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From the Archives | Your Bubble of Competence
Sir Arthur Conan Doyle created Sherlock Holmes. Surprisingly, he was fooled by two schoolgirls who claimed to have photographed fairies frolicking around the park. Einstein came up with the equation of mass-energy equivalence. He also wasted the last 25 years of his career with a string of embarrassing failures. His Princeton colleagues started avoiding him as he knowingly ignored experiment results and well-known facts. Thomas Edison had more than 1000 patents to his name but he waged a misguided war on alternating current even though he knew he was wrong. Steve Jobs spent his final years trying quack cures, spiritual healing and fruit juices in his quest to cure Cancer. How is it that such smart people made such foolish choices?
In his book The Intelligence Trap, David Robinson explains that no one is universally smart. We all operate in our bubbles of competence. Being smart or gifted doesn’t make us immune to biases. In fact, it can magnify them. Doyle started dabbling in his extra-terrestrial adventures at the same time he created Sherlock Holmes. He used his intelligence to come up with creative arguments to dismiss his skeptics and justify his whacky beliefs.
Let’s explore the contours of motivated reasoning, the technique Conan Doyle used to outsmart himself. It is an emotionally charged, self-protective use of our minds that takes two distinct forms. First, we preferentially take seek and remember information that confirms to our view. Second, we tear down reasonable, alternate arguments and become entrenched in our own cherished opinions. Smart people like Edison, Doyle and Einstein are particularly prone to this aspect of motivated reasoning called disconfirmation bias.
That’s why I think there is a fundamental flaw in how we measure intelligence. Colleagues we refer to as smart tend to have high scores in standardized tests, demonstrate good abstract thinking and are known for effortless logical reasoning. We admire them and start relying on their judgment without questioning. That’s where trouble begins.
Intelligence, in its narrow sense, has a modest correlation with rationality. A study published by London School of Economics Found that people with higher IQs tend to consume more alcohol or maybe more likely to smoke or take illegal drugs. Obviously, it doesn’t mean that if you drink and smoke a lot, you have high IQ, but it does imply that smart people often make unsmart decisions.
Karen Ho’s Ethnography of Wall Street analyzed behavioral patterns and decision making frameworks of investment bankers during the 2008 financial crisis. If anything, the higher collective IQ of Wall Street left the world worse off.
Bertrand Russel famously said that the cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt. I feel such pronouncements can be thoroughly confusing at work. It incorrectly assumes that people are born stupid or smart.
Cognitive psychology’s Dunning-Kruger effect states that confidence and competence have a complicated relationship. It was inspired by the case of McArthur Wheeler who tried to rob two banks in broad daylight. He was genuinely perplexed on being caught. Turns out that he believed that a coating of lemon juice would make him invisible in the CCTV footage. Unsurprisingly, the Dunning-Kruger effect is often used to explain why incompetent people have delusions of grandeur.
However, there is a silver lining. Turns out that education and training improve not only our knowledge but also metacognition and self-awareness. It doesn’t mean that reading a few books on relativity will make you an Einstein, but it does suggest that with increased self-awareness, you have it you to stumble upon your bubble of competence. With perseverance and the right kind of exploratory support, you can transform perceived incompetence into competence you truly care about.
Intelligence is a discovery challenge. Your colleague who is lost during sales calls could be a genius in programming. Instead of mentally branding him as stupid, help him discover his bubble of competence. On a different day, in a different context, he will do the same for you.
Key Takeaways
1. No one is universally smart. We all operate in bubbles of competence
2. Intelligence has a modest correlation with rationality
3. Confidence and competence have a complicated relationship
4. Education and training improve knowledge and self-awareness
5. Intelligence is a discovery challenge
Your Network Capital Team