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Your Circle of Competence

True experts recognize the limits of what they know and what they do not know. If they find themselves outside their circle of competence, they keep quiet or simply say, "I don't know."

– Rolf Dobelli

 

Warren Buffet has suggested a nice phrase, “circle of competence,” to represent the idea of investing only in areas or companies where you have understanding or expertise. Areas that lie outside the circle should be avoided.


Image representing the circle of competence

The basic concept has a great deal of value for life beyond investing. Having a well-defined circle of competence might help prevent you from speaking confidently about something you only have surface knowledge about or could stop you from making hasty decisions based on very little understanding.


The trick is not to worry about the size of the circle of competence but instead to know where the boundary is. The real danger lies in the red circle illustrated in the image above—this circle represents where we think we have competence but don't. We want this circle to shrink.

 

Perhaps you’ve acquired a collection of facts from class or a podcast interview with a scientist. For example, your psychology professor tells you that the amygdala has something to do with processing emotion and the hippocampus is related to memory. These bits of info are corroborated by your textbook. Great. But can you really do much more than restate the basic information to a friend?

 

You might be able to answer some multiple-choice questions on the midterm, but you couldn’t conduct a lecture on the topic. You don’t have any real understanding—not enough to know whether what you’ve been told is correct or how scientists might have arrived at such conclusions—and it’s important for you to know that.

 

Despite having collected some information, these areas of the brain remain outside of your circle of competence. Again, the danger is that learning some basic facts can make us feel competent when we're not. That again is the red danger zone in the figure above.

 

Most areas of life hang out here, beyond real comprehension.

 

In the following fictional exchange between a student and a professor, see if you can spot ways the student seems to be speaking outside of his circle of competence:

 

Stu: Professor X, I don't understand why you gave me a D on this paper.

 

Prof. X: Well, as I noted in my written comments, you state your opinions, but you don't offer any reasons to back them up.

 

Stu: Do you mean you gave me a low grade because you disagree with my opinions?

 

Prof. X: No, not at all, Stu. You received a low grade because you didn't give any reasons to support your opinions.

 

Stu: But isn't everyone entitled to his or her own opinion? And can anyone ever really prove that his or her opinion is right and everyone else's is wrong? Why, then, do I have to give reasons for my opinions when I'm entitled to hold them and no one can prove that they're wrong?

 

– This example is drawn from Bassham et al. (2019) Critical Thinking: A Student’s Introduction

 

Stu, unfortunately, seems not to understand the assignment or the nature of opinion but is willing to state his case anyway (Stu thinks he understands). He doesn’t seem to realize that he’s speaking outside of his circle of competence (he's in the red zone of the figure above). Rather than constructively inquiring about his grade, he’s telling his professor how grading and the expression of opinion work.

 

This exchange could go much better for Stu if he had a sense of his circle of competence and acted on it.

 

Though, of course, this would also require that Stu know what he doesn’t know—that he can tell, to some extent, when topics lie beyond his circle of competence. Perhaps, then, the circle of competence is best utilized alongside a disposition of intellectual humility.  

 

For an example of someone exemplifying the intuitive use of the circle of competence, listen to Clearing Thinking podcast interview with Simine Vazire. Simine is the co-founder of the Society for the Improvement of Psychological Science and editor-in-chief of psychology journal Psychological Science. In this interview, she and the host, Spencer Greenberg, discuss scepticism regarding the scientific progress within psychology, considering issues such as fraud and questionable research practices while emphasizing recent changes in the field that are believed to be reducing some of these problems.

 

When you hear the host, Spencer Greenberg, pull the conversation in directions where Simine might have some thoughts but doesn’t have enough evidence or direct expertise, she’ll often say as much instead of attempting to answer the question.

 

Even when speculating, she qualifies her thoughts, like in the following exchange:

 

Spencer: …I'm wondering whether you think some of these really big findings have stood the test of time. Like, for example, on conformity and obedience research, like the famous Milgram experiment and the Asch conformity experiments.

 

Simine: Yeah, I probably shouldn't give a strong opinion without having looked at the evidence. But my guess would be that…

 

Simine seems to have an intuitive tendency to consider the circle of competence—even when speculated somewhat beyond it, she lets the interviewer and the audience know that she’s doing so.

 

While this is nice, it’s appears to be quite uncommon in many corners of the podcasting world.

 

What can help us see through confident talk outside of a speaker's or writer's area of expertise? Well, it’s good to know what the person’s experience and training look like—what do they do for a living and what’s the extent of their education and/or training? Consider, too, how much they admit not knowing. If they speculate and ponder confidently about nearly anything, there’s a good chance they’re not particularly attentive to their circle of competence. Confidence does not equal competence.

 

In short, the idea of the circle of competence can help with our thinking and communication. It can also help us to consider when other speakers are stepping outside of their wheelhouse, thus helping us adjust our level of trust in what they're telling us.

 

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