00:00:01
[Music] [Music] Barry thank you very much for speaking with knowledge of Wharton today my
00:00:24
pleasure you study the link between economics and psychology and have more recently been focusing on wisdom with
00:00:30
Ken sharp uh your co-author on practical wisdom the issues you are writing about
00:00:35
have really resonated your TED Talks have been watched for by U nearly 5 million people astonishing isn't it it
00:00:41
it's amazing it's amazing you know that there's a collective sense of
00:00:45
dissatisfaction with and mistrust of the institutions and people that surround us
00:00:50
why is that and how are we responding so I don't want to be sort of monomaniacal about this I think that
00:00:58
there are probably many reasons not one for this distrust of Institutions but the one that Ken and I focused on in
00:01:05
writing this book uh about wisdom is that we have we have we have come to the view as a society that when things are
00:01:14
broken the way to fix them is either by making more rules um or by creating smart incentives
00:01:23
so that people will do the right thing because it's in their own self-interest
00:01:27
to do the right thing and if you make a lot of rules and you got somebody standing over people's heads watching
00:01:32
them to make sure that they actually obey the rules then it doesn't you don't
00:01:35
care what people's motivation is you have to follow the rules or you or you're out so anytime something is
00:01:41
broken schools don't work rigid curriculum scripts for teachers to follow and then bonuses if your kids do
00:01:49
well and stuff like that in in in domain after domain if the financial system is
00:01:54
broken change the incentive structure so that Bankers stop uh ripping off their clients uh and the point of our book is
00:02:03
that you will never get what you need and want out of any institution That Matters by relying on rules and
00:02:09
incentives rules and incentives are the booby prize uh if you can't count on
00:02:14
anything else then you impose rules and incentives but you'll never get what you
00:02:19
want you'll just it's a kind of insurance policy against disaster but it
00:02:23
doesn't produce Excellence you need people of good character who want to do the right thing because it's the right
00:02:30
thing who know H who know how to figure out what the right thing is in this particular situation with this
00:02:35
particular person and are willing to improvise uh take the initiative risk being wrong and all in the service of
00:02:45
actually serving the emission of whatever activity they're in teachers who want their kids to learn and be
00:02:51
excited about learning doctors who want their patients to be healthy lawyers who
00:02:55
want their clients interests to be well served and so on and don't need to be
00:03:00
goated either by rules or by incentives into achieving that so we think that what we are doing as a society instead
00:03:08
is um a very very pale substitute for what's needed but you never hear you don't hear anyone talking about the
00:03:16
importance of character to the making of good teachers good doctors good bankers
00:03:21
and uh pretty much good good uh politicians or or pretty much anything else that's right and you say that
00:03:27
practical wisdom is uh is a better path can you tell us uh the source of that idea and and what you mean by that well
00:03:34
the source of the idea embarrassingly enough is Aristotle Aristotle uh who was famous uh for being
00:03:43
what's called a virtue theorist that is the way you create good societies is by
00:03:48
creating good people and the way you create good people is by instilling in them the virtues and he had his own list
00:03:54
of what the virtues are and our list would be different from his but the point is he thought that good societies
00:04:01
depend on people of good character and good character is something that can be trained so he had a big list of Virtues
00:04:08
but he thought there was one particular virtue that was the master and that one he called practical wisdom and the
00:04:15
reason was courage is a virtue but you can be too courageous and then we don't
00:04:20
call it Courage anymore we call it recklessness so what's the right amount of Courage that requires wisdom honesty
00:04:28
is a virtue but so is kindness often you find yourself having to decide whether this is a situation that calls for
00:04:35
honesty or one that calls for kindness what enables you to figure that out wisdom is what enables you to figure
00:04:42
that out and so for him uh one one the way one scholar put it is that these virtues are running running around like
00:04:49
unruly school children and wisdom is what creates order out of this chaos uh and actually helps people to find what
00:04:57
he called the mean the right amount appropriate for this person and this situation so all we did in the book was
00:05:04
try to take Aristotle's ideas and translate them into a language that makes sense in the 21st century and
00:05:11
apply them to the kinds of Institutions and problems that we face in modern developed societies as opposed to
00:05:19
ancient Athens and the thing that you do so well is you really describe um people who are
00:05:25
are living that and um uh illustrating that through their lives and the person who I think a lot about is Luke um the
00:05:32
janitor and St I would love to hear you talk a little bit about that and really what the takeaways are I I can't tell
00:05:38
you how surprised I was um by the by the choice that he made in that moment and it startled me that I was surprised by
00:05:46
it so so this is this is work that was actually done by a um a psychologist named Amy rusi who is visiting Wharton
00:05:56
this very year but she's on the faculty at at uh at Yale and was an undergraduate here at Penn and she
00:06:02
started doing this work as an undergraduate at Penn she was interested in how people craft their jobs and
00:06:13
especially people who do what is called Dirty Work the the people who are invisible the people we don't notice so
00:06:20
she did a big study of Hospital janitors Hospital custodians at a major academic
00:06:25
teaching in academic hospital and you know for for a lot of them there was a long list of job duties I don't know 30
00:06:33
different things that you had to do as a janitor but when she started interviewing janitors she found there
00:06:38
were some who thought their job was just doing these 30 things emptying trash restocking shelves washing floors and so
00:06:45
on but there was a non-trivial number who thought their job was doing whatever was necessary to provide Aid and comfort
00:06:54
to the professional staff to the patients and to the patients families so the example of Luke involved a a young
00:07:02
man who was in a coma apparently the result of a fight in which he got the tar beaten out of him uh and this Luke
00:07:11
this young boy's father was keeping a vigil all day every day except that he
00:07:16
would go out and smoke a cigarette now and then so Luke cleaned the kids's room
00:07:22
and uh washed the floor but the dad was out smoking and didn't see it and so
00:07:26
when the dad came up he said he he angrily accused Luke of not cleaning the boy's room you know the boy's in a coma
00:07:35
how the boy wouldn't know so he was taking advantage and it should also be said that Luke is African-American the
00:07:41
boy had gotten beaten beaten up by African-Americans and so you could imagine a certain antagonism on the part
00:07:49
of the dad toward a black person who was responsible for his sons getting beaten
00:07:54
up so Luke was angry but he immediately suppressed the anger and he said oh okay
00:08:01
I'll take care of it and he went and he cleaned the room again he cleaned it so
00:08:05
that the boy's father could see him clean it and he said in interview that he understood that you know he should
00:08:12
have been angry he could have been angry but he finally decided you know I I can
00:08:17
understand what this man is going through why not do something so he can see that he's actually having an effect
00:08:25
uh on that contributes to the welfare of his son so he clean the room again and it it's really a it's an incredibly
00:08:32
touching story because one doesn't expect that kind of judgment and Humanity from people who are basically
00:08:41
invisible these are the people nobody notices without whom the institutions wouldn't function uh and the reason Luke
00:08:49
was able to do that and he has you know uh colleagues who behave similarly is that they weren't being so closely
00:08:55
supervised so they could do their job the 30 things on on their list and still have time to do what they thought was
00:09:03
their real job which was to provide comfort and care to patients and their families imagine the hospital um having
00:09:12
financial difficulties and having to crack down and you know layoff staff so now they're you know onethird fewer
00:09:19
janitors than there used to be well all of a sudden you have more responsibilities and you have to be
00:09:23
working faster and harder and you don't have time you got somebody breathing
00:09:28
down your neck and you don't half time to do what you think is your real job
00:09:32
because there are just too many rooms to get clean and too many trash cans to uh
00:09:36
empty so Luke was blessed to be working in a time and in an environment in which
00:09:42
his supervisors left him alone so he could do both the job that was officially defined as his job and the
00:09:50
job as he had crafted it and get enormous satisfaction out of it and when you asked him and people like him how
00:09:57
how how hard is it to learn to do this job they would say it takes a lot of experience to do this job it doesn't
00:10:03
take a lot of experience to wash floors and empty trash cans it takes a lot of experience to know how to intervene with
00:10:10
patients and their families in a way that actually is comforting and helpful you know you don't want to be a Loose
00:10:16
Cannon and initially you probably are your well-intentioned um efforts to make people feel better don't work but over
00:10:24
time you learn when to intervene how to intervene and how what small things you can do that make a big differen there
00:10:30
another nurse I think we mentioned her in the book who uh there was somebody who' had been in the hospital for months
00:10:36
and months and months and she not did I say nurse janitor who just took it upon herself to change the pictures on the
00:10:43
wall in this patient's room who notices what pictures are on the wall in the
00:10:47
hospital room but she figured that maybe it would be it would it would Inspire this person to get a sense that there
00:10:54
was actually progress being made that things were changing if the environment wasn't exactly the same hour after hour
00:11:01
and day after day so I don't know every couple of weeks she take pictures from
00:11:04
another room and put them in this room uh this is not obviously part of her job description so it's I think people
00:11:11
really do come up short when they hear this because they don't they don't
00:11:16
expect it they deeply admire it when they hear about it and they what I hope is they ask themselves well how can I do
00:11:23
something like that in my work right I don't know if they do ask themselves that question but it would be nice if
00:11:29
they did there um that's you know one very interesting or a couple very interesting
00:11:35
examples of one way of sort of um acting um in an ethical way um using the wisdom
00:11:43
that you talk about um on a a very uh personal level you know um but what about the cases where the stakes are
00:11:50
much higher such as in the case of those that surrounded pen State's um jury
00:11:54
sanduski many people have uh been charged with keeping his crimes a secret you know what can businesses do to help
00:12:01
their employees do the right thing in cases like that well I think that's a huge challenge I I I'm much better at
00:12:08
saying what won't do the job than I am saying what will start there what won't
00:12:13
do the job is giving lectures to people about about business ethics or organizational ethics there's no sure
00:12:21
way to marginalize ethics than to have a separate course in it because what people learn is that ethics is something
00:12:29
that you learn in a separate course and U write exam answers to and you try as hard as you can to make sure that it is
00:12:37
completely insulated from your actual day-to-day activities on the job so I think that you need to
00:12:45
exemplify the behavior that you want the people working uh with you and under you
00:12:52
to display you need to be a model of what it means to be an ethical organization and uh you need to be doing
00:13:00
it all day every day uh and there are very very few organizations that I'm aware of that that behave like that
00:13:09
there is a um Charter School movement that's become National called Kip knowledge is power they've had
00:13:16
incredible uh uh results with inner city kids um there are a couple of Kip schools actually in Philadelphia and
00:13:24
what and what the the founders of Kip realized though they didn't quite say it
00:13:29
in that way at the time is that the most important thing that kids need to learn
00:13:34
is character if you can teach them character respect for knowledge respect for the educational process respect for
00:13:43
the teacher respect for one another if you can teach them that then teaching them how to add and subtract is Trivial
00:13:50
and if you can't teach them that then teaching them how to add and subtract is
00:13:54
impossible so then the question is how do you teach them that and the answer is you teach them that by showing it to
00:14:00
them every minute of every day so that's what Kip teachers do they are on stage
00:14:07
all they are always teaching and they know that they're always teaching it's
00:14:11
incredibly demanding on them and I think it's the secret sauce that produces
00:14:17
these extraordinary results that's what people who run organizations need to do
00:14:22
right so it's it's not um the the rule or the policy or the incentive to act in
00:14:28
a certain way it's really over time starting to Foster certain ideals and behaviors um by um through the act of
00:14:37
mentors or teachers or even um uh ways of doing things within an organization is yes you need the power of good
00:14:45
examples you need to show people that you really do value ethical conduct uh rather than just talking the talk and uh
00:14:54
and and then ignoring unethical Behavior I think the reason one reason why the why the bank catastrophe has happened is
00:15:01
that you know you have these CEOs of major Banks who have become public figures and they go off and give
00:15:08
speeches about the bank's ethical commitments and commitments to rebuilding the city and the neighborhood
00:15:13
and this that and the other thing and they know that two levels down in the hierarchy there is a manager whose job
00:15:20
depends on the people he supervises making their margins they don't have to know how that
00:15:26
manager gets that to happen all they need to know is that the manager does get it to happen and if he doesn't out
00:15:33
he goes so there's this it's not just plausible deniability it's just like
00:15:38
complete indifference to what it takes to produce the results that you're insisting that the people who work for
00:15:45
you produce and meanwhile you're giving this these completely sincere speeches
00:15:49
about what an ethical uh uh community-minded company you are uh and that that are in practice um uh betray
00:15:59
basically every minute of every day by the people who work under you um so as long as that kind of dynamic exists you
00:16:07
can forget about ethical um uh speeches from corporate leaders because it will never actually have an impact on the way
00:16:18
the people who are making the day-to-day decisions in the company operate and I guess there's a question here about how
00:16:25
institutions can regain our trust um you know to Circle back back to the sort of
00:16:30
the first part of what we were discussing is that possible it's not easy I think we you know you have
00:16:37
to you have to do it again there's the power of the good example you do it by
00:16:45
doing the right thing in in conspicuous ways uh and slowly bit by bit Episode by episode you re you win
00:16:57
back the trust of the community that depends on you um you can't there's
00:17:03
nothing you can tell people that will or should earn uh their trust you have to demonstrate it in the way you behave
00:17:12
which means you have to be in it for the long Hall and be patient uh uh and we you sort of win one victory at a time um
00:17:22
and with respect to some institutions it I'm you know I can't it's hard to be
00:17:26
optimistic I don't see how uh um what what uh public educational institutions
00:17:33
can do to regain the trust of the families who are have not been well served by them um I don't know what
00:17:40
financial institutions can do to regain the trust of people who have not been well served by them as far as I'm
00:17:46
concerned the ra the uh the ratings agencies should all be you know everybody in the ratings agency should
00:17:52
simply be thrown in jail and the keys to the jail thrown away they they so betrayed the public Trust
00:17:59
and they're giving AAA ratings to every piece of crap Under the Sun uh it'll
00:18:05
take a generation if people are paying attention it will take a generation to regain the trust that got lost in the
00:18:11
space of you know six months and the adoption of a lot more practical wisdom thank you very much for talking with
00:18:17
knowledge at Wharton today thank you nice talking to you [Music]