The Need for Wise Leadership in Start-ups
An introduction to Wise Leadership
Co-authored by Dr Elizabeth King and Kenneth von Rausch for RedPepper Mergers and GreenPepper Capital
Rudyard Kipling’s poem “If’, was written as advice to his son in 1895. But it also captures the challenge faced by start-ups, where leaders can be challenged when growth aspirations and constrained budget cause contradictory pressures.
Allowing for the context and the time (1895) the poem outlines a framework for how to survive through life with purpose, integrity, self-respect and behaviour that is embedded in values.
If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or, being lied about, don’t deal in lies,
Or, being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise;
If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim;
If you can meet with triumph and disaster
And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to broken,
And stoop and build ’em up with worn out tools;
_____________
Leading to the poem’s final words….
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!
Kipling’s words are powerful, and while they are a father’s words to his son in the social context of the 19th century, they still voice some universal truths for those who aspire to play an active part in creating a better world. At the core of this plea is what it means to be a “contributing citizen”. His words remind us of the need for all start-up leaders, be they founders, change-enabling investors or expert advisors, to have a set of guiding principles – in essence a group ‘North Star’.
It is increasingly accepted that we cannot continue to lead as we have in the last decades. We must change how we lead and how we make our decisions to guide our leadership approach. It is recognised that there are 7 levers for effecting change (towards a more sustainable world and ESG led business strategy), these being
• Policy and regulation
• Finance enablement *
• Technology advances and solutions *
• Trade and commerce *
• Capacity building *
• Data utilisation for continuous improvement and decision making #
• Partnerships *
The partnering of early-stage innovators and enabling financiers, flexes 5* of these 7 levers. However, critically, start-ups often do not have data (#) to support decision making. These entrfepreneurial leaders are often called on to lend materiality to intention purely based on concepts and without the data-led governance frameworks that guide corporates. Therefore, in these potentially impactful yet resource-constrained start-ups, more than in those at any other stage of business maturity, we see the importance of wise leadership.
RedPepper Mergers believes in the need for Wise Leadership to make complex decisions in early-stage business. That is why we foster “contributing citizens” through incubating Tech-for-Sustainability innovation.
We recognize the paradigm created by the evolutionary need for more sustainable lifestyles even while we demand product convenience, equitable social treatment and environmental regeneration. In this paradigm, RedPepper Mergers finds our commercial and wise leadership challenge.
And in supporting the Tech-for-Sustainability leaders, aligned with our Theory of Change Index, who respond to this commercial challenge, we have a common ‘North Star’. We call this our Impact Management Plan. It is focused on managing change that is measured by impact metrics in support the United Nations 17 Sustainability Development Goals (17SDGs).
We challenge you to relate the merit of wise leadership to your life and workplace and consider how much better your workplace would feel and perform (especially financially) if it was used for decision-making.
Keep reading to discover why wise leadership returns higher profits and de-risks business. Doesn’t that sound wonderfully logical?
Commercial Synopsis
Wise Leadership unpacked
We live in an era that is confounded by long-unaddressed global challenges and the need to rise to them is urgent. More knowledge (and much behavioural change) is essential if we are to find holistic solutions, but that will not be achieved without wise leadership. The complex decision-making demanded through the COVID–19 pandemic and ongoing environmental debate has exacerbated existing fault lines in social and economic inequality and social division. With the added failure of some political and corporate leadership, there is no doubt that wiser decisions from individual leaders and the groups in which they work are needed. For Sternberg et al., (2019), the answer lies in what we may term ‘practical wisdom’ – that is wisdom that is expressed in positive behaviours and decisions that avoid destructive outcomes.
Wise decisions are ethical and virtuous. At the same time, they achieve the objectives of individuals, businesses and organizations. Globally, boards of directors are facing unprecedented internal and external pressures (Paine, 2020) which make wise decision-making crucial. Yet leadership failures continue. We see daily headlines that display breathtaking ethical, legal, governance and professional failures of judgement. Recent local examples include the casino group Crown, insurers AMP and QBE, and the global mining company Rio Tinto. Further, the more senior and influential the leadership group, the more damage and loss of community trust is caused when it fails the basic tests of integrity, decency and consideration of the impact of decisions on people and communities.
This leads us to the key question of how we might better equip our leaders, directors and organisations to address the challenges of our time. However, there seems to inadequate understanding as to how a group can, in practical terms, leverage the individual wisdom of its members to facilitate wise, collective decisions.
Academics and leaders are increasingly debating how the understanding and insights we have about wisdom might be transformed into wise behaviour in daily practice. The question is still largely addressed at an individual level, but the good news is that over the last decade modern models of wisdom development have emerged. Models such as the MORE model of life experience (Gluck & Buck, 2013), modern reviews of ancient ideas (Ardelt, 2004) and the approach of Sternberg and his team to practical intelligence (2000) explain how to translate experience to wisdom in practical terms. These models can also be extended to the analysis and development of collective wisdom by identifying it in practice through observable processes. This allows it to be monitored, measured and reported – key practices in commercial success.
Once that task is in hand, we can craft tools to achieve positive and impactful change. Kipling tried to provide his son with a yardstick by which he could measure his actions. At a start-up level, when the question is how to enhance the ability of a founder to use the wisdom of the company’s advisers to promote wise decision-making, the answer lies in cultivating observable processes to identify and address any collective knowledge-action gaps.
Kipling’s poem outlined a framework to guide the young man. Our team is working on a contemporary approach to the development, implementation, and evaluation of interventions to support improved decision-making and practical wisdom in business. The approach builds on previous work that identifies a research-based definition, a competency matrix that describes the desired behaviours, and a development process to cultivate such outcomes (King and Badham, 2018, 2020; King, Norbury and Rooney, 2021). For a detailed read please download Dr Elizabeth King’s article ‘Coaching for Leadership Wisdom’.
If you need more reason to take these propositions seriously and to understand the alternative, let us turn to a contemporary warning from Otto Scharmer, who comments on the blind spot of leadership and famously states, “We are collectively creating results nobody wants”.
Wisdom is the pathway to better governance and the solution to many of our world’s sustainability challenges. The good news is that by practicing wise leadership we can prove we create a purpose-led business ethos with more sustainable triple bottom line metrics, de-risking business while solving the 6 categories of UN sustainable development goals (link).
Please contact us on vision@redpeppermergers.com if you have questions, would like further reading, or want to engage us to coach on wisdom in your 1-or-more-person leadership group.
Academic Sources
All GreenPepper Capital articles are based on empirical evidence and factual sources. We welcome professional commentary.
Further Reading:
1. Ardelt, M. 2004. Wisdom as expert knowledge system: A critical review of a contemporary operationalization of an ancient concept. Human Development, 47: 257-285
2. Glück, J., & Bluck, S. (2013). The MORE life experience model: A theory of the development of personal wisdom. In The scientific study of personal wisdom (pp. 75-97). Springer, Dordrecht.
3. King, E., & Badham, R.(2018). Leadership in Uncertainty: The mindfulness solution. Organisational Dynamics
4. King, E., & Badham, R. (2020). The wheel of mindfulness: A generative framework for second-generation mindful Leadership. Mindfulness, 11(1), 166-176.
5. King, E., Norbury, K., & Rooney, D. (2020). Coaching for leadership wisdom. Organizational Dynamics, 100815.
6. Kipling, R. (1895) If. https://www.poetryfoundation.org/poems/46473/if— Downloaded March 9, 2022
7. Paine, L. S. (2020). Covid-19 is rewriting the rules of corporate governance. Harvard Business Review, 6.
8. Scharmer, C. O. (2008). Uncovering the blind spot of leadership. Leader to Leader, 2008(47), 52-59.
9. Sternberg, R. J. (2019). A theory of adaptive intelligence and its relation to general intelligence. Journal of Intelligence, https://doi.org/10.3390/jintelligence7040023