Your circle of competence: should you stick within it or step outside of it?
The circle of competence model states that everyone has an area, or circle, of expertise. However, the circle of objective competence may be surrounded by a larger circle of subjective, and often over-inflated, belief in your ability. Should you stick to what you know, or is it wiser to broaden your abilities?
Discovering Your Circle of Competence
A mental model that helps mitigate the risk of failure associated with overconfidence by having a realistic view of your strengths
- To determine your circle of competence, you have to understand where your true competence lies
- Have an honest look at your background, training, qualifications, or personal familiarity in a subject to determine the areas in which you have deep, well-rooted knowledge and experience
Stepping outside of your circle of competence
Chief investment analysts Rusmin Ang and Victor Chng write: “Remaining within one’s circle confers a number of benefits, such as an unfair information advantage, the narrowing of available options, and the reduction of poor decision making.”
- If your goal is to avoid risk, you should stick to your center of competence.
- However, if you want to innovate, step outside so you can come up with non-obvious solutions.
How to Make the Most of Your Circle of Competence
Ensure predictable progress
- Push your boundaries
- Reassess your circle of competence
- The Pareto Principle states that 80% of all output results from just 20% all inputs
- Spend 80%, and 20%, expanding your boundaries and exploring new territories that may feel less comfortable
- Acknowledge your capabilities and strive to expand your horizons
- This model serves to indicate true strengths and expertise while preventing overconfidence