Leadership, wisdom, mind-sets and all that – Part 2


What are the links between data, information, knowledge and wisdom? Over to Gerard Chick, chief knowledge officer of Optimum Procurement for part two of his three part series.

Part 1 focused specifically on wisdom, leadership and the recognition of the importance of the concepts of learning and leading in business. It also touched on the debate regarding talent acquisition and retention and that modern organisations which are full of thinkers are quite different to organisations full of doers. So as part of moving this debate along part two explores the linkages between data, information, knowledge and wisdom.

As with many things in business the traditional way to describe linkages has been to see a progressive relationship and typically within a chain; here the chain starts with data, moving to information and then knowledge and at the chain’s end is wisdom. Consequently, there is, increasing ‘added value’ as we move along the chain.

This progression (I would suggest) has a fundamental flaw, which arises from the relationship between these four concepts. I do not believe that the relationship(s) are linear in nature. Therefore, there is no (linear) step-by-step movement along the chain from data to wisdom. This basic, mechanistic progression is a reflection of Newton’s ‘Mechanistic Universe’ a system reliant on cause and effect. This notion was repackaged in the early 1900’s by the Management ‘Science’ of Frederick Winslow Taylor. To my mind, the integration of all four concepts requires at least one, if not two, quantum or qualitative jumps.

Information can certainly be considered a ‘higher’ form of data, because it provides greater context and so greater meaning and/or usefulness. However, the transformation of information into knowledge requires the first quantum jump. For example a book that describes how to conduct a negotiation is an example of information. It is only when information is actually used that it is becomes knowledge. In essence, knowledge is information in use and, of course, it is through its use, that you gain further information, which then gets turned into even more effective knowledge. It is a continuous dynamic process.

But where does wisdom come in? In essence, wisdom is the medium through which we integrate our values into our decision-making processes. It is one thing to turn information into knowledge that ‘makes things happen’, but it is quite another thing to make the ‘right’, ‘good’ or ‘better’ things happen. How we actually use knowledge depends on our values.

Instead of moving along from knowledge to wisdom, we actually move down from wisdom to knowledge — and that is how we incorporate our values into our knowledge based decision-making or what we generally call wisdom. For example in the Procurement Function, it is only possible – and justifiable – for decisions to be reduced to a cost/benefit analysis, if it is possible to quantify all the ‘value’ elements within the equation in monetary terms. In the past value has been included implicitly, whereas today because of issues such as Corporate Social Responsibility (amongst many other considerations) that dimension needs to be made much more, if not fully, explicit. All such business decisions involve the integration of the economic dimension of value, with the ethical (i.e. ‘right’) dimension of ones ‘values’.

In practice we do this all the time; but today, we are required to be more explicit about what these values are, and how they can be and are valued. Consequently this puts even greater emphasis on our ability to undertake effective dialogue. Of course, this too is a dynamic process and there is continual feedback from the experience of our actions into whether we need more information and data – what and how much more information/data we need – are also values influenced decisions especially in this the era of the ubiquitous  ‘big data’. Therefore how values are assessed both as the ends, and means, of an outcome, are critically important in our entire decision making.

In order to complete this picture it is useful to reverse the data, information, knowledge and wisdom progression into wisdom, knowledge, information and data, and consider that it is our values, wisdom that defines the limits of what we consider acceptable in the first place, and that decision then determines our knowledge and consequential ‘action’ priorities, which then determines what information is required, and that determines what further questions need to be asked about the data required.

In practice, we need to understand these two progressions, and how they relate to each other, if we want to understand both how we incorporate values into our decision making processes, and why wisdom plays such an important role. Although, it does need to be recognised that sometimes the way these words and concepts have been used in the past has not always helped this process.

Perhaps that is one reason why wise decision making has not been as widely practiced as we would have liked? Being decisive is easy; being decisive about the ‘right’ things is the real challenge that confronts us all. I would argue that in the context of a leadership focus we should start with values/wisdom as our base, which then provides the framework within which we manage knowledge, and so on through the pyramid to information and data. Consequently, without an effective base at one level, it is impossible to manage effectively the next level.

It is also useful to see knowledge as information in use, and wisdom as the integration of knowledge and values, as reflected by the following, “the function of wisdom is to discriminate between good and evil”[1] and “knowledge is of no value unless you put it into practice”[2].

In fact one might conclude that those focused on the future, rather than the past, should understand that priority should be given to the message, rather than the messenger!

The above helps establish the link between wisdom and its relevance to organisational strategy, knowledge development as well as sound leadership. Moreover, it is wisdom, knowledge with some degree of ‘permanence’ which ought to be shared with the next generation through learning.

1 De Officiis on Duties; Or, on Obligations Marcus Tullius Cicero

2 The Note-books of Anton Chekhov (1921 edition)

Gerard Chick is chief knowledge officer Optimum Procurement. His new book, The Procurement Value Proposition, is co-authored by Prof Robert Handfield.

The Procurement Value Proposition tackles critical challenges head-on and sets a bold new vision. The book examines how organizations can use procurement to drive competitive advantage. It features insights from business leaders and case studies of companies that are moving through procurement transformation.


About Author

Procurement and Supply Australasia (PASA) is the leading provider of information and education to procurement and supply professionals throughout Australia and New Zealand. PASA supports the largest community of engaged procurement stakeholders in the region, through its renowned series of events, publications, awards, plus various community and network building activities. PASA is a trading name of BTTB Marketing, for many years recognised as the leading producer of conferences and events for the procurement profession in Australia and New Zealand. Whether producing under the BTTB, CIPSA Conferences or now PASA brands over the last ten years, our events have consistently led the market in terms of both educational and networking opportunities.

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