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The circle of Competence

The circle of Competence

by احمدرضا احرارنژاد / Tuesday, 12 October 2021 / Published in Human resources

No one is to know the world completely. It is too complicated for people’s mind. Even if you are educated only a little of it can be understood. Even that small part plays a significant role for you to reach your goals.










Warren Buffett uses an interesting term to explain this issue: it is called the circle of competence. The circle of competence is a big circle which has a small circle inside. The big circle is what you think you know, the smaller circle which is inside the former one, is your skills (what you really know). Baffett suggests that you need to know your circle of competence and stay committed to it. The size of this circle is not very important, but knowing its limitations is a matter of importance. Charlie Munger also believes that: everyone needs to know his/her talents and uses strength fairly well. But if you insist on staying in situations in which you have weakness and persist on acting same as before, you will face misery and your position in job will definitely get worse in time.

So, try to concentrate on your circle of competence, it causes improvement on both economical and non-economic aspects of your life. If your circle of competence is precisely drawn and your tasks are traced well, you will act better when you face inappropriate, interesting requests.

The important point is that you shouldn’t go beyond your competencies. There is always motivations to go beyond your circle of competence or extend the boundaries. These motivations are strong but you need to resist. Skills do not transfer from one area to another. They belong to one area. A talented chess player is not necessarily a perfect strategist. A cardiac surgeon may not be a good hospital manager…

Now, the question is “how to make a circle of competence?” it is neither something to google, nor to be achieved by academic education. You need to spend time, even be obsessive. That kind of obsession which Steve Jobs had for calligraphy, or the passion Bill Gates had while programming. It is sometimes an engine. The opposite is not hatred, it can be interest, which means “It is not attractive!”

Why the circle of competence is so important? What is the secret? That’s easy. A great programmer is not two, three or ten times better than good programmer. A great programmer solves a problem a thousandth time sooner than a good programmer does it. And it is the same for lawyers, surgeons, salespeople … . The difference is significant here.

There is another issue to mention here. It is a myth that you can control life completely and live according to a settled program. Sometimes a storm of chance complicates everything and only within the circle of competence it becomes a light breeze.

Summary:

  • Don’t blame yourself for your weaknesses. If you are clumsy, don’t try to dance salsa.
  • If you don’t fancy parties or family gatherings, don’t start a restaurant. It doesn’t matter if you are not good or near good in some areas, the things that matter is that in some areas you are great, or even the best. It can be a good basement for a good life. Being great in one thing is more valuable than have some skills or abilities in different things. So one hour in your circle of competence is a thousand time better than hours of hard work in different things.

This post is also available in: Persian

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