How Pop Culture Gets It Wrong About CEOs

In pop culture these days, CEOs are rarely seen as wise men or women. The world of business is less considered the home of those with great wisdom than of those who merely create products, services, failures and fortunes.

But if wisdom includes the ability to predict the future, as Norman Cousins proposed, I suggest it is business leaders who possess the uncanny ability to “see around corners.” That kind of predictive intelligence—judgment by another name—often consists of simply understanding human nature. It’s a true gift to know how individuals are likely to respond to new stimuli, new rules and new goods.

More than in the academy, and more than in modern politics, business is an excellent place to practice predicting outcomes. For one thing, business leaders are constantly called on to allocate such scarce resources as time, people and money. A leader’s job is to take risks and to be responsible for “deliverables,” continually adjusting along the way. Doing this well in a dynamic market is how our best leaders attain the wisdom on which successful human enterprise is built.

One of my Stanford colleagues, Jeff Pfeffer, likes to say that most veteran business executives—rather than having 20 years of experience—have one year of experience 20 times over. He’s right. Most of us fail to “connect the dots.” We miss the chance to build a larger theory that’s predictive. And we therefore fail to appreciate causality.

It can surely be tempting to give a “case-of-first-impression” reaction to new information, rather than to try to fit it into a systematic framework based on our accumulated experiences. And there is a certain benefit that comes from seeing things with fresh eyes. Indeed, much innovation comes from entrepreneurs who are untethered to how things have always been done.

But ideally, judgment comes from combining the innovative instincts of the neophyte with the accumulated knowledge of the old hand. We tend to forget, for example, that it took time in the wilderness for Steve Jobs to become the genius he did in his second run at Apple. He learned about himself by learning from others. In the wrong hands, last year’s playbook can stand in the way of today’s breakthrough technology. But it might also cut short the time needed for a CEO to think through each apparently brand-new question. A leader needs both talents.

To develop business wisdom, you need to be proficient at three things:

  • Execution: All the great ideas in the world mean little if you can’t prioritize. That means knowing how to simplify. More than anything else, turning plans into products, and conversations into services, requires knowing what to cut out.
  • Team-building: Most worthy enterprises demand teams. Knowing how to hire, whom to promote, and when to let someone go is a key element in developing predictive wisdom. In a culture of genuine teamwork, in which everyone derives meaning from his or her work, there are few bounds on achievement.
  • Networking: The wisest people I know plant seeds they assume will never bear fruit. Yet everything they touch seems to work better for their having touched it. That’s because these wise people realize that everything is connected, that what goes around comes around. Theirs is the wisdom of the long-term—of seeing the power of adjacencies and collaboration.

To develop all three skills, listen with humility and without fear. Combine the curiosity of a novice with the determination of a champion. If you get really good at these, you’ll truly be wise—and the market will beat a path to your door.

By Joel Peterson