Smart vs. Intelligent: Why We Need Deeper Leadership

We hear about “smart leaders” all the time. They’re good at reading the room, mastering corporate politics, riding cycles in growth or downturns. But what we don’t hear enough about is intelligence—deep strategic thinking, foresight, building teams that last.

I believe the workplace has too many leaders who are “smart,” but far too few who are truly intelligent. I want to show you data that backs this up, explain where I think the decline is coming from, and argue why intelligence should be a frontline expectation for leadership.

I think the decline in intelligent leadership comes from 2 main places: MBA-ification of leadership, and the almighty shareholder value. Together, these create a mismatch: we reward “what looks smart” (credentials + quick wins) without ensuring “what is intelligent” (sustained growth, team strength, adaptability).

MBA Graduates: Strong Credentials, Mixed Outcomes

Let me be clear: education matters. I have my master’s degree and value what I learned. My wife and I teach our kids the importance of education and continual learning, both formal and informal. But when I went for my graduate degree almost 20 years ago, I had to prove that I was ready. I needed to show years of leadership and real-world work experience.

Today, you can go straight into an MBA without any experience. Sure, you usually have internships, but most of those are 8-12 weeks of surface exposure to corporate life, not actual leadership or work experience. You fetch coffee, shadow some people, and learn to do it the “company way”. Then you go back to school and learn from textbooks and professors’ fixed expectations. By the time you graduate, you might have a credential, but you don’t have context.

The result of this is that we get MBAs joining companies to run important programs that they have never lived through. And when things go grow, or go the way they did in their textbooks, blame rolls downhill to the very people who raised concerns and had the experience to ask for clarity.

And I can back this up- according to How MBA Programs Make Great Leaders and How They Fail (Fortune, 2016), MBA grads generally outperform undergrad business degree holders in traditional business skills like financial analysis, but fall short in people leadership skills, emotional intelligence, ambiguity tolerance.

That’s because a degree gives you information, but it does not prepare you for leadership when it comes to building resilient and scalable teams or processes or dealing with ambiguity and human beings- internally or externally.

The Shareholder Value Myth

In 1970, Milton Friedman championed the shareholder value model. He made the argument that the social responsibility of any good company was to increase profits. And while a business cannot survive without making a profit, setting this as the goal has created a “do it at any cost” mentality in investors and business leaders. It ripped long-term thinking out of the operating model and replaced it with short-term-knee jerk reactions.

By pushing growth at all costs, then scrambling to sustain it, companies have created reactive leadership where the focus is on fast hires and fast growth that ultimately lead to fast cuts and fast irrelevance. The average company last fewer than 15 years now, versus over 75 years pre-Friedman. Leadership are now responding to cycles, rather than building for durability.

A 2022 article from CSIS has also shown that the ideology of maximizing shareholder value has been linked with broader negative effects on innovation ecosystems and governmental competitiveness when companies choose short gains over long investments.

In fact, a 2024 study, “The Short-Termism Trap: Catering to Informed Investors with Limited Horizons”, shows that when firms are pressured by investors who demand quick returns, those firms begin favoring shorter-term projects. This creates a “race to the bottom” in terms of project maturity, hurting long-term value creation.

What Intelligent Leadership Actually Looks Like

Based on both data and what I’ve seen working and failing in organizations, here are hallmarks of intelligent leadership. These are not just “good aspirations”, but they align with what evidence suggests helps companies endure and innovate.

The Call to Recover Intelligence

Smart gets leaders to the middle. Intelligent gets them to legacy.

Right now, companies are full of smart people. People who know the internal code, who read frameworks, who hit short-term KPIs. But too many of those leaders are not building what lasts. They hire when the money’s flowing, lay off when it dries, lean on textbook solutions, and ignore the natural hum of the organization. And all of this is done under the veneer of productivity.

But we can bring back intelligence in leadership. Actually, we need to bring it back, because the data proves that focusing on short-term gains costs long-term value and that all the credentials alone won’t prepare leaders for complexity. Most importantly, the data screams at us that companies are forgetting people, culture, and cycles and are getting whiplash more often.  

If you are a leader, here are some immediate shifts:

• Question hiring/layoff cycles. Before rushing to staff up, build plans for sustainable teams. Ask what do you do in downturns? How do you grow without over-promising? How do you keep enough slack or cross-skill so you don’t collapse when growth slows?

• Measure what matters over years. Adopt metrics and incentives that don’t just reward the next quarter, but 2-5 years down the road. Things like product stability, talent retention, team health, employee engagement, even churn rate and usage.

• Value experience more. When promoting or hiring leaders, weigh actual experience over resume bullets. Book knowledge plus battle scars is a powerful combo.

• Develop the human layer. Invest in EQ, coaching, and feedback. Give people career paths, listen to front-line voices, and compel leaders to build psychologically safe environments.

We cannot keep confusing smart with intelligent. We can’t afford to. Smart will get you tactical wins, but intelligent will build the kind of company that lasts, and that people want to work for.

The data backs it: short-term focused incentives cut long-term returns, shareholder value ideology comes with massive negative tradeoffs, and MBA-only hires often underdeliver where it matters most. What’s demanded now is leaders who merge the sharpness of being smart with the wisdom of being intelligent.

It’s time to hold leadership to a standard higher than “it looked good this quarter.” We need leaders who don’t just react to cycles but anticipate them and build teams to withstand them. It’s time to bring intelligence back into he workplace as the standard for leadership.