All knowledge workers should prepare for artificial intelligence changing what we do. It is certain that those activities that can be automated will be automated. So how can we develop Yoda-like wisdom and avoid being replaced by a large language model?
Wisdom in procurement
The DIKW hierarchy (Data→Information→Knowledge→Wisdom) was developed by the splendidly-named Russell L. Ackoff.
DIKW is often visualised as a pyramid, with raw data at the base ascending to the enlightened peak of wisdom. For procurement, this model promises a logical progression: mountains of ERP numbers (data) are useless unless transformed into spend reports (creating information), which can help make better decisions by applying knowledge (such as category plans). Jedi Masters then make wise decisions informed by the previous stages (wisdom).
But this model is simplistic and dangerously misleading. It underestimates the chaotic, human essence of wisdom, treating it as an inevitable outcome rather than a possibility.
The flaws in the DIKW pyramid
Ackoff’s framework shines in theory, but crumbles in practice. The steps from data to information to knowledge are mechanical. Organise facts, apply them and voilà, results, but does that automatically lead to wisdom?
Wisdom integrates experience, ethics, capability and intuition to navigate uncertainty, something the model glosses over.
Consider noisy data: adding more mixed-quality data doesn’t build wisdom; it erodes it, leading to misguided confidence.
When we have some data but not all the data we need, it is knowledge that informs us of what additional data we need. This inverts the direction to Data→Information→Knowledge→more Data.
I’ve seen teams drowning in “big data” make poor decisions because they lacked the wisdom to question the data’s accuracy. We can’t assume that wisdom flows automatically from applying knowledge. So, where does it come from?
Wisdom isn’t just for Jedi Masters
AI can crunch data, but wisdom demands grappling with ambiguity, ethics and human dynamics, realms where large language models are currently inadequate.
In five years, the jobs that endure will be those requiring wisdom: foreseeing unintended consequences, balancing competing values and making calls in grey areas.
Procurement isn’t just about doing a series of deals; it’s about sustainable, ethical stewardship. Without wisdom, we’re reduced to puppets of algorithms, blind to broader implications, such as eroding trust or stifling innovation.
Cultivating wisdom
Wisdom isn’t innate; it’s built through deliberate practice. Here’s my take on four essential pathways:
- Harness lived experience for pattern recognition: Repeated exposure to successes and failures hones an intuitive edge no algorithm can replicate. A procurement veteran who has experienced multiple supplier failures is more likely to spot red flags. A request for earlier payment on its own might not be significant, but when a staff member leaves and is not replaced, alarm bells start to ring. Consider a fortnightly personal reflection session. Maybe even keep a journal. What’s happening? What may happen next? If our experience is to be valuable, we have to recognise leading and lagging indicators to help build our own prescience
- Build ethical and value foundations: Wisdom thrives on a moral compass, whether personal ethics, organisational culture or professional codes of conduct. Driving a succession of short-term deals to meet a savings target may create medium-term problems, so we need to be alert to the ethical and moral consequences
- Master stakeholder empathy: As Daniel Goleman argues, wisdom involves reading the room: power dynamics, hidden motives and emotional undercurrents. Anticipating how a decision ripples through suppliers, teams, or the public prevents disasters. Procurement practitioners need to be sensitive to the agendas of internal stakeholders, as well as suppliers. If we don’t understand the balance of power between our organisation and our suppliers, who will?
- Extract gold from lessons learned: Post-mortems on failures can teach more than successes, revealing blind spots and unknowns. Successes may reinforce biases; exploring failures can lead to learning. I learned a new capability last month by watching a 20-minute YouTube video. I don’t think watching a series of YouTube videos is going to make me wise! I have to curate the large language model between my ears to do that!
A real-world dilemma: The heart drug discount debacle
Let’s bring this to life with an episode from my career as a pharmaceuticals category manager in public hospitals. It’s my war story, not yours, but it has all the elements of complex decision-making that you and I need to address in our jobs.
A drug company proposed reducing the price of a heart-rhythm drug used post-heart attack. Patients start it in the hospital, but when they are discharged a couple of weeks later, their GPs will prescribe the same drug, probably for the rest of the patient’s life.
My technical advisor was a pharmacist, Keith. “We should reject the 25 percent price cut,” he said. “Why?” I asked him.
Keith explained that the 25 percent price reduction was only to hospitals and the price to community pharmacies was going up by 25 percent. This was a large net cost increase to taxpayers in the long term. Keith and his colleagues were irritated. The move clashed with their ethics and values.
The drug company doubled down, cutting the price to hospitals by a total of 50 percent. The hospital pharmacists saw it as bribery. They refused again, adopting the altruistic view that the healthcare system as a whole would be worse off.
Was this a wise choice?
Absolutely not! It was principled but shortsighted, ignoring the broader dynamics. Let’s apply the potential sources of wisdom:
- Lived experience: This was a rare “Black Swan” event, so there were no patterns to draw from. Relying solely on ethics without precedent left the hospital pharmacists exposed
- Ethical frameworks: Pharmacists’ patient-first ethos clashed with commercial realities. Noble but rigid. Wisdom involves recognising when flexibility is needed
- Stakeholder empathy: They overlooked cardiologists who were craving savings for better equipment, hospital administrators bound by “value for money” clauses in procurement policies and the drug firm’s R&D imperatives. Nobody bothered to seek probity advice. If this had been done, the perceived ethical issues could have been objectively reviewed from a probity perspective, providing clarity and justification for decision-making. Who has the power in this situation? Doctors and the suppliers, not pharmacists and certainly not procurement! Politically, it was a PR nightmare. Imagine the headlines: “Hospital cries poor while rejecting discounts!”
- Lessons learned: The fallout? Fractured internal trust and missed opportunities. Wisdom would have accepted the deal tactically, then leveraged it to pursue systemic reforms, such as greater pricing transparency. And what if the supplier leaked the story to the press? Wisdom anticipates such unknowns, weighing short-term ethics against long-term ecosystem health.
What are the lessons for us all?
This saga underscores procurement’s complexity: asymmetric power between stakeholders, incomplete information and clashing values. Wise professionals choosing when to dig in and when to go with the flow, banking political capital for bigger battles.
In practice, we can all cultivate wisdom by:
- Mapping stakeholder ecosystems holistically, prioritising influential voices
- Assessing power imbalances realistically. Not all stakeholders are equal
- Balancing immediate gains with relational longevity, innovation and trust
- Opting for suboptimal choices if they preserve credibility
- Documenting rationales transparently for accountability
Knowledge informs us about our choices; wisdom helps us select the right option. In a world of noisy data and missing information, known unknowns and competing priorities, we need to bet on our own human judgment. And what would Yoda say?
“Wisdom, the ultimate upgrade it is. Develop it, knowledge workers must, or by AI outsmarted, you will be!”
Paul Rogers, Practice Manager at Landell, brings more than 40 years of experience to the table, having worked in more than 20 countries as a procurement professional, consultant and trainer.
An internationally-recognised expert in procurement and negotiation, Paul has worked on a diverse range of projects, from buying a billion dollars’ worth of gold in an off-market transaction to negotiating with an airline on behalf of a government that owned it.
He’s also the chair of the judges for PASA’s coveted Nigels Awards and is a fellow of CIPS (FCIPS).
