Leiden Law Blog

It all starts with Aristotle

It all starts with Aristotle

In an earlier blog, I inquired into the parallels between Aristotle’s virtue ethics and modern theories on management and corporate governance. My conclusion was that much of modern thought on good governance is basically a reiteration of classical virtue ethics. In this blog, I will go into detail on why this holds specifically true for the virtue of phronesis, which translates roughly as practical wisdom. I will lay Simon Sinek’s theory of the ‘golden circle’ in his book ‘It all starts with why’, alongside Aristotle’s virtue of practical wisdom or phronesis and ‘compare notes’ if you will.

As Sinek states, many modern organisations do not really operate from a clear vision or mission statement. They rather focus on ‘what’ or ‘how’, instead of basing their decisions on a meaningful and coherent ‘why’. Tech giant Microsoft for example, seems to focus primarily on selling operating systems and office suites. In addition, Microsoft hosted the popular chat service MSN for many years, to consecutively pull the plug at the very peak of its popularity. Also, Microsoft paid billions to take over the once popular Finnish cell phone manufacturer Nokia, apparently to use the Nokia brand to boost its own operating system for smartphones Windows Phone, only to consecutively replace the brand name Nokia with its own name Microsoft, just a few months later even abandoning the Windows Phone entirely.

It is hard to recognise any unambiguity or consistency in Microsoft’s strategy choices. Market analysts have thus far failed to explain what Microsoft really envisions for the long term. There seems to be no clear and unambiguous ‘why’. This is a huge difference from its competitor Apple which has, at least until recently, always had a clear long term vision, enabling it to maintain a very strong market position. When was the last time people stood in line at 3 A.M. to get the latest Windows Phone 950?

As Aristotle states at the very outset of the first book of his Nicomachean Ethics, every human action ultimately aims for the realisation of a superior goal. He makes the equation with an archer who aims for a specific target, and gives some examples of crafts and sciences that aim for the realisation of an aim that corresponds with that craft or science (stating that political science is aimed for organising the entire state and all other sciences and is therefore the highest science). If one has a clear aim in mind, one will be all the more capable of finding the means that are best suited to realise that aim. And that is exactly what the virtue of practical wisdom or phronesis is all about. A good archer is one who knows exactly what he is doing and where to aim. A good statesman or entrepreneur is an excellent leader who knows exactly how to govern a country or organisation.

Microsoft might make better and more inspired strategic choices if it had a clear, unambiguous and steadfast purpose in mind when doing so. Sinek states in ‘It all starts with why’ that prudent choices and good governance start with the overarching purpose, the ‘why’, to consecutively come up with a fitting ‘what’ and ‘how’. For Microsoft that might mean coming up with a ‘why’ such as that which its founder Bill Gates stated in the early eighties, i.e. personal computing being available for everyone, “on every desk and in every home”. Starting with this ‘why’, a choice might then be made whether or not to develop an operating system for smartphones, only then coming up with the best practical way of realising that goal (e.g. whether or not to take over Nokia).

Simon Sinek calls his theory on good governance the theory of the “golden circle”. Aristotle also knew what good governance is all about but called it differently, namely practical wisdom or phronesis. What one calls it is just a semantic issue and nothing more. It becomes once again clear how modern thought on legal philosophy and corporate governance can, in fact, be traced back to classical virtue ethics.

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