St. Ignatius of Loyola said, “Prudence has two eyes, one that foresees what one has to do, the other that examines afterword what one has done.”
Ignatius, was the founder of the Jesuits, an order of Catholic priests. He was born in 1491, of a family of minor nobility in Spain. As a young man, Ignatius Loyola was inflamed by the ideals of knighthood (one might even say vanity).
In 1521, Ignatius was gravely wounded in battle. While recuperating, he experienced a spiritual conversion. Reading about the lives of Jesus and the saints made Ignatius happy and aroused a desire in him to do great things. Ignatius realized that these feelings were clues to God’s direction for him.
Over the years, Ignatius became expert in the art of spiritual direction. He collected his insights in his book The Spiritual Exercises, one of the most influential books on the spiritual life. With a small group of friends, he conceived and founded the Society of Jesus (Jesuits) as “contemplatives in action.” (from ignatianspirituality.com)
The Jesuits are arguably one of the most consequential Catholic orders of all time. Their impact on education, evangelization and church leadership (the current pope is a Jesuit) speaks for itself. I have always been intrigued by Ignatius and the concept of “contemplatives in action.” It’s an oxymoron in most business circles (you are either a thinker or a doer), but it’s a driving force in my life.
Prudent Decision Making in Business
Contemplating and acting can be difficult for us as individuals and as leaders of firms. Leaders often fear to look indecisive or to make a mistake when the firm’s future—or their role—is at stake. Firms are filled with competing agendas and decisions carry opportunity costs. Big (and not so big) decisions can threaten long-standing beliefs and stir up emotional upheaval. Leaders may make decisions that are politically expedient, travel the path of least resistance or avoid confrontation. It is very dangerous and often unproductive to take the easy way out or to act without thinking through the ramifications of the decision. If you were to ask most leaders if their decisions were effective, most would answer affirmatively. I have found, while leaders do much thinking and acting, their decisions are not necessarily effective, cohesive or prudent.
Aristotle defined prudence as recta ratio agibilium, “right reason applied to practice.” The emphasis on “right” is important. We cannot simply make a decision and then describe it as a “prudential judgment.” Prudence requires us to distinguish between what is right and what is wrong.
A large part of our work at Prudent Pedal is helping leaders make prudent decisions that drive growth and build long-term success. Building on the thinking of Ignatius, Aristotle, and Aquinas, this is how we think leaders can make better decisions AND achieve better results. According to St. Thomas Aquinas, prudence does three things: 1. To take counsel, 2. To judge soundly and 3. To command their employment (i.e. act).
Three Parts of Prudent Decision Making
Step 1: Take Counsel
One must take counsel carefully from one’s self and others. Failure to deliberate is rashness, which leads to impulsive and ineffective decision-making and confuses activity and action.
We gather the relevant information during this stage, starting with a consideration of our principles. Prudence is about truth: the truth of what is, what is right and what must be done. We must know what is true before we are free to do what is right. This includes awareness and acceptance of our own moral values, our firm’s values and our mission as a firm. If our firm’s culture and mores dictate that a certain act is inappropriate, then there is no need to deliberate; we know not to do it.
While deliberating, we must also carefully examine the concrete situation, to be sure that we fully understand it. Firms often misconstrue anecdotes for data and feelings for facts. So often, we don’t deliberate honestly, but rather focus on the aspects of the situation that we want to see. Prudence demands openness to the whole truth of the situation, including our long-held beliefs, prejudices, and agendas. With this step, it is absolutely critical that we be completely honest about the decision with others and ourselves.
Step 2: Judge Soundly
After deliberating with counsel, we fairly weigh all of the evidence. Judgment separates the relevant from the irrelevant and applies it to the issue at hand.
This is where firms most often stall in making strategic choices. Choices have opportunity costs and firms are loathe to limit their partners and practices or, more importantly, to seed discord. Unfortunately, we can’t contemplate forever; we have to reach a conclusion. Failure to make a judgment is called indecision. Procrastination, perfectionism, and fear of failure are common indecision traps.
Prudence lies in the readiness to sacrifice today’s gain for tomorrow’s greater reward. Our judgments should be guided by optimism, new possibilities, and hope. Prudence is about stewardship and expressed with an attitude of realism, not scarcity or greed.
Step 3: Act
Once we judge the right thing to do, we must act. If we determine the proper action but then fail to implement it, what’s the point? We do not exercise the virtue of prudence until we actually do what we have judged to be right.
Failure to carry out what we believe to be the proper decision is irresoluteness. Most firms make hoards of decisions but never manage to keep them; instead, they swing back and forth like a pendulum. Thinking about an issue without arriving at a practical result does no one any good, but making a decision and then impulsively altering course can create a lack of clarity about direction and values that damages the firm even more. Does “the flavor of the day” ring a bell?
Prudent decisions are not risk-averse, selfish or calculating—quite the contrary.
The first part of prudent decision-making knows the goal; the second part knows how to choose the proper and right means to obtain the goal; the third part acts.
With prudence in the spiritual world, we look at every decision in light of the ultimate goals—goodness and happiness. In the professional services world, we look at it in terms of integrity, service, and fitting results.
Analyze the steps of Counsel, Judgment, and Action in your firm. Identify where your firm does well and where it falls short. Once you recognize the firm’s weakness, you can work on that area of prudence, become a contemplative in action, and grow with purpose.