must be cultivated at every level.