Abstract

Leader wisdom is crucial to effective organizations because it is one of the greatest human capacities. However, understanding what factors impact leader wisdom is still developing. In this paper, we rely on a fear-based view of wisdom and empirically examine through a quantitative study of 249 leaders if one of the primary regulators of human behavior (fear) is positively related to wisdom. We are specifically focused on the role of fear of failure and wisdom. Additionally, because we recognize that fear has a negative connotation and has a tipping point regarding leader effectiveness, we propose that psychological empowerment serves as a coping mechanism for fear and mediates the relationship between fear of failure and wisdom. Through structural equation modeling (SEM), we demonstrate that fear of failure does positively impact leader wisdom and that this relationship is mediated by psychological empowerment. This study contributes to the literature by advancing the fear-based view of wisdom which unites two of the most powerful concepts in human history: fear and wisdom. Although wisdom has a resurgence of interest in business literature, fear is not given much attention. By theoretically and empirically linking fear of failure with wisdom, we shed light on how fear is an important motivating mechanism. The study also contributes to practice by suggesting leaders should fear failure and avoid minimizing fears to be wise.