Let’s talk about the mental model Circle of Competence.

Here’s how it works, why it’s important to understand, and three lessons you can use today.

You’re not an expert in everything. However, through experience or study, you’ve probably built up useful knowledge in certain areas of the world.

A quick test of where you have knowledge and where you don’t is can you differentiate between what’s knowable and what isn’t in that field and can you separate what matters from what doesn’t.

Can you answer the next question?

While anyone can get lucky once, it takes real knowledge to be consistent. Nothing that’s unknowable can be in your circle of competence.

While you might be a successful entrepreneur, your ability to determine future interest rates is not in your circle of competence because this is unknowable. However, you likely have a solid grasp of what matters and what doesn’t when it comes to running your business.

You rarely get into trouble operating in areas where you have deep fluent knowledge. Operating outside of these areas, however, means you’re taking more risks than you know.

There is no shortcut to understanding. Building a solid understanding of what’s knowable and what’s not and what’s important and what isn’t, takes years of experience and lessons learned. Watching a YouTube video on how to fix a toilet does not make you a plumber.

You have an edge over others in certain areas. When ego and not competence drives our actions, we run into trouble. Competence in one area does not mean competence in another.

Lesson one: Understand where you have an edge and where you don’t. The size of your circle is less important than understanding its boundaries. Here it helps to have a relentless focus on outcome over ego and an easy willingness to say, “I don’t know.”

Lesson two: If you play games where others have an advantage, you’re going to lose. When outside your circle of competence, find someone for whom that is their circle of competence.

Lesson three: If you have to make a decision outside of your circle of competence and can’t hire or find someone for whom that is their circle of competence, invert the problem and just try avoiding bad outcomes.

One final counterintuitive implication.

People spend a lot of time on unknowable things. For better source material, learn to identify where other people have an edge and where they don’t and focus on listening closely where they have an edge and ignoring everything else.

You’re smarter in some spots than others. You can’t keep up with everything. It’s ok to be knowingly ignorant. The more you understand the spots where you hand and edge and where you don’t, the better your results.

If you want more practical ideas for using mental models to think better, check out #TheGreatMentalModels V1: General Thinking Concepts.

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