When I was first interested in the business field, there was only one thing on my mind; learning everything. If I didn’t know every aspect of finance or marketing, I considered myself a failure. If there was a concept I did not get or was not good at, I would spend constant hours trying to figure out and perfect it. While this may seem like a great habit that shows passion for entrepreneurship and business, the truth is that this mindset is a hindrance. I would have constant stress about what I did not know and what I could have been learning if I was ever occupied with some other activity. Brute forcing and attempting to figure out everything in a certain field is never the best option. So, what could I have done better in order to manage my stress and become more knowledgeable in the business field? Out of the many solutions, sticking to your Circle of Competence is a great way to break out of this bad habit.
In the simplest of terms, a person’s circle of competence represents what skills they are good at. Someone’s circle of competence may include:
- Marketing
- Finance
- Product Management
- Human Management
- Product Development
- Exercise
- Soccer
Quite literally any skill can be in someone’s circle of competence. There can also be multiple skills in a circle of competence. However, the maximum number of major skills in a circle of competence should be two to three, and three is still stretching it.
A mistake that a multitude of people make is overestimating the size of their circle of competence. What can happen is that people will put a lot of research into a certain topic for a few days or weeks. Since they learn so much in so little time, they get this illusion that they have already mastered the topic. This leads to them thinking they know way more than they actually know, which can also be described as overestimating the size of their circle of competence. It is important to not fall into this illusion of severely overemphasizing knowledge that you do not have. This sense of overconfidence will hinder you in the future when you try to use the skill, and inevitably realize that you were not as smart as you thought.
There are other actions that can lead to someone overestimating the size of their circle of competence. However, the main goal is to spend most of your time and resources on a few vital skills, and attempt to master them. Then, stick with those skills throughout your career, and keep improving them along the way. There is not a single CEO that is a complete master of finance, marketing, product development/management, etc. CEOs master a few skills, and delegate the rest of the tasks to employees. Afterall, if CEOs could effectively master every part of running a business, there would be no point in hiring employees.
As a final note, it is still important to always slowly expand your circle of competence. Just because having a few areas of expertise is the best for overall performance does not mean that you have to stay away from learning other skills. Curiosity is one of humanity’s strong points. Wanting to learn about something new everyday is normal, and even a good thought. The point is to allocate most of your time to a certain few skills, while still being curious about other topics and becoming more knowledgeable throughout your life.
In the end, remember to stick to a select one or two skills in life for success in both business and life as a whole. However, never forget to stop learning everyday and enlarging your circle of competence. Never be afraid to make mistakes and not know different concepts.