How do we know what we don’t know and still be better at decision making?
In every field, almost everyone makes decision based on his/her knowledge. The question is: How effective are those decisions based on the said knowledge?
Let’s consider a hypothetical situation: A guy named Steven has lived in a small town called Hallfield for almost his entire life (60 years), he knows almost everyone in the town, their jobs, behavior, attitudes, almost every minuscule detail. He has built this by observing people over a long period of time bit by bit. Now another guy named Matthew enters the town few weeks back, he roams around every street, talks to almost everyone and believes he knows the town. Matthew is convinced he knows pretty much everything there is to know. Now the question arises: What knowledge does Matthew really have as compared to Steven? This question can be answered by the concept called circle of competence. Circle of competence is basically a honest version of the knowledge you possess, where you are lacking and how you can improve. Circle of competence helps us to better understand our reality and hence take better decisions. But there is always a trade-off, where do you stop yourself from acquiring knowledge and go ahead with decision making (how much info is enough?)
But first, how do you decide your circle of competence? In every field, every person has some level of knowledge, how do you then decide how good is your circle of competence? You can ask yourself these questions: a) how quickly I am able to come up with solutions to problems in my field (or even better with alternate solutions) ? b) how effective (good/bad) are those decisions? c) while taking a decision do I always look for extra information, and how much that extra information has been of help? d) am I innately curious about my field e) am I blind to new perspectives (however stupid) they are? These questions will help you form your circle of competence, the key is to be honest with yourself. Only a honest feedback can give you an accurate representation of your circle of competence.
After an honest conversation with yourself you realize your circle of competence isn’t as good as you imagined to be. So what’s next, how do you build a better circle of competence? a) In whatever field you are in, you need to be curious about it and always have a desire to learn. It’s difficult to learn everything personally but you can always learn from experiences of others. b) Keep an honest track record of what you know and what you don’t in detail. Sometimes it’s harder to reflect upon yourself because of your own biases, you can have an outsider perspective to give a honest feedback about you. c) If you are completely new to a field building a circle of competence can be a daunting and an intimidating task. In these cases you can first gain basic knowledge of the field then ask the right questions to experts to get a better understanding into the problem you are tackling. The key here is the right question to ask, how to decide on that? Mental models can serve as a guide here by building a collection of right questions and hence provide path to navigate your way through instead of getting lost. This site had a load of mental model to get started with
