Wisdom, it is said by Lt. Cmdr. Data, “is the difference between knowledge and experience.”

Two of my hero’s of the 20th Century are W. Edwards Deming and Russell L. Ackoff.  Deming is commonly thought of as the “father of quality”.  He taught the Japanese about quality and management in the 50’s and from it Japanese redefined manufacturing and the Toyota Production System (TPS) has become LEAN, which is changing the way all companies do business.  If you hate ISO-9000, blame Deming.  Ackoff was an early pioneer of “Systems Thinking” in the realm of Operations Research (OR).  Incidentally, they were both friends and worked together in the 40’s.

It is commonly understood that the most truly profound ideas are those which are the least surprising, they feel like something you’ve always know.  Indeed, you have always known… the wise teachers are changing something from unconscious and incidental to conscious and intentional.

What is wisdom?  How do we obtain it?  The “Wisdom Hierarchy” has existed in various forms for a long time, but I like Ackoff’s the best.  It is thus:

• Wisdom: Clarity through experience, understanding of consequences
• Understanding: Why?
• Knowledge: How?
• Information: What?
• Data: Metrics

There is a progression here.  It hearkens back to how you learned to describe a story when you were in grade-school… the 5 W’s (and one H): Who, What, When, Where, Why, and How.  If you take these 5 W’s and lay them out in order of importance, you see the converse of the “Wisdom Hierarchy”.  Consider a child running to you saying “Danny’s hurt!”, in what order do we want the information?

1. First, we need the context of the situation: Who is involved, Where and When did this happen?  This is just data, it tells of nothing of importance by itself but it orients us for all following questions as the basis.
2. Second, we need to turn the data into information: What happened?  But information alone can lead to rash decisions and incorrect conclusions.
3. Thirdly, we turn that information into knowledge: How did it happen?  At this point we’re getting intelligent, with what and how we can repeat the process or see where things went wrong, but its still isolated… we need to connect this with the System around it.
4. Fourthly, we turn knowledge into understanding: Why did it happen?  A system view emerges as we see interconnections between parts of the system.  Why did Johny push Danny?  Because Johny wants Danny’s bike.
5. Finally, over time (experience) we can accumulated understanding into wisdom which enables us to not only understand the past, but project that understanding into the future.  We can predict consequences and outcomes before we act.

So, as you can see, this is intuitive stuff, but Ackoff’s Wisdom Hierarchy makes it more intentional.  You may have a sense of what wisdom is, you may “know it when you see it”, but this Hierarchy gives us a map.

What’s interesting is that we commonly only go part way up the ladder of wisdom.  We get to information or knowledge and then simply assume the rest, using intuition.  But that’s dangerous.  We all know what they say about assumptions: “ass-u-me”.  It certainly isn’t repeatable.  To grow as an organization it is important to institutionalize wisdom, to be methodical about it.  When was the last time you made a decision without knowing the how or why?  Maybe you put out that fire, but it will come back again to be sure.

Deming’s System of Profound Knowledge gives a framework to evaluate problems (questions, things, whatever) in the real world.  It has four components:

1. Appreciation of a System: Things don’t exist in the real world in isolation, things/people/ideas/etc. are systems.  In order to understand something we must realize this and examine the system.  The word “Why?” is a systems thinking word, when a child asks why they are trying to stitch information from two things together into a single system, they are exploring the inter-relations of the world.  “Why is the sky blue?”  “Why are orders taking so long?” We’re exploring the inter-relations of a system.  Profound knowledge starts with seeing the system.
2. Understanding of Variation:  In statistical control there are two types of variation: common and special variation.  Difficult problems get even more difficult when we confuse the two.  Common variation is just a fact of life, things aren’t perfect all the time.  If your spouse gets home late by 30 minutes we may say that this is “common variation”, traffic or meetings may have caused them to be late, nothing unusual here.  However, if your spouse is late by 3 hours, that’s a “special variation”, its outside control bounds and indicates something unusual that should be investigated.  We sometimes say, “pick your battles”, and this is an example of that, don’t nit-pick and waste time solving normal variation, focus on the real strange ones that indicate a real problem.
3. Theory of Knowledge: The essence of scientific method is that of creating and evolving theories.  Theories make predictions and codify your existing understanding.  The system of profound knowledge is about building and refining these theories.
4. Understanding of Psychology: Trying to understand anything without considering the effects on and assumption of people is pointless.  You must consider the opinions, assumptions, reactions, perceptions of people to bring reality into what is otherwise cold.  Just because something may be efficient doesn’t mean it will be effective, psychology is a big part of that.

Together, the Wisdom Hierarchy and the System of Profound Knowledge are two powerful tools (frameworks really) for approaching problems and change, going from where we are to where we wish to be.  For building something to be proud of, rather than just making ourselves busy with the latest fire.

While you may quickly dismiss both of these, I hope you will reflect on them and see if they can guide you toward being more structured and intentional about how you address life’s challenges, at home or at work.  I have pondered them for some time and continue to find new utility in them.

Note to the reader: The above explanations are my own based on Ackoff’s and Deming’s writings in whole and therefore may not match exactly with explanations you may find elsewhere.  Most bullet point explanations are too short and miss the true point, in my opinion.  This is an attempt on my part to better summarize their true intent.