Three Lessons Leaders Can Learn From Philosophers

Philosophers like Socrates, Aristotle, Plato, and the Stoics are considered some of the most influential people in human history. Their ideas have survived for thousands of years. How does that happen? How can someone’s thoughts be discussed for hundreds or even thousands of years after they first wrote them or taught them to others???

These ideas must?have?incredible power. And perhaps human nature hasn’t changed much over time. We all deal with similar challenges, on a fundamental level, as?those of?our ancestors. We stress?about an unpredictable future, we struggle with relationships, and we yearn for?some?vision?of?happiness?that?almost never?seems to be?found?in the present. The human condition if you will.??

On the surface, many philosophical texts sound theoretical and abstract. They’re expressed in obscure, dated language. But if you pay attention, and you read how gifted modern writers like Ryan Holiday interpret these texts, you’ll find that these ideas can be useful in your everyday life.?

Most of us?learned?about?Plato, Socrates, and Aristotle?at some point in school. Then we?forgot?about them.?But?if you think about concepts like?the dialectic method (systematically looking at both sides of an argument)?or Socratic questioning (discovering insights by asking questions), these are useful skills?for?business?today.??

In my adult life,?I’ve read more about the Stoics?(Marcus Aurelius, Epictetus, Seneca, and others)?than about?the?classic?Greek philosophers.?The Stoics focus?on mindfulness and resilience.??

People often?misinterpret?Stoicism as?the?idea that you should?become immune to pain. That’s not the?point.?To become immune to pain, physical or?emotional,?is impossible. Stoicism?is?about learning how to?handle?yourself when you face challenges. When you face a difficult situation,?you?should:?

• Recognize?that your perceptions play a role in how you react.??
• Differentiate?between?what you can?and?can’t control.??
• Seek to?turn?obstacles?into opportunities.??????

I wonder why?Stoicism is?not taught in school. It’s a practical philosophy.?The?Stoics were “practitioners” more than “academics,” to use financial industry lingo. Marcus Aurelius was emperor. That’s a big job.?He didn’t write from the ivory tower of academia.?He?ran?the Roman Empire.?

In fact, I?see direct links?between Stoicism?and?our?investment process.?For example, in Q1 2020, it was difficult to keep our cool as markets were selling off. But?we took?a?long-horizon perspective?(a?Stoic teaching),?kept our emotions in check?(also a?Stoic teaching–the power of perceptions), and?stuck to our investment principles, all of which culminated in a series of decisions to buy?billions of?dollars’ worth?of?stocks around the bottom. We didn’t time?the bottom?perfectly, and it was stressful.?But since then,?stock?markets have rallied ?and?our clients?are happy?that we turned this market obstacle into an opportunity.?At T. Rowe Price, I’m lucky to work with some of the best investors in the world.?Observing how they think and how they invest, I?am?tempted to conclude that?all?good investors are?Stoics.???

Let?me?go one step further?and?hypothesize that all?leaders?can learn from philosophers. Here are?three?tips I extrapolated from?philosophy?that I believe can be valuable for today’s leaders navigating modern-day professional challenges.??

Leadership Tip #1: Recognize the Power of Perception?

The Stoics?teach us that our happiness and productivity often?depend?on our perceptions of what happens to us, rather than actual events. A difficult conversation, a drop in investment performance, or?a?setback on a project can impact your well-being—but only based on how you interpret the situation. The next time something upsetting happens to you, ask yourself if your reaction is based on your perception?of the event or the event itself.??

This also applies in the investing realm. If, as investors, we control our response to market fluctuations,?we will?be more likely to be able to make rational decisions about what to do and when.??

“You have power over your mind—not outside events. Realize this, and you will find strength.”? Marcus Aurelius??

Stoicism is not about ignoring pain, or some na?ve notion that you can always control your emotions. It’s?truly?about recognizing the role?that?perception plays in your well-being and about accepting what you can and?can’t control.?Very often, things happen that you can’t control, but you have control of how you react to them. Simply being mindful and observing your reactions will build resilience.??

Leadership Tip #2: Ask Questions?

From the ancient Greeks, we have learned that the path to both acquiring knowledge and teaching others is often through questions. Questions are a wonderful way to connect with people and develop insights?collaboratively.?One of the reasons I admire our CEO,?Bill Stromberg,?is?that?he possesses both investment acumen and people leadership skills. Every time I meet Bill, he has thoughtful questions prepared for me.??

In his book?Quiet Leadership?(2007), Dr. David Rock, an expert in the neuroscience of leadership, explains that questions can be a powerful way to coach senior, high?performers:?

“Letting people come up with their own ideas is a deep well?of motivation to tap,”?Rock writes. ??

To which he adds:??

"Anytime a person wants your help,?unless it’s just a password they’re after, they could benefit from coming up with the answer themselves."

He’s not saying that?you?shouldn’t help people.?Rather, he’s arguing that the best way to?coach?someone?is to ask questions.?You should?guide?their?thinking?toward discovering their own insight.?Rock calls it “dancing towards insight.”?Socrates would be proud.??

Moreover,?when you ask questions, you?benefit too. You show humility.?In doing so, you set a foundation for personal growth.?While insecure leaders may hesitate, good leaders are never afraid to ask questions.?I’m not a fan of overused quotes, but here I’m going to break my own rule:?As?Socrates said,??

“I know that I am intelligent, because I know that I know nothing.”??

And since I’m already?drawing on overused quotes, here’s another one from Steve Jobs:??

“It doesn't make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.”?

Leadership Tip #3: Focus on Purposeful Action?

Almost?2,000 years ago,?Seneca wrote:1

“Floods will rob us?of?one thing, fire of another. These are conditions of our existence which we cannot change. What we can do?is?adopt a noble spirit, such a spirit as befits a good person, so that we may bear up bravely under all that fortune sends us and bring our wills?into?tune with nature’s.”??

The trademark of great leadership?is not to rush?in, not to be rash, and not to let?your emotions dictate?your thinking. Life?is unpredictable, so?your responses must be measured and purposeful. Thinking long-term, managing risks, preparing for the worst, and staying the course?in the face of adversity are all principles embraced and promoted by the Stoics.?

Going back to the example?I?used earlier about how Stoic principles apply?to?T. Rowe Price’s?investment approach,?I?like to think of Seneca as the father of risk management. He once said,??

“The?[person] who has anticipated the coming of troubles takes away their power when they arrive.”?

We?frequently?run stress?tests on our portfolios.?As?I?explained?in my book?Beyond Diversification?(2020),?our?risk models?tell?us how?each of our portfolios, and each of the positions within those portfolios,?would perform should another 2008 crisis occur, for example. We also simulate hypothetical scenarios,?based on forward-looking views.?

Purposeful action?is not just about preparing for the worst.?It’s also about planning?for long-term success. Organizations that establish?a?strategic plan?become?resilient to short-term setbacks.?And they?make time for?projects?that are?important but not urgent. These types of projects are often those that?confer?organizations?their?competitive advantage?(for more on this concept, see Stephen Covey’s bestseller,?The 7 Habits of?Highly Effective People,?2004).2

As a leader, you must establish a long-term vision. A few years ago,?I?attended a leadership training seminar.?To emphasize the?importance of purposeful action, the moderator asked us to write?what success would look like?five years from now?in the form of a company press release.?Can you write this press release for your organization???

Of course, you don’t want to become too rigid about long-term?goals. Competitive conditions?can?change?rapidly. Successful organizations?establish?long-term goals, but they also?recognize when?it’s time?for a strategic pivot.?As a leader, or as an?investor, you?need to?know the difference between?the?short-term noise you should?ignore and what,?in my?business,?we call a “regime change.”?It’s not easy,?but?who said?it would be??

Lessons from?philosophers?can?also?be useful?in everyday life.?When my son Charlie finished lower school, his sister and?I?went to the mall to buy him a present. We found this clock with a wonderful quote on?it.?I?hope Charlie will?internalize?it for life.?It speaks to something?I’ve written about on LinkedIn before: the power of habits. Small daily habits can be much more powerful than one-time grand efforts or gestures.?The quote?is?from Aristotle:??

“We are what we repeatedly do. Excellence,?therefore,?is not an act, but a habit.”?

And as?I?write this article,?I’m using only my right eye.?I?just had a minor procedure done to remove a persistent stye from my eyelid. I’m?feeling?irritated and uncomfortable. Can?I?do anything about?it? No. Can?I?accept?it and try to keep my mind occupied, nonetheless? Yes.?I?suppose there’s a bit of Stoicism?in that.??

1Seneca, Letters?From?a Stoic, c. 65 AD, available?in multiple translations and from multiple publishers.?

2Stephen R. Covey, 2004, The 7 Habits of Highly Effective People: Powerful Lessons?in Personal Change, Free Press; Revised edition (November 9, 2004).?

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