Wisdom

By Brad Thomason, CPA

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Wisdom is one of those words that if someone asks you for a handy general definition you will immediately begin to fumble.
 
I do not have a good one to offer, myself.
 
But I do think the project of wisdom is a lot easier to state:  wisdom is what we rely on when the correct answer is not obvious.
 
It does not take wisdom to decide to stop when the light turns red.
 
It does not take wisdom to know that a ten-dollar bill will cover it when the lady at the drive-thru tells you the total is $9.38 (can you believe how expensive fast food has gotten?).
 
It does not take wisdom to tell the eight-year old that she can’t jump off the roof.
 
Rather, wisdom is what we rely on when we don’t have much else to turn to.  Seen in that light, in some respects wisdom is a negative; a necessary evil; a thing we’d just as soon never have to turn to, given that most of us prefer clear and easy answers.
 
The phrase I like best to describe these kinds of situation is “judgment under uncertainty,” in other words, the need to decide even though you can’t be sure.  I’m not sure who coined the term, but I first came across it in the work of Daniel Kahneman and Amos Tversky.  They published a very influential paper by that name in 1974.  Further development of the concepts they explored spawned a whole shelf of plain-English books about the science of decision making, and eventually resulted in a Noble prize (Economics) for Kahneman.
 
Interestingly, by 1974 the study of decision making as a formal pursuit was already well underway.  Most attribute the beginning of the field to a 1944 work by John Von Neumann and Oskar Morgenstern (Theory of Games and Economic Behavior).  The term “game theory” derives directly from their book. 
 
That notwithstanding, they were hardly the only ones thinking about it.  In the waning days of World War II, Peter Drucker, who many regard as the father of modern business management, was taking an in-depth look at how the war had affected manufacturing at General Motors, and how the company moved from decision to decision in the face of not knowing exactly what was happening with demand for civilian automobiles, nor military vehicles and equipment.  His work was published in 1946 in a book called Concept of the Corporation, a title likely known to every MBA program in the English-speaking world.
 
And these more modern works really just re-raise notions first hinted at in the wirings of the world’s ancient cultures.  This is not a new problem for human beings.  In fact, it may be the oldest.
 
We all experience these instances of judgment under conditions of uncertainty, whether in terms of job and career, raising children, or preparing for and managing retirement.  In these moments, what we should do is less obvious than the fact that circumstances are making it clear we’re going to have to do something, and perhaps do it soon.
 
This is a topic I raise with some frequency because I believe it is of high importance to be able to quickly realize the type of situation you’re in at a given moment.  Are you in a clear situation with a right answer available, or one where you’re going to have to weigh the various factors, never knowing for certain that you got it right, but having to act anyway?  If you spend your time looking for a certain answer in a situation where one’s not available, you can waste a lot of time and resources and find yourself at the point of action completely at a loss about which direction to go.  Not to mention overwhelmingly frustrated, too.
 
I find guidance for these types of wisdom-requiring circumstances coming from some principles I learned early in my career as an auditor.  If you think about it, an audit takes place when someone makes an assertion, and there’s a desire to know if what they are asserting is correct or not.  The auditor doesn’t really know ahead of the exercise; in other words, there’s no obvious answer at the outset.  If there were, and audit wouldn’t be required.  So that seems analogous, to me.
 
A good audit almost always includes (at least) three things:  an effort to account for everything, a methodical process designed to work through each piece one at a time, and an awareness that getting through everything may be time-consuming.
 
Next time you find yourself in a situation where wisdom is going to have to be brought to bear because a clear answer is not on offer, don’t waste your time trying to hunt down certainty.  Instead, use the time to “audit” the situation so that when the moment of action arrives, even if you aren’t entirely sure what to do, you won’t be guessing blindly.  Even if all you can accomplish is ruling out a couple of options that probably won’t work, your odds of a positive outcome improve.
 
Moreover, you will be less prone to second-guessing and beating yourself up afterwards, thinking that there was a right answer which you simply failed to find.  No one likes to take an action and have it followed by a set-back.  But if the outcome wasn’t clear, nor the relevant factors within your control, that argues pretty effectively against the set-back being your fault.    Sometimes the receiver drops the ball.  You can’t let that shake your confidence in your ability to throw the ball; nor use it as an excuse to stall the next time a ball needs throwing. 
 
Just wouldn’t be the wise thing to do.
 
 (see what I did there?)