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Barry thank you very much for speaking
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with knowledge of Wharton today my
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pleasure you study the link between
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economics and psychology and have more
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recently been focusing on wisdom with
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Ken sharp uh your co-author on practical
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wisdom the issues you are writing about
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have really resonated your TED Talks
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have been watched for by U nearly 5
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million people astonishing isn't it it
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it's amazing it's amazing you know that
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there's a collective sense of
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dissatisfaction with and mistrust of the
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institutions and people that surround us
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why is that and how are we
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responding so I don't want to be sort of
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monomaniacal about this I think that
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there are probably many reasons not one
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for this distrust of Institutions but
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the one that Ken and I focused on in
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writing this book uh about wisdom is
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that we have we have we have come to the
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view as a society that when things are
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broken the way to fix them is either by
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making more
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rules um or by creating smart incentives
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so that people will do the right thing
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because it's in their own self-interest
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to do the right thing and if you make a
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lot of rules and you got somebody
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standing over people's heads watching
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them to make sure that they actually
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obey the rules then it doesn't you don't
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care what people's motivation is you
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have to follow the rules or you or
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you're out so anytime something is
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broken schools don't work rigid
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curriculum scripts for teachers to
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follow and then bonuses if your kids do
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well and stuff like that in in in domain
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after domain if the financial system is
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broken change the incentive structure so
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that Bankers stop uh ripping off their
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clients uh and the point of our book is
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that you will never get what you need
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and want out of any institution That
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Matters by relying on rules and
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incentives rules and incentives are the
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booby prize uh if you can't count on
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anything else then you impose rules and
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incentives but you'll never get what you
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want you'll just it's a kind of
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insurance policy against disaster but it
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doesn't produce Excellence you need
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people of good character who want to do
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the right thing because it's the right
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thing who know H who know how to figure
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out what the right thing is in this
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particular situation with this
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particular person and are willing to
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improvise uh take the initiative risk
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being wrong and all in the service of
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actually serving the emission of
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whatever activity they're in teachers
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who want their kids to learn and be
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excited about learning doctors who want
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their patients to be healthy lawyers who
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want their clients interests to be well
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served and so on and don't need to be
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goated either by rules or by incentives
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into achieving that so we think that
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what we are doing as a society instead
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is um a very very pale substitute for
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what's needed but you never hear you
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don't hear anyone talking about the
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importance of character to the making of
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good teachers good doctors good bankers
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and uh pretty much good good uh
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politicians or or pretty much anything
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else that's right and you say that
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practical wisdom is uh is a better path
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can you tell us uh the source of that
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idea and and what you mean by that well
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the source of the idea embarrassingly
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enough is Aristotle
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Aristotle uh who was famous uh for being
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what's called a virtue theorist that is
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the way you create good societies is by
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creating good people and the way you
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create good people is by instilling in
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them the virtues and he had his own list
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of what the virtues are and our list
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would be different from his but the
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point is he thought that good societies
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depend on people of good character and
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good character is something that can be
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trained so he had a big list of Virtues
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but he thought there was one particular
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virtue that was the master and that one
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he called practical wisdom and the
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reason was courage is a virtue but you
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can be too courageous and then we don't
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call it Courage anymore we call it
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recklessness so what's the right amount
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of Courage that requires wisdom honesty
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is a virtue but so is kindness often you
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find yourself having to decide whether
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this is a situation that calls for
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honesty or one that calls for kindness
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what enables you to figure that out
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wisdom is what enables you to figure
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that out and so for him uh one one the
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way one scholar put it is that these
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virtues are running running around like
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unruly school children and wisdom is
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what creates order out of this chaos uh
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and actually helps people to find what
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he called the mean the right amount
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appropriate for this person and this
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situation so all we did in the book was
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try to take Aristotle's ideas and
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translate them into a language that
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makes sense in the 21st century and
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apply them to the kinds of Institutions
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and problems that we face in modern
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developed societies as opposed to
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ancient
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Athens and the thing that you do so well
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is you really describe um people who are
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are living that and um uh illustrating
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that through their lives and the person
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who I think a lot about is Luke um the
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janitor and St I would love to hear you
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talk a little bit about that and really
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what the takeaways are I I can't tell
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you how surprised I was um by the by the
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choice that he made in that moment and
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it startled me that I was surprised by
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it so so this is this is work that was
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actually done by a um a psychologist
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named Amy rusi who is visiting Wharton
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this very year but she's on the faculty
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at at uh at Yale and was an
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undergraduate here at Penn and she
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started doing this work as an
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undergraduate at Penn she was interested
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in how people craft their jobs and
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especially people who do what is called
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Dirty Work the the people who are
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invisible the people we don't notice so
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she did a big study of Hospital janitors
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Hospital custodians at a major academic
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teaching in academic hospital and you
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know for for a lot of them there was a
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long list of job duties I don't know 30
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different things that you had to do as a
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janitor but when she started
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interviewing janitors she found there
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were some who thought their job was just
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doing these 30 things emptying trash
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restocking shelves washing floors and so
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on but there was a non-trivial number
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who thought their job was doing whatever
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was necessary to provide Aid and comfort
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to the professional staff to the
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patients and to the patients families so
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the example of Luke involved a a young
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man who was in a coma apparently the
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result of a fight in which he got the
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tar beaten out of him uh and this Luke
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this young boy's father was keeping a
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vigil all day every day except that he
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would go out and smoke a cigarette now
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and then so Luke cleaned the kids's room
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and uh washed the floor but the dad was
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out smoking and didn't see it and so
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when the dad came up he said he he
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angrily accused Luke of not cleaning the
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boy's room you know the boy's in a coma
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how the boy wouldn't know so he was
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taking advantage and it should also be
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said that Luke is African-American the
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boy had gotten beaten beaten up by
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African-Americans and so you could
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imagine a certain antagonism on the part
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of the dad toward a black person who was
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responsible for his sons getting beaten
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up so Luke was angry but he immediately
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suppressed the anger and he said oh okay
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I'll take care of it and he went and he
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cleaned the room again he cleaned it so
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that the boy's father could see him
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clean it and he said in interview that
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he understood that you know he should
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have been angry he could have been angry
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but he finally decided you know I I can
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understand what this man is going
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through why not do something so he can
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see that he's actually having an effect
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uh on that contributes to the welfare of
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his son so he clean the room again and
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it it's really a it's an incredibly
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touching story because one doesn't
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expect that kind of judgment and
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Humanity from people who are basically
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invisible these are the people nobody
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notices without whom the institutions
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wouldn't function uh and the reason Luke
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was able to do that and he has you know
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uh colleagues who behave similarly is
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that they weren't being so closely
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supervised so they could do their job
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the 30 things on on their list and still
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have time to do what they thought was
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their real job which was to provide
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comfort and care to patients and their
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families imagine the hospital um having
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financial difficulties and having to
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crack down and you know layoff staff so
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now they're you know onethird fewer
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janitors than there used to be well all
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of a sudden you have more
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responsibilities and you have to be
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working faster and harder and you don't
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have time you got somebody breathing
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down your neck and you don't half time
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to do what you think is your real job
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because there are just too many rooms to
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get clean and too many trash cans to uh
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empty so Luke was blessed to be working
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in a time and in an environment in which
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his supervisors left him alone so he
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could do both the job that was
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officially defined as his job and the
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job as he had crafted it and get
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enormous satisfaction out of it and when
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you asked him and people like him how
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how how hard is it to learn to do this
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job they would say it takes a lot of
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experience to do this job it doesn't
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take a lot of experience to wash floors
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and empty trash cans it takes a lot of
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experience to know how to intervene with
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patients and their families in a way
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that actually is comforting and helpful
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you know you don't want to be a Loose
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Cannon and initially you probably are
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your well-intentioned um efforts to make
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people feel better don't work but over
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time you learn when to intervene how to
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intervene and how what small things you
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can do that make a big differen there
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another nurse I think we mentioned her
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in the book who uh there was somebody
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who' had been in the hospital for months
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and months and months and she not did I
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say nurse janitor who just took it upon
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herself to change the pictures on the
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wall in this patient's room who notices
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what pictures are on the wall in the
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hospital room but she figured that maybe
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it would be it would it would Inspire
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this person to get a sense that there
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was actually progress being made that
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things were changing if the environment
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wasn't exactly the same hour after hour
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and day after day so I don't know every
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couple of weeks she take pictures from
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another room and put them in this room
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uh this is not obviously part of her job
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description so it's I think people
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really do come up short when they hear
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this because they don't they don't
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expect it they deeply admire it when
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they hear about it and they what I hope
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is they ask themselves well how can I do
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something like that in my work right I
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don't know if they do ask themselves
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that question but it would be nice if
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they
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did there um that's you know one very
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interesting or a couple very interesting
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examples of one way of sort of um acting
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um in an ethical way um using the wisdom
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that you talk about um on a a very uh
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personal level you know um but what
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about the cases where the stakes are
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much higher such as in the case of those
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that surrounded pen State's um jury
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sanduski many people have uh been
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charged with keeping his crimes a secret
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you know what can businesses do to help
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their employees do the right thing in
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cases like that well I think that's a
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huge challenge I I I'm much better at
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saying what won't do the job than I am
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saying what will start there what won't
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do the job is giving lectures to people
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about about business ethics or
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organizational ethics there's no sure
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way to marginalize ethics than to have a
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separate course in it because what
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people learn is that ethics is something
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that you learn in a separate course and
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U write exam answers to and you try as
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hard as you can to make sure that it is
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completely insulated from your actual
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day-to-day activities on the job so I
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think that you need to
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exemplify the behavior that you want the
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people working uh with you and under you
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to display you need to be a model of
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what it means to be an ethical
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organization and uh you need to be doing
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it all day every day uh and there are
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very very few organizations that I'm
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aware of that that behave like that
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there is a um Charter School movement
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that's become National called Kip
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knowledge is power they've had
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incredible uh uh results with inner city
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kids um there are a couple of Kip
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schools actually in Philadelphia and
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what and what the the founders of Kip
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realized though they didn't quite say it
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in that way at the time is that the most
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important thing that kids need to learn
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is character if you can teach them
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character respect for knowledge respect
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for the educational process respect for
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the teacher respect for one another if
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you can teach them that then teaching
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them how to add and subtract is Trivial
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and if you can't teach them that then
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teaching them how to add and subtract is
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impossible so then the question is how
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do you teach them that and the answer is
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you teach them that by showing it to
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them every minute of every day so that's
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what Kip teachers do they are on stage
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all they are always teaching and they
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know that they're always teaching it's
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incredibly demanding on them and I think
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it's the secret sauce that produces
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these extraordinary results that's what
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people who run organizations need to do
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right so it's it's not um the the rule
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or the policy or the incentive to act in
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a certain way it's really over time
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starting to Foster certain ideals and
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behaviors um by um through the act of
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mentors or teachers or even um uh ways
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of doing things within an organization
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is yes you need the power of good
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examples you need to show people that
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you really do value ethical conduct uh
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rather than just talking the talk and uh
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and and then ignoring unethical Behavior
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I think the reason one reason why the
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why the bank catastrophe has happened is
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that you know you have these CEOs of
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major Banks who have become public
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figures and they go off and give
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speeches about the bank's ethical
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commitments and commitments to
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rebuilding the city and the neighborhood
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and this that and the other thing and
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they know that two levels down in the
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hierarchy there is a manager whose job
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depends on the people he supervises
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making their
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margins they don't have to know how that
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manager gets that to happen all they
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need to know is that the manager does
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get it to happen and if he doesn't out
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he goes so there's this it's not just
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plausible deniability it's just like
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complete indifference to what it takes
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to produce the results that you're
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insisting that the people who work for
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you produce and meanwhile you're giving
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this these completely sincere speeches
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about what an ethical uh uh
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community-minded company you are uh and
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that that are in practice um uh betray
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basically every minute of every day by
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the people who work under you um so as
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long as that kind of dynamic exists you
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can forget about ethical um uh speeches
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from corporate leaders because it will
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never actually have an impact on the way
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the people who are making the day-to-day
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decisions in the company operate and I
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guess there's a question here about how
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institutions can regain our trust um you
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know to Circle back back to the sort of
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the first part of what we were
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discussing is that possible it's not
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easy I think we you know you have
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to you have to do it again there's the
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power of the good example you do it by
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doing the right thing
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in in conspicuous ways uh and slowly bit
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by bit Episode by episode you re you win
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back the trust of the community that
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depends on you um you can't there's
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nothing you can tell people that will or
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should earn uh their trust you have to
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demonstrate it in the way you behave
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which means you have to be in it for the
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long Hall and be patient uh uh and we
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you sort of win one victory at a time um
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and with respect to some institutions it
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I'm you know I can't it's hard to be
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optimistic I don't see how uh um what
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what uh public educational institutions
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can do to regain the trust of the
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families who are have not been well
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served by them um I don't know what
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financial institutions can do to regain
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the trust of people who have not been
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well served by them as far as I'm
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concerned the ra the uh the ratings
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agencies should all be you know
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everybody in the ratings agency should
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simply be thrown in jail and the keys to
00:17:55
the jail thrown away they they so
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betrayed the public Trust
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and they're giving AAA ratings to every
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piece of crap Under the Sun uh it'll
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take a generation if people are paying
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attention it will take a generation to
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regain the trust that got lost in the
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space of you know six months and the
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adoption of a lot more practical wisdom
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thank you very much for talking with
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knowledge at Wharton today thank you
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nice talking to you
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[Music]
