What you know and what you think you know
Imagine an old man who’s spent his entire life up in a small town. He’s the Lifer. No detail of the goings-on in the town has escaped his notice over the years. He knows the lineage, behavior, attitudes, jobs, income, and social status of every person in town. Bit by bit, he built that knowledge up over a long period of observation and participation in town affairs.
The Lifer knows where the bodies are buried and who buried them. He knows who owes money to whom, who gets along with whom, and who the town depends on to keep spinning. He knows about that time the mayor cheated on his taxes. He knows about that time the town flooded, how many inches high the water was, and exactly who helped whom and who didn’t.
Now imagine a Stranger enters the town, in from the Big City.
Within a few days, the Stranger decides that he knows all there is to know about the town. He’s met the mayor, the sheriff, the bartender, and the shopkeeper, and he can get around fairly easily. It’s a small town and he hasn’t come across anything surprising.
In the Stranger’s mind, he’s convinced he pretty much knows everything a Lifer would know. He has sized up the town in no time, with his keen eye. He makes assumptions based on what he has learned so far, and figures he knows enough to get his business done. This, however, is a false sense of confidence that likely causes him to take more risks than he realizes. Without intimately knowing the history of the town, how can he be sure that he has picked the right land for development, or negotiated the best price?
After all, what kind of knowledge does he really have, compared to the Lifer?
The difference between the detailed web of knowledge in the Lifer’s head and the surface knowledge in the Stranger’s head is the difference between being inside a circle of competence and being outside the perimeter. True knowledge of a complex territory cannot be faked. The Lifer could stump the Stranger in no time, but not the other way around. Consequently, as long as the Lifer is operating in his circle of competence he will always have a better understanding of reality to use in making decisions. Having this deep knowledge gives him flexibility in responding to challenges, because he will likely have more than one solution to every problem. And this depth increases his efficiency—he can eliminate bad choices quickly because he has all the pieces of the puzzle.
What happens when you take the Lifer/Stranger idea seriously and try to delineate carefully the domains in which you’re one or the other? There is no definite checklist for figuring this out, but if you don’t have at least a few years and a few failures under your belt, you cannot consider yourself competent in a circle.
Farnam Street (FS)