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Leadership renewal: towards the philosophy of wisdom

Nada Korac-Kakabadse, Andrew Korac-Kakabadse
and Alexander Kouzmin

To know that we know what we know and that we do not know what we do not know,
that is true wisdom. (Confucius)

Introduction
Leadership belongs more to moral philosophy than to scientific theory. If one
analyses Plato’s central problems of the character of a well-governed city; the
formation of its leaders; the pedagogy of their sensibility and vision; and the dis-
position of Callicles and Thrasymachus, it becomes evident that moral values are
the central theme. Burns’ (1978) comprehensive study of leadership establishes
that there is a difference in kind between the exercise of power and the exercise of
leadership and that the difference is a moral one. Burns (1978: 46) concludes that
‘the ultimate test of moral leadership is its capacity to transcend the claims of the
multiplicity of everyday needs and expectations, to respond to the higher levels
of moral development and to relate leadership behaviour — its roles, choices,
style and commitments, to a set of reasoned, relatively explicit, conscious values’.
As early as 386 bc, Plato initiated one of the first leadership training centres in
the world, an institute he called the Academy, in an attempt to create a new type
of statesman, a person who would be able to withstand the unwieldy pressures of
office. In the Apology, Plato (1956b) details the origins of Socrates’ humility in
defence against the charge of impiety and corruption of the youth of Athens at his
trial in 399 bc. In response to this puzzle, at the declaration of the Delphi oracle
that none is wiser than he, Socrates replies that he visited a wise man and that
after conversing with him, he went away thinking ‘I am wiser than this man:
neither of us knows anything that is really worth knowing, but he thinks that he
has knowledge when he has not, while I have no knowledge and do not think that
I have’ (Plato, 1956b: 36). The Socratic ‘ignorance’ paradox serves as the basis
for an understanding of philosophy as the search for wisdom.
As a living absolute, the Socratic message is a continual movement of a freeing

Nada Korac-Kakabadse is a Senior Research Fellow, and Andrew Korac-Kakabadse

is Professor of International Management Development and Alexander Kouzmin is
Professor of Organizational Behaviour at Cranfield School of Management, Cranfield,
UK. CDU: 35.06(100)
International Review of Administrative Sciences [0020–8523(200106)67:2]
Copyright © 2001 IIAS. SAGE Publications (London, Thousand Oaks, CA and New
Delhi), Vol. 67 (2001), 207–227; 017639
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208 International Review of Administrative Sciences 67(2)

of oneself from a presumption to know. Thus, leadership, as the exercise of

Socratic humility, leaves nothing untouched. No one set of characteristics
attributed to a leader or out of which a leader–follower relationship arises can, in
itself, give rise to the phenomenon of leadership without the presence of the
willingness to aspire to wisdom — that openness to ‘truth-as-a-process’ which is
Socratic teaching itself. The Socratic message found in the Platonic dialogue
Theaetetus suggests that a leadership role is an awakening — the birth of all
learning (Plato, 1957: 26).
This image of Socratic leadership may well serve as a guide to contemporary
leaders. Leadership in this sense is not to be equated with a hindering or post-
ponement of action. The leader–follower relationship is one which empowers the
followers and where both members of the relationship are led to creative activity
in which the horizons of meaning surrounding the issues at hand are perpetually
stretched. Plato’s philosopher-king model of leadership is based on Socratic
teaching. Writing in the 4th century bc, Plato’s philosopher-king rules the state
with an authority derived from his knowledge of the one Truth. For Plato, the
possession of the ‘wisdom’ of an ‘intellectual vision’ informing the principles of
government, as it informs the principles of human conduct in general, distin-
guishes a leader from followers. In his Republic, Plato claims that until ‘political
greatness and wisdom meet in one’ and ‘those commoner natures who pursue
either to the exclusion of the other are compelled to stand aside, cities will
never have rest from their evils — no, nor the human race, as I believe’ (Plato,
1956a: 431).
Although the presence of the philosopher-king does not in itself guarantee the
realization of the state as the embodiment of absolute justice, it is nonetheless true
that without the guidance of one who knows the essence of justice, the state is
condemned to be ruled in an arbitrary and capricious fashion. Thus, in interpreta-
tive, ideological inter-actions, what distinguishes contemporary leaders from
followers is the possession by the former of a degree of critical perspective which
is developmental in the latter. The developer-leader, for example, can develop
(lead) only insofar as he or she possesses higher levels of competencies than the
developing-follower with regard to the infinite nature of the task of imparting
competency (knowledge or Socratic truth). The very essence of development
consists of the mutual offering of perspectives which allows and promotes the
movement of followers into leadership roles.
From Aristotle to the contemporary literature (Burns, 1978; Jeannot, 1989;
Bass, 1990; Korac-Kakabadse et al., 1996), it emerges that the transforming
power of moral leadership requires a certain kind of wisdom and maturity — or
what Aristotle terms ‘practical wisdom’; certain traits of character and qualities
of mind. Aristotle distinguishes practical wisdom from scientific knowledge on
three accounts. First, for Aristotle, scientific knowledge is knowledge of the
necessary and eternal (Aristotle, 1985: 24), whereas practical wisdom ‘is human
concerns about what is open to deliberation’ (Aristotle, 1985: 1b). Second, scien-
tific knowledge is knowledge of the universal, whereas practical wisdom ‘must
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Korac-Kakabadse et al.: Leadership renewal 209

also come to know particulars’ (Aristotle, 1985: 1141b15). Third, scientific

knowledge is contemplative, whereas practical wisdom is concerned with action.
Aristotle does not suggest that scientific knowledge is irrelevant to leadership
or that general principles are unimportant to the practically wise person; but that
knowledge of abstract rules is not the same as ‘good deliberation’. For Aristotle,
‘the content of wisdom is always the same, but the content of practical wisdom is
not’ (Aristotle, 1985: 24–5). Because the content of practical wisdom is not
always the same, it is misguided to expect that scientific formalism will determine
it. Aristotle also distinguishes ‘craft-knowledge’ from practical wisdom, based on
a distinction between ‘production’ and ‘action’ (Aristotle, 1985: Book I, vi. 4–5).
For Aristotle, practical wisdom is more like a craft than a science, as both craft-
knowledge and practical wisdom require being ‘able to deliberate finally about
what is good and beneficial’, whereas craft-knowledge is ‘about some restricted
area such as what promotes good health or strength’ — exemplified by delibera-
tions characteristic of good doctors. Good trainers and practical wisdom is ‘about
what promotes living well in general’ (Aristotle, 1985: 1140a25–28).
Practical wisdom is not the same as expertise in a technical specialization, but a
kind of expertise that requires practice and experience. For Aristotle, to study the
character of practical wisdom fruitfully, people should have done some living,
gained some maturity and assumed some responsibility as householders and
members of civic communities. Abstract formulas generated in a theoretical
vacuum cannot substitute for deliberating finally about what promotes living
well. He notes:

the fact that whereas young people do become accomplished in geometry and
mathematics, and wise within these limits, practically wise young people do not seem
to be found. The reason is that practical wisdom is concerned with particulars as well
as universals and particulars become known from experience, but a young person
lacks experience, since some length of time is needed to produce it. (Aristotle,
1985: 1142ª12–15)

Aristotle argued that a ‘youth is not a suitable student of political science, of

which leadership is a branch’ (Aristotle, 1985: 1095a12–14), as youths have not
yet learned to deliberate and cannot possess sophrosuné (moderation, temper-
ance, self-control) that practical wisdom demands (Aristotle, 1985: 1140b8–22).
Drawing on Aristotelian wisdom, leaders need to have a healthy vision of self
which can only be forged in a combination of knowledge and experience. There
are no leaders without personality frailty or imperfection. A will to action marks
the leader — a willingness to enter the field of human inter-action where one
learns that pain gives rise to compassion; that correction is the author of wisdom;
that daring sharpens decision; that courage ennobles the spirit; and that in
seeds of doubt reside the flowers of faith (Kakabadse, 1991). Bennis (1984), for
example, asserts that leaders need to know themselves well. They must take
specific actions to learn about themselves through their experience, as there is no
greater teacher about self than responsibility.
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Praxis and concepts of wisdom

Fundamental pragmatists of life attribute wisdom to different traits contextually
defined. Some conceptualize wisdom as a body of expert knowledge about the
fundamental pragmatics of life, while others involve expectations about the
ontogenesis of wisdom (Baltes and Smith, 1990). Early research of ‘naive’ or
implicit conceptions of life-span development shows that the concepts of wisdom
and wise persons are firmly embedded in everyday language (Clyton and Birren,
1980; Sternberg, 1985a; Holliday and Chandler, 1986). Holliday and Chandler’s
(1986) research shows that the pragmatic conception of wisdom is perceived as
attributes of exceptional understanding (uses commonsense; has learned from
experience; sees things within larger context;) and attributes of judgement and
communication (aware; is source of good advice; understands life; thinks care-
fully before deciding; sees and considers all points of view). All these attributes
are held as necessary for contemporary leadership by the ‘New Age’ leadership
literature (Korac-Kakabadse and Kouzmin, 1997).
Although the concept of wisdom has a long history in western culture, in con-
nection with concepts in philosophy, religion and literature, it has only recently
become an interest in the psychological sciences. Clyton (1982) attempted to
explore the reference to wisdom in terms used by adults. Commonalties were
not impressive, as three factors accounted for only 19 percent of the common
variance. The meaning of wisdom has also attracted different attributes through
history. In ancient Greece, wisdom referred to an intellectual, moral and practical
life — a life lived in conformity with truth and beauty (Aristotle, 1985).
Christianity perceived it as a life lived in pursuit of a divine and absolute truth. In
contemporary times, wisdom is reduced to a scientific understanding of laws
governing matter and motion. More recently, wisdom is gaining renewal through
the literature of leadership spirituality. However, wisdom remains a complex con-
cept, because the individual may attribute different qualities of wisdom in rela-
tion to age, sex, social class and other demographically defined characteristics.
Wisdom, like concepts of power and leadership, is contextually defined.
Leadership literature sees wisdom application through inter-personal knowledge
and skills — making important decisions where one might have to negotiate age-
graded, history-graded and non-normative events; be in touch with one’s feelings,
needs and expectations; differentiate the needs of self from the expectations of
others and social convention; conduct adequate inter-personal relationships,
including the use of cooperative, tolerant models of conflict resolution; advise
others; be open to advice from others and weather the often difficult process
of change and development (Sternberg, 1985a, b; Holliday and Chandler, 1986;
Covey, 1989; Kramer, 1989a, b).
Schaie (1978) postulated that the cognitive functions most suitable to middle
and old age are those associated with the integration and application of already
acquired knowledge, in contrast to the acquisition of new knowledge, which is
appropriate to youth. Middle age, in particular, may be a time where this aspect of
wisdom is most operative, which is adaptive since it also serves the function of
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Korac-Kakabadse et al.: Leadership renewal 211

generative learning (double-loop learning) and might offset some of the dis-
illusionment that occurs in middle age with unfulfilled career and marital dreams
and fulfilled ones that did not bring expected promises (Aldous, 1978; Kramer,
1989a). According to Erikson (1968), the ageing individual evaluates his or her
life in order to provide meaning and continuity.

Leadership requirements: maturity, wisdom and trust

Bass (1985) suggests that transformational leaders require three characteristics:
charisma (ability to instil a sense of value, respect and pride and to articulate
vision); individual attention (attention to followers’ needs and assigning mean-
ingful projects so that followers grow personally); and intellectual stimulation (to
help followers re-think rational ways to examine a situation — to be creative).
Others have made similar arguments (Senge, 1992; Bennis, 1993), emphasizing
the need for skills such as a visionary focus; creative insights; commitment;
sensitivity; caring; empowerment and communication and, thus, explicitly or
implicitly, calling for leadership’s moral standing. To understand what consti-
tutes moral leadership, one must try to identify how moral authority or credibility
is achieved.
The literature suggests that, as a minimum requirement, a leader must believe
in a set of values and principles and must have a vision. Since every appeal for
ethical resolution of complex issues cannot be tried and tested against permanent-
ly established objective rules, interpreting values, interests and experiences is
essential to the craft of leadership, as is the need to reflect upon such values and
interests in a perpetual movement for acquisition of the ‘wisdom of humility’
(Eliot, 1943).
Leadership requires moral integrity — it involves wholeness, productivity,
ability and risk-taking. Leaders with integrity are admired not only for their
accomplishment and rationality but also for the wisdom they have gained from
the struggle to integrate theory and practice (Thomasma, 1993). To develop true
teamwork, the leader must be able to exchange sensitive information with groups,
listen and communicate (Kakabadse, 1991; Castonguay, 1993). Creating trust is
where all leadership wisdom begins (Kaplan, 1994). Trust is fundamental to any
lasting business success (Kakabadse, 1993).
Leaders can earn trust even from sceptics if they are willing to work at it a step
at a time, express honesty in their meaning, share their vision and deliver on it.
People need to get to know their leader. Key ingredients in developing trust
include patience, tolerance and openness (Kakabadse, 1991). The very essence of
trust building is to get fully immersed in complex organization, not only the
financial aspects but the human and physical aspects as well and to understand
these inter-actions (Kaplan, 1994). Kakabadse (1993) emphasizes that trust
comes about when people become convinced that the leader means what he or she
says by behaving the message. Similarly Drucker (1988) states that elders do not
necessarily earn trust by being liked or by always getting people to agree with
them, but by backing each statement with a record of consistency.
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212 International Review of Administrative Sciences 67(2)

Leaders require long-range planning capabilities (visioning, foresight); strate-

gic policy-making capabilities (judgement); high-quality generative learning;
and new ways of policy reasoning (social intelligence and empathy) sensitive to
‘formative contexts’ (Unger, 1987). In a globalized, dynamic environment, these
requirements are continually limited ‘by micro-issues dependent, in the main, on
economic rationality; lacking historical and comparative depth; ignoring psycho-
logical and communicative factors; and suffering from additional features such as
limited and simplistic notions of rationality’ which, in turn, makes policy and
planning in governance and communication contexts narrow (Dror, 1987: 92).

Leadership psychology, maturity and wisdom

Learning to lead is an investment in executives and their organizations. However,
becoming a leader is an on-going journey of self and team development. Leaders
develop psychological maturity as they work with diverse people under a variety
of demands and pressures in contemporary organizations (Selznick, 1957;
Kakabadse, 1991; Korac-Kakabadse and Korac-Kakabadse, 1996). However,
considerable empirical evidence suggests that no one is simply born knowing
how to develop an inspiring vision; to foster cooperative diversity; to communi-
cate effectively; and to manage feelings and emotions and the many other
psychological abilities needed to be an effective leader. Furthermore, formal
education is not sufficient to become a psychologically robust leader and experi-
ence along the way is not enough to learn to lead. Leaders need to develop
themselves, a process that is a life-long venture.
Leaders need to understand psychological ideas and be able to apply them
credibly (Kakabadse, 1991). They need to not only apply psychological ideas
correctly but also to reflect on experience and assess its consequences.
Psychology is an integral part of becoming and being a leader. Leadership is more
than a set of competencies of a performing art (De Pri, 1989). Leaders think
developmentally, weigh success and build upon small and big successes. They
also assess experiences of frustration and failure and learn from this assessment.
Leadership, in essence, is nurturing and development, both of which require
deep psychological insights. By its nature, nurturing calls for leaders’ evaluations
and selections, as they act upon ideas about what motivates people and how
people plan to achieve ambitions, what is effective and what is not and how feel-
ings should be expressed. Development involves challenging old work practices,
values and beliefs and developing new ones (Kakabadse, 1991; Korac-Kakabadse
and Korac-Kakabadse, 1996). Thus, social understanding is critical for coping
with stress and individual well-being and tapping into people’s motives in order
to build commitment and relationships. Leaders need maturity and wisdom as
well as will for action. The five crucial operational parameters in organization —
power, diversity, indeterminacy, negotiation and multiple voices — all require
leaders to understand the psycho-dynamics in an organization and to apply
wisdom and will in a mature manner.
Fitzgerald (1950) wrote in The Great Gatsby that the test of first-rate intelli-
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Korac-Kakabadse et al.: Leadership renewal 213

gence is the ability to hold two opposing ideas in mind and still have the ability to
function. In the increasingly complex and globalized market society, balancing
multiple perspectives and demands that are increasingly incompatible is becom-
ing the norm for leaders and, even, for other actors. Managing paradoxes requires
leaders not only with first-rate intelligence but the wisdom and maturity of the
oracles (Korac-Kakabadse et al., 1996). Pragmatically, wise leaders insightfully
grasp the action particular situations call for. Such a leader is able to mediate
abstract principles and the particular demands of real-life situations (Owens,
1951).
Wisdom is conceptualized as the personal philosophy (perspective on life),
sense of balance and understanding of the complexities of inter-actions within a
landscape (Korac-Kakabadse et al., 1996). Wisdom embraces judgement, dis-
cernment, intuition and comprehension in an integrated wholeness, where every
step of the decision calculus needs to be complemented by emotions in order to
assign values to differing possibilities within competing and, more often than
not, paradoxical demands (Goleman, 1996). While strong feelings and use of
emotions can create havoc in reasoning, the lack of awareness of feeling and
reliance only on the ‘formal logic’ can also be ruinous, especially with regard to
such matters as creating and defining value systems for one’s constituency. As
the leader’s decisions often create and almost always impact on existing values,
they cannot be made on sheer ‘rationale’. They require a ‘gut feeling’ (intuition)
and the emotional wisdom gathered through past experiences and evaluated in the
present context (Kakabadse, 1993; Goleman, 1996: 53). The emotional side of
leadership was recognized by Barnard (1938: 235) who argued that the executive
function, which is the basis of functional specializations in organizations, has
no separate concrete existence; rather, more appropriate aspects to executive
functioning ‘are “feeling”; “judgement”; “sense”; “proportion’; “balance”; and
“appropriateness”. It is a matter of art rather than science and is aesthetic rather
than logical’.
For example, empirical data gathered from trait research suggests that the
premise that leadership requires intelligence (verbal and mathematical-logical
alacrity) accounts for only 6 percent of the difference between effective and
ineffective leaders (Ghiselli, 1966, 1973). Personality profiles of effective leaders
account for less than 10 percent of the difference between effective and in-
effective leadership (Korman, 1968). Leadership is not based on being just
‘clever’ (IQ measure) but rather on wisdom (being socially intelligent, having
vision and being perceived as constant). The leader needs a sense of self-mastery,
of being able to withstand the emotional storms that an ever-changing landscape
brings, rather than being ‘passion’s slave’ (Goleman, 1996). This is the same
quality of self-mastery that has been praised as a virtue since the time of Plato.
The Greek word, sophrosyne, care and intelligence in conducting one’s life (a
tempered balance and wisdom), has been sought through Romans who called it
temperantia and the early Christian church which called it temperance. Currently,
it is called the restraining of emotional excess.
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214 International Review of Administrative Sciences 67(2)

The goal is to balance one’s emotions, not emotional suppression — as feel-

ings have value and significance. Aristotle (1985) observed that life without
passion is a dull wasteland of neutrality. He (1985) also said that what is needed
is appropriate emotion; feelings appropriate to circumstance. When emotions are
too muted they create dullness and distance. On the other hand, when out of
control, too extreme and persistent, they become pathological. Aristotle’s (1985)
philosophical enquiry into virtue, character and the good life sees the challenge in
managing one’s emotional life with intelligence. The problem is not with human
emotionality but with the appropriateness of emotion and its expression.
Successful leaders understand that others (within and outside their constitu-
ency) may have quite different perspectives from their own and they learn to
accept, manage and negotiate difference. Successful leaders have insights, ‘emo-
tional intelligence’, into philosophical differences. They understand such sensi-
tivities and have the wisdom to negotiate them successfully. Insight is particularly
important when it comes to influencing others. Goleman (1996: 36) defines
insight as ‘emotional intelligence’ or aptitude that requires a unique set of compe-
tencies as a meta-ability determining how well a person can use whatever other
skills s/he has, including intellect (iq measure). Similarly, Thorndike (1927)
argued that one aspect of emotional intelligence is ‘social intelligence’ or the
ability to understand others and to act wisely in inter-actions — that emotional
intelligence is, in itself, an aspect of a personal iq.
Castonguay (1993) asserts that judgement, wisdom, sensitivity and imagina-
tion are all elements that influence a leader’s ability to lead and that they are all of
equal importance. To influence others and negotiate sensitive issues successfully,
leaders need to understand the ‘world’ of their constituency, of potential allies as
well as foes (Covey, 1989; Cohen and Bradford, 1990; Kakabadse, 1991; Pfeffer,
1992). Without awareness of what others need or what principles they value,
attempts to influence others can be haphazard and, only occasionally, partly,
successful. Emotional intelligence is also important in a broader sense, in order to
understand changes between an organization and the outside world (client
needs, suppliers, power relationships) (Kakabadse, 1991). Managing inter-
organizational linkages, ‘boundary management’, plays an increasingly impor-
tant leadership role (Kanter, 1992) in the ability to create and maintain effective,
widely based systems of resources that work to the mutual benefit of oneself and
others (Byrum-Robinson and Womeldorff, 1990). Furthermore, in any negotia-
tion exercise, it is helpful to know what the net (dis)advantages are from the point
of view of the other party if negotiations are to be conducted for the benefit of
both parties and for building long and lasting relationships.
Moreover, leaders need maturity in order to enter into open, honest and ego-
less negotiation with others. Maturity is conceptualized as the balance between
courage, robustness and consideration (Kakabadse, 1993). If the leader can
express his/her feelings and convictions with courage, balanced with considera-
tion for the feelings and convictions of another person, s/he shows a high level of
maturity, particularly if the issue is very sensitive and important to both parities
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(Covey, 1989; Kakabadse, 1991, 1993). The leadership context is bounded with
contradictory forces that are to be appreciated, pondered and negotiated.
The perceived proficiency (wisdom) of interpreting and managing sensitive
relationships underpins leadership, image, popularity and inter-personal
effectiveness. However, in order to define meanings for others, leaders, first,
need to define meanings for themselves and understand their own philosophy on
which these values are based (Bogue, 1994). Knowing one’s own emotions (self-
awareness/mindfulness, recognizing a feeling as it happens); managing emotions
(handling feelings so they are appropriate); motivating oneself (marshalling
emotions in the evincing of a goal); recognizing emotions in others (empathy);
and handling relationships (managing emotions in others) form emotional
elegance and maturity (Gardener, 1993a, b; Goleman, 1996), which, synergized
with one’s own experience, holistically, forms personal wisdom. Notwith-
standing that leaders are influenced by external stimuli, whether physical, social
or psychological, successful leaders choose to be driven by values, carefully
thought out, selected and internalized, so that their response to the stimuli
becomes a value-based choice or response (Covey, 1989).

Leadership intelligence and wisdom

Gardener (1993a, b) postulated that there is a wide spectrum of intelligence,
with seven key varieties: verbal alacrity; mathematical-logical alacrity; spatial
capacity; the kinestethic genius (displayed by physical fluidity and grace);
musical gifts; inter-personal skills; and ‘intra-psychic’ capacity. Gardener
(1993a, b) terms inter-personal skills and ‘intra-psychic’ capacity as ‘personal
intelligence’. Personal intelligence is further subdivided into two categories,
inter-personal and intra-personal intelligence. Inter-personal intelligence or
insight is conceptualized as the ability to understand others: what motivates them
to work and how to work effectively with them in a cooperative fashion. It is a
correlative ability, turned inwards — a capacity to form an accurate, veridical
model of oneself and to be able to use that model to operate effectively in life
(Gardener, 1993a, b).
The core of inter-personal intelligence includes the capacity to discern and
respond appropriately to the moods, temperaments, motives and desires of other
people. In intra-personal intelligence, the key to self-knowledge includes access
to one’s own feelings and the ability to discriminate among them and draw upon
them to guide behaviour (Gardener and Hatch, 1989). Gardener and Hatch (1989)
identify four core competencies that define social intelligence: ability to organize
groups (initiating and coordinating efforts of a network of people); negotiating
skills (mediating, preventing conflicts or resolving those that flare up); ability to
personally connect with others (empathy and connection, the art of relationships,
the ability to enter into an encounter or to recognize and respond fittingly to
people’s feelings and concerns); and an ability for social analysis (being able to
detect and have insights about people’s feelings, motives and concerns).
Self-awareness is conceptualized as an awareness of thought process (meta-
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216 International Review of Administrative Sciences 67(2)

cognition) and awareness of one’s own emotions (meta-mood) or being simulta-

neously aware of both mood and thoughts (Goleman, 1996: 47). Self-awareness,
or the ability to think about one’s own very thought process (Covey, 1989), can
be of three distinct styles: self-aware (aware of moods as experienced); engulfed
(feel swamped by emotions and being helpless to escape them) or accepting
(clear about feelings, accepting them and not trying to change them, being
positive or negative). Self-awareness enables the individual to stand apart and
examine even how one sees oneself, one’s attitudes and behaviour as well as how
one sees other actors. In addition to self-awareness, the actor has imagination, the
ability to create constructions beyond one’s immediate reality. One’s conscience
is a deep, inner awareness of the principles that govern one’s behaviour and a
sense of the degree to which one’s thoughts and actions are in harmony with
them. Independence is the ability to act based on one’s self-awareness, free of
other influences (Covey, 1989). Through human endowments of self-awareness
and conscience, one becomes conscious of areas of talent that could be developed
and areas that need to be changed. Self-aware leaders are able to examine the
deepest assumptions upon which their values are based. Effective inter-personal
leadership requires the vision, proactive initiative and the security, guidance,
wisdom and power that come from self-awareness (Clyton, 1982; Covey, 1989;
Goleman, 1996).
Bennis (1993) describes several leadership competence ‘clusters’: social–
emotional maturity (self-control; spontaneity; perceptual objectivity; accurate
self-abasement; stamina; adaptability); entrepreneurial abilities (efficiency and
productivity); intellectual ability (logical thought; conceptual ability; the diagnos-
tic use of ideas and memory); and inter-personal abilities (self-presentation;
interest in the development of others; concern with impact; oral communication
skills; the use of socialized power; concern for relationships). He argues that these
clusters do not hold any attributes that would give sex roles an edge. Similarly,
Yavitz (quoted in Bennis, 1993: 99) asserts that ‘high sense of responsibility and
commitment, ability to cope with ambiguity, a continuing sense of curiosity and
willingness to learn are critical attributes for the successful manager’. Although to
Bennis (1993) the competency cluster is generic, it places a high value on verbal
intelligence. However, some scholars have argued (Sadler, 1994; Goleman, 1996;
Korac-Kakabadse and Kouzmin, 1997, 1999) that with continued market global-
ization, there is an emerging need to audit and expand this cluster to include other
mental abilities (numerical and spatial) that have tended to be relatively neglected
in the past, together with creativity and social intelligence.

Leadership wisdom through the quality of dialogue

Leadership is not domination, but the art of persuading people to work towards a
common goal (Goleman, 1996: 149). While real communication requires
dialogue among the different stakeholders, sadly, leadership ‘communication’
too often translates into a unilateral directive (Kanter et al., 1992). By allowing
different ‘voices’ to express themselves and to be listened to (contributing
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Korac-Kakabadse et al.: Leadership renewal 217

ideas, reactions, concerns, questioning underlying assumptions and overcoming

defensive routines), leaders can respond to the concerns, resistance and feedback
from all levels of organization (Kanter et al., 1992: 388). They can also gain
a broader understanding of what the change means to different parts of the
organization and how it will affect them. However, in order to gain a deeper
understanding through effective inter-personal and leadership communication,
the communication needs to be based on the empathic communication principle
(Covey, 1989) — that is, seek first to understand, then to be understood.
Empathic communication requires that the listener get inside another person’s
frame of reference, understands his/her philosophy and understands how s/he
feels. It requires listening for feeling, meaning and behaviour using the right and
left brain abilities of sensing, intuiting and feeling (Covey, 1989). Empathic
listening offers a wealth of data to work with and to evaluate options. A wide
range of visual and verbal cues which, in a negotiation, transmit valuable, even
critical, task information regarding negotiator priorities and preferences, leads to
inadequately clarified negotiator perceptions (Korac-Kakabadse and Kouzmin,
1997) and, as such, may lead to serious blockages in communication.
People respond to body language 55 percent of the time, tone of voice 38
percent of the time and actual words a mere 7 percent (Covey, 1989). Thus, the
lack of an effective factor of communication may be detrimental to the extent that
it is more difficult and time-consuming to convey simple, yet relevant, informa-
tion — such as acceptance/rejection, acknowledgement/non-acknowledgement,
delight/frustration — leaving a number of issues unaddressed and, as such,
increasing organizational vulnerability to latent crises.
Since the concept of risk (mathematical representations of the probability of
undesirable physical consequences) has a different meaning in different contexts
(cultural, knowledge, stakeholders) and because communication occurs in differ-
ent forms, leaders must take into account the knowledge and experience of the
audience they address, as well as the formative context. Some scholars (Pearson
and Mitroff, 1993; Garnett and Kouzmin, 1999) have argued that, more often than
not, a crisis situation is, to a large extent, an information and communication
crisis, as the ‘crisis-prone organizations tend to miss or ignore signals indicating
potential weakness in operations or structure’ (Pearson and Mitroff, 1993: 22). In
some cases, crises-prone organizations even exert considerable effort in blocking
warning signals.
Vulnerable, innovating or changing organizations (Baker, 1992) need to ensure
high-quality dialogue among senior executives and with other organizational
actors (Kakabadse, 1991). For the participant in dialogue to be challenged
and perhaps disabused of assumptions, individuals need to move toward an
understanding of truth as a process in which the actor comes to see individual
responsibility for the shaping of human affairs and, thus, the possibility of
genuinely new and effective leadership action. An international study of manage-
ment competencies indicates that when quality of dialogue is high and the
relationship among senior management is positive, issues and concerns facing
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218 International Review of Administrative Sciences 67(2)

organizations tend to be more openly addressed (Kakabadse, 1991). In organiza-

tions where relationships are tense and the quality of dialogue restricted, certain
issues and problems tend not to be raised, because to do so would generate
unacceptable levels of discomfort among certain, or all, members of the senior
executive (Kakabadse, 1991). In this context, dialogue encompasses knowledge
transfer through the content of conversations concerning the present and the
future of the organization, as well as external developments which might affect
the organization and the views and responses of actors and groups within that
organization (Kakabadse, 1991).
Audits of how issues are addressed or ‘unaddressed’ by senior management
are crucial to quality leadership. Although research evidence suggests that high-
quality dialogue is not easy to attain (Kakabadse, 1991), its importance cannot
be over-estimated. Uninformed organizations that are overly sensitive to ‘other-
oriented’ managerialist actions are vulnerable to threats from the outside and
missed opportunities within (Barnard, 1938; Selznick, 1957; Peres, 1968; Wick
and Leon, 1995). In learning organizations, information flows with speed and
honesty between all organizational actors. Openness is the lynchpin of an
organization’s ability to scan and position itself in market and political space. By
equalizing the power between leader and followers, leaders are often able to
gather information about what really is going on instead of what they hope might
be going on in organizations (Korac-Kakabadse and Kouzmin, 1997, 1999).
Learning organizations structure themselves and utilize information technology
(it) in a way that speeds the flow of internal information. They create cultural
norms that place a high value on honesty, even in the face of difficulties. Instead
of covering up problems, learning organizations make problems visible in order
to encourage participation in finding solutions quickly (Wick and Leon, 1995).

Wisdom of dialogue: a leadership tool for change and organizational

learning
The quality of the dialogue encompasses the extent to which sensitivities within
the group inhibit the discussion of key organizational concerns affecting the
future of the organization and, in turn, how likely this is to affect the extent to
which the group members hold a shared view of the future direction of the
organization (Myers et al., 1995). Depth refers to the level of sensitivity displayed
concerning the difficult issues discussed, despite differences that may exist in
the views of individual members — possibly affecting their relationships which
may, in turn, negatively influence their openness of conversation concerning the
organization (Myers et al., 1995). The breadth of dialogue refers to the variety of
issues (internal and external to the focal organization) which are discussed.
Organizations need to ensure the existence of a high-quality dialogue among and
between both senior management and other organizational actors (Kakabadse,
1991).
Successful communication occurs around messages which resonate with the
participant’s hopes and beliefs. Empirical studies show that some of the best
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Korac-Kakabadse et al.: Leadership renewal 219

communicators spend about 40 percent of their time in face-to-face encounters,

only because they do not have more time to give (Rice and Aydin, 1991).
Feedback is instrumental for individual development, performance improvement
and development of trust — an essential social ingredient for development of
robust and quality dialogue. Irrespective of how an actor is developed, feedback
is required to help an individual be more responsive to addressing contingencies
within the organizational context (Levinson, 1992; Kakabadse and Myers,
1995a, b), enabling the actor to negotiate and share understanding of the context
and, thus, through learning, transcend ‘cognitive failures’ and ‘soft-core’ crises
(Korac-Boisvert and Kouzmin, 1994). Levinson (1992) defines the art of
effective feedback (critique and praise) as consisting of specificity (a significant
incident that illustrates occurrence); offering a solution; face-to-face contact; and
sensitivity. Empathy calls for being attuned to the impact of what one says
and how one says it on the person at the receiving end. Leaders who have little
empathy are most prone to giving feedback in a harmful fashion, such as a
withering put-down (Goleman, 1996). The effect of non-empathic feedback is
destructive — rather than opening the way or being used as a corrective, it creates
an emotional backlash of resentment, bitterness, defensiveness and distance
(Levinson, 1992). In learning organizations, information flows with speed and
honesty between all organizational actors. Thus, openness is a lynchpin of an
organization’s ability to scan and position itself in the market place. Drucker
(1988) contended that new, ‘leaner’ and ‘flatter’ organizations operate as a
symphony orchestra, where performers with different skills concentrate on per-
fecting their professional competence, while a single leader acts as conductor
coordinating the overall performance. Performers with similar specialities form
self-managed work teams, operating without a bureaucratic hierarchy.

Leadership and the changing psychological contract

In today’s ‘resilient organizations’, those that maintain adaptive functioning in
spite of experienced risk or stress prevail, but the psychological contract is in
dramatic flux. A critical dimension of employee–employer inter-action is a
psychological contract representing the implicit exchange between the parties of
such factors as social support, promotion prospects and job satisfaction in return
for, perhaps, organizational commitment and organizational socialization. The
psychological contract needs to be re-negotiated in times of change, where
the quality of resilience within organizations is facilitated by re-negotiation.
Organizational culture, relationships, reality sense, attitude to change, differentia-
tion, diversity and communication all have implications for a changing
psychological contract. Most considerations of the contract suggest that it is bi-
directional, encompassing both transactional and emotional elements, and that
each contract must be unique (Robinson et al., 1994; Waterman et al., 1994).
However, a common element is likely to be an understanding that organizations
will offer some measure of job security in exchange for high performance and
some degree of loyalty.
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220 International Review of Administrative Sciences 67(2)

Current realities of organizational life are such that executives and employees
can no longer count on job security, even if they do their jobs well and are loyal to
their organizations. The traditional psychological contract that focuses on
employment is no longer appropriate and executives focus on the psychological
contract of ‘employability’ or the development of competitive skills and compe-
tencies needed to find work when individuals need it (Frost and Rowley, 1994).
One aspect of the relational dimension of the new psychological contract is the
dimension of ‘career resilience’ or continuous employability (Waterman et al.,
1994). This describes a psychological contract that offers an individual the tools
to an open environment and the opportunities for assessing and developing skills
and competencies. In return, executives and employees accept responsibility for,
and have loyalty to, their own careers and offer the organization an adaptable and
responsive skill base and commitment to organizational success. However, the
transition to new loyalties may be a psychologically painful process, requiring
insight, vision, maturity and wisdom (Korac-Kakabadse and Korac-Kakabadse,
1996).
One aspect of the new psychological contract is an acceptance by both
employee and employer that their employment relationship will terminate when a
‘win–win’ relationship is no longer possible. Within this context of career
resilience, the traditional expectations of loyalty and security are absent from the
psychological contract and, thus, the risk of anti-role behaviours, following
threats to job security — a major feature of economic life in the present climate
— are minimized. In respect to operational parameters, economic downturns,
changing management practices, proliferation of information technology and
globalizaton of capital may induce a critical re-evaluation of an employment
relationship (Korac-Kakabadse et al., 1998).
Research on violation of psychological contracts (Robinson et al., 1994)
indicates that violations or perceived violations are negatively related to trust,
organizational citizenship behaviour, relational obligations, employee with-
drawal behaviour and stress. The perceived violation of psychological contracts
may have profound implications for individuals and organizations, as the contract
becomes more transactional following violation. This induces more formal
socio-emotional aspects of work, involving less benevolent or role-enhancing
behaviour and an emphasis on the pecuniary aspects of the job. Leading organiza-
tions in this context require very wise and mature leaders.

Wisdom of leadership visioning

Contemporary writings on leadership, especially on transformational leadership,
hold that leaders must have a vision (Tichy and Devanna, 1986; Senge, 1990;
Fairholm, 1991; Rhinesmith, 1993). They must be forward looking and have a
clear sense of the direction they want to take organizations. A vision has been
defined as a ‘pre-analytical cognitive act’ (Schumpeter, 1942: 41), or ‘the sense
or feeling of an individual prior to the construction of a theory’ (Sowell, 1987:
14). It constitutes the sensing by an individual of how a system or organization
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Korac-Kakabadse et al.: Leadership renewal 221

works. It has been forcefully argued (Sowel, 1987) that visions play an important
role both in developing initial insights on which theory develops and in influenc-
ing the ultimate choices that are made by individuals among the alternative
theories and options that evolve. The role of alternative visions is particularly
apparent in theories of social choice.
The basic difference between mission and vision is that a mission speaks to the
purpose of the organization and a vision describes what the organization will look
like in achieving its mission (Rhinesmith, 1993). A vision is not a set of goals, but
a set of ambitions that, once internalized by organizational actors, create powerful
intrinsic motivation to work in that direction (Javidon, 1991). A vision expresses
optimism and hope about possibilities and desired futures. In a way, vision acts as
a clearing agent in that, in the world of dense conflicting interpretations, it clears
openings for opportunity (Heidegger, 1977). Vision usually involves matters of
structure, authority and resources, all of which involve power, status and personal
ambitions. However, in order to motivate staff, a vision needs to challenge
organizational actors; a vision which is easily attainable is unlikely to motivate
(Covey, 1989). For example, for Senge (1990), vision is about ‘creative tension’
which comes from the gap between seeing clearly where one wants to be or,
‘vision’, and telling the truth about one’s ‘current reality’. Senge (1990) argues
that learning how to use ‘creative tension’ helps individuals and organizations to
move more reliably towards their vision. Notwithstanding that a vision is unique,
it lends itself to visual imagery, implies some kind of ideal and implicitly
involves choice.
Forming a vision is a complex process involving sophisticated visioning and,
equally, sophisticated negotiations with all the stakeholders who need to assist in
achieving the vision (Rhinesmith, 1993: 91). Visioning, on the other hand, is a
process of introspective analysis, during which time one may put aside reason and
may look beyond the past and present to the future — as one would like it to be.
Javidon (1991) argues that visioning depends on the understanding existing in
organizational realities (culture, history) and developing a clear sense of direction
for the organization. Techniques such as remembering and letting go of past
experience has been reported as helpful for actors to feel free to vision, as well as
other visioning techniques (sensory awareness, guided imagery) (Simpson,
1990). Once the vision has been created (exclusively by the leader or in consulta-
tion), it is necessary for the creator(s) to spend some time on the present. Again,
creator(s) need to have a clear, non-judgemental awareness of the current
situation before they feel confident to begin bringing their vision into reality or
testing out their ideas. Many have argued that the refinement and development of
successfully implemented vision is more likely to involve informal executive
consultation and reality testing with key stakeholders (Senge, 1990).
Five attributes emerge in the literature (Kakabadse, 1991, 1993; Kelley, 1992)
as necessary for successful communication of vision that induces actors’ commit-
ment based on shared vision and ownership and the inner motivation or passion
stemming from involvement in organizational achievements. These attributes are
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222 International Review of Administrative Sciences 67(2)

clarity of the message (clarity about vision statements and the values from which
these derive); complementary (how and to what extent the vision will benefit
the people affected); use of language (use of meaningful metaphors that unite
stakeholders in a way that allows them to see the visions as if they were real);
credibility (leader’s personal commitment to the vision must be credible); and
leading by example (leaders should set an example to others by behaving in ways
which are consistent with their stated values — ‘walking the vision’).
The significance of communicating visions, emphasized in the transforma-
tional leadership thesis, is that it expresses the moral experience of the leaders
and serves to support their vision or ideology by establishing authority and
identity, as well as inspiring follower commitment. In this sense, vision or
ideology supports socioeconomic norms through emergent institutionalized
arrangements linking organizational heroes (leaders) with other actors (Zaleznik,
1977; Bennis, 1984). The institutionalization of a leader’s ideology or vision is
critical for organizational transformation, as exemplified by historical leaders
such as Lincoln, Lenin, Roosevelt and Gandhi — all ideological leaders linked to
particular modes of radical reform. Organizational re-invention, re-engineering,
downsizing and transformational ideology have value justification in much the
same way other ideologies justify socioeconomic designs (Kouzmin and Korac-
Kakabadse, 1997; Kouzmin et al., 1997).

Leadership wisdom through empowerment

Through vision, leaders build socio-psychological contracts with followers that
allow them to lead voluntarily towards common action, whether or not they are
present to oversee the behaviour of followers (Fairholm, 1991). At the same time,
vision enlists followers’ commitment based on the shared ownership of the vision
and empowers them to work towards achievement of that shared vision (Manz
and Sims, 1991; Senge, 1992). The empowerment is based on the premise that the
employee should be provided with various opportunities to develop and maintain
a sense of self-control, competence and purpose (Conger, 1989a, b, 1993). For
Bennis (1993), empowerment is not only self-control and self-determination
but also the sense that people are at the centre of something rather than at the
periphery. He argues that essential to competitive advantage is a leader’s ability
to create an environment which empowers, encourages innovation and risk-
taking and, as such, generates intellectual capital.
Javidon (1991) holds that successful executives empower employees by help-
ing with the development of a sense of ownership (through role and feedback);
self-confidence (through training and development); taking responsibility
(encouraging expression of views and concerns); support (resources — emotional
and intellectual); and reward (recognizing accomplishments). However, empow-
ering and enabling others involves providing resources for achievement of goals
and endorsing the efforts of others in pursuit of vision (Kanter, 1977). Leaders
need to ensure that followers have the necessary resources and training to achieve
the vision of their organization. Furthermore, it is the leader’s responsibility to
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Korac-Kakabadse et al.: Leadership renewal 223

ensure that adequate parameters and measurement activities are evident within
the organization.
Inclusion of heterogeneous members is essential, as people who differ in
background, experience, opinions, outlooks and organizational position are likely
to disagree. Independent thinkers and people outside the organization are more
likely to make controversy, structuring their opposing views so that they are
not rigidly fixed and they feel included in the leader’s domain. Diversity, not
uniformity, is a basic human condition. Valuing diversity not only recognizes
the reality of complex differences, but it also promotes achievement (Korac-
Kakabadse and Kouzmin, 1999). Teams are potentially powerful task accom-
plishers because they bring together the diverse perspectives and skills needed to
get the job done. To work with others, one must know, appreciate and respect self
and others and manage conflict.

Conclusion
Kanter (1992) argues that despite the importance of leadership and empowerment
strategies, organizations still have to solve the problem of control (Kouzmin,
1980a, b, 1983): how to get guidance and coherence in light of complex activities,
diverse people and the need for speed and innovation. Since rules cannot cover all
contingencies, it is necessary for an organization to have a set of generally held
values and a culture which enables employees to make decisions in a coherent
way, supportive of the overall strategic purpose of the organization. Cultural
control involves influencing employees to act in a particular manner and to focus
on particular outcomes (Korac-Kakabadse et al., 1999).
Nadler and Tushman (1990) highlight that not all actors can be motivated
through a passion to be involved in enterprise achievements. They suggest
‘instrumental leadership’ which relies on more traditional methods of motivation
through rewards (Barnard, 1938). Many (Nadlar and Tushman, 1990; Kakabadse,
1991; Senge, 1992) emphasize that leaders should pioneer behaviour that reflects
key organizational values but that there is a need for an explicit statement of what
is expected from followers, providing feedback on their performance and rewards
related to meeting agreed standards. However, explicit details of change are more
likely to be achievable in incremental change rather than in transformational
change.
In the ‘information society’, where the new organizational forms of networks,
‘enterprise webs’, are becoming the norm (Reich, 1991), with 30 percent of
the workforce employed in symbolic-analyst services, empowerment becomes
problematic but imperative. Symbolic analysts, which includes all problem-
solving, problem identification and strategic brokerage (research scientist,
public relations executives, investment bankers, lawyers, and consultants, among
others), have partners and associates rather than supervisors and bosses (Reich,
1991). Symbolic analysts ‘simplify reality into abstract images that can be
re-arranged, juggled, experimented with, communicated to other specialists and
then, eventually, transformed back into reality’ (Reich, 1991: 180). Multiple,
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224 International Review of Administrative Sciences 67(2)

and increasingly virtual, realities in an information society in which organiza-

tional networks are temporally and geographically rendered both distant and
simultaneous, will provide an increasingly vexing milieu for the leadership
renewal project, much abused within current managerialist praxis.

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