Circle of Competence

Circle of Competence - Mental Models Series -2

"I’m no genius. I’m smart in spots and I stay around those spots.”- Tom Watson ,the founder of IBM 

When you don't know what you are doing, you are most likely to make mistakes. This is a no brainer but still most people don't get it and fall for their ego.

Eminent Investor Warren buffet popularized this Term ,Circle of competence. It is about knowing the boundaries of your knowings, 
                                    of your capabilities, 
                                    of your talent, 
                                    its all about what you know(inside your comfortable zone) 
                                    and what you don’t know(outside your comfortable zone).

For ex: You can be a frequent flyer and someone who traveled quiet extensively.With some effort you can understand explain what works for  airlines industry .But if you are asked to explain the mechanics of a aircraft, Unless you are an aircraft engineer by profession,your mind will draw a blank. Correct? 

Once you identify what you know ,what you are just familiar and what you don't know then only the real seeking of knowledge will begin.

Edge of the Circle :-

Lets say you are holding a  Masters degree in accounting and you are a practitioner. Then your CoC is accounting. Also your family is in Furniture business for generations and you have good knowledge of the business . So this also lies within your Circle of Competence. your circle of competence need not come from formal education.

It is absolutely critical to know  the boundaries of your Circle of competence. Warren Buffet quips that  knowing where the perimeter of your Circle of Competence may be is far more important than the size of your circle. 


How to expand this Circle Of Influence:-

 Charile Munger, Warren's best friend and business partner suggested the following-

"Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Systematically you get ahead, but not necessarily in fast spurts. Nevertheless, you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day – if you live long enough – most people get what they deserve.”

He goes on to say -

“You don’t have to pee on an electric fence to learn not to do it. Learning from other people’s mistakes is much more pleasant. The best way to do this is simple:  When in doubt, read so you can learn vicariously.”


More on this - from Farnam Street blog

Footnote -
What are Mental Models ?
“It’s your mind’s toolbox for making decisions. The more tools you have, the more equipped you are to make good decisions. “
A mental model is an explanation of how something works. It is a concept, framework, or worldview that you carry around in your mind to help you interpret the world and understand the relationship between things. Mental models are deeply held beliefs about how the world works. 

For More , read https://jamesclear.com/feynman-mental-models  

Map is not the Territory

The Map is not the Territory - Mental Model Series -1

 "Everything simple is false. Everything which is complex is unusable."-Paul Valéry

Will you confuse a menu with a meal or road map to a road?- The topic is as simple as this.But understanding this will have profound impact on you.

Maps are the simplified representation of the territory created for certain purpose. The purpose can be  academics, driving, or biking e.t.c..  They are all telling their truths about the area but if you think of it , they are all also incomplete as well.Each map is only a portion of what the real area is.

Let us try to explain this in a different way , 

Imagine you were at a street  and waiting for your friend to arrive .Suddenly a street performer started with his performance . You found it was wonderful. Few moments later, your friend had arrived and you attempt to describe the performance . No matter how good you were with your description , it would never going to be the exact representation of that wonderful performance. your words here are the map. The performance is the territory. Let us continue with this example. At the exact same time when the performance was about to start, there was another person in the same location .Since he was on the phone and he might find the performance rather annoying because he could not continue his conversation. As you can see, Same performance was seen differently by different people. I think you get it now .

So.Models and maps are at best can approximate the actual experience or the actual world that is being examined . But you must keep in mind that actual territory is beyond verbal description.

Our take -

In conflicts, petty arguments  and big fights , people argue based on the their own maps but they fail to realize or remember that each one of  us will come with our own maps which are different from others. 

So remember this, No map is ever completely True. Suggest you  take your thoughts with a grain of salt and become curious about them and try to improve them all the time . Because even territories are dynamic like a river. 

Happy learning!!✌.

Footnote -
What are Mental Models ?
“It’s your mind’s toolbox for making decisions. The more tools you have, the more equipped you are to make good decisions. “
A mental model is an explanation of how something works. It is a concept, framework, or worldview that you carry around in your mind to help you interpret the world and understand the relationship between things. Mental models are deeply held beliefs about how the world works. 


For More , read https://jamesclear.com/feynman-mental-models  

Ten Big Ideas

Ten Big Ideas that changed your life?- Brent Beshore Tweeter thread.

1) Imago Dei: Every person is inherently valuable independent of behavior and beliefs. Everyone matters. Treat people accordingly, without exception.

2) Rationality: In the moment, people act rationally, always. The question is what information, preferences, time horizon, and biases came into play? Removes ability to write-off people/behavior. Forces learning and empathy.

3) Meaningful = Hard: If something worthwhile appears easy, it means I got lucky. Or, I've never done it. Crucial to setting opportunity costs, evoking gratitude, suppressing envy, and cheering others on.

4) Base Rate: The average of how others do is the mostly likely indicator of my future performance. I want to get into situations where the base rate is attractive.

5) Messy: Life is messy. People are messy. Business is messy. Relationships are messy. I’m messy. Messiness should never be surprising. Give myself and others grace.

6) Margin of Safety/Redundancy: Stuff happens. Expect it and be prepared. Applies to virtually every area of life and far beyond investing — engineering, organizational operations, relationships, health, personal finances, etc.

7) Serving vs. Served: The great paradox of life is self-sacrificial service. More I give, with no expectation of reciprocity, the better life goes for others and me. Counterintuitive and countercultural.

8) Non-Linearity: I expect orderly, sequential outcomes. I get compounding, with unexpectedly positive and negative outcomes. Expect the unexpected. Get better at ball-parking nonlinear results.

9) Forgotten: In 100 years, no one will know my name. And certainly, no one will know me and I won’t know them. Living for fame and recognition is like chasing the wind. I try re-read Ecclesiastes monthly.

10) Invert: Avoiding failure is a heck of a lot easier than trying to be successful. Understand predictable points of failure (probability + magnitude) and plan against them. And don't worry, failure will still come often.

Reinvent yourself - James Altucher Twitter thread

Reinventing Yourself: By James Altucher(@jaltucher)- (from his tweet thread)

1. Reinvention Next Stops - every day YOU DECIDE forward to backward

Reinvention starts from scratch. no labels. Ivy league? You lost millions? You were a champ? Nobody cares. You're a zero.

2.You need a mentor:

3 types of mentors: Direct: someone you work with who helps you correct mistakes. indirect: someone you admire and want to emulate. virtual: someone you read about. many you read about.

don't worry if you don't have a passion for anything - you have a passion for health. a passion for transformation. start with that. more passions will come.

3.Time it takes to reinvent yourself: five years.

Here’s a description of the five years:

Year One: you’re flailing and reading everything and just starting to DO.

Year Two: you know who you need to talk to and network with. You’re Doing every day.

Year Three: you’re good enough to start making money. It might not be a living yet.

Year Four: you’re making a good living

Year Five: you’re making wealth

Sometimes I get frustrated in years 1-4. I say, “why isn’t it happening yet?” That’s okay. Just keep going. Or stop and pick a new field. It doesn’t matter. Eventually you’re dead and then it’s hard to reinvent yourself.

If you do this faster or slower than five years then you are doing something wrong.

4.It’s not about the money.

But money is a decent measuring stick.

Q:“What about just doing what you love?” 

There will be many days when you don’t love what you are doing. The entire idea of improvement is there will be many unpleasant days you will fail and be miserable

Happiness is just a positive perception from our brain. Some days you will be unhappy. Our brain is a tool we use. It’s not who we are. Reinvention is not about happiness. It's about always knowing "who am i", "why am I", "why now"

Q:When can you say, “I do X!” where X is your new career?

Today.

Q:When can I start doing X?

Today. If you want to paint, then buy a canvas and paints today, start buying 500 books one at a time, and start painting. If you want to write do these three things:
Read
Write
Repeat,

Q:How do I make money?

By year three you’ve put in 5,000-7,000 hours. That’s good enough to be in the top 200-300 in the world in anything. The top 200 in almost any field makes a living. By year 5 you will make wealth if u r truly improving 1% a day

What is “it”? How do I know what I should do?

Whatever area you feel like reading 500 books about. Go to the bookstore and find it. If you get bored three months later go back to the bookstore. Or study your instagram and see what you love taking pictures of? Or...

List what you loved at age 13 and figure out how it has aged.

It’s okay to get disillusioned. That’s what failure is about. Success is better than failure but the biggest lessons are found in failure.

Very important: There’s no rush. You will reinvent yourself many times in an interesting life. 

Many reinventions make your life a book of stories instead of a textbook.
Some people want the story of their life to be a textbook. For better or worse, mine is a book of stories.

The choices you make today will be in your biography tomorrow.

Make interesting choices and you will have an interesting biography.

Q:What if I like something obscure? Like biblical archaeology or 11th-century warfare?

Repeat all of the steps above, and then in year five you will make wealth. We have no idea how. Don’t stress to find the end of the road when you are still at the very first step.

Q:What if my family wants me to be an accountant?

How many years of your life did you promise your family? Ten years? Your whole life? Then wait until the next life. Choose freedom over family. Freedom over preconceptions. . Freedom over people-pleasing. Then you will be pleased.

Q:My mentor wants me to do it HIS way.

That’s fine. Learn HIS way. Then do it YOUR way. With respect

My spouse is worried about who will support/take care of kids?

Then after you work 16 hours a day, seven days a week being a janitor, use your spare time to reinvent.

Someone who is reinventing ALWAYS has spare time. Reinvention is collecting little bits and pieces of time

Q:What if my friends think I’m crazy?

What friends?

Q:What if I want to be an astronaut?

That’s not a reinvention. That’s a specific job. If you like “outer space” there are many careers. Richard Branson wanted to be an astronaut and started Virgin Galactic.

Q:What if I like to go out drinking and partying?

Read this post again in a year.

Q:What if I’m busy cheating on my husband or wife or betraying a partner?

Read this post again in two or three years when you are broke and jobless and nobody likes you.

Q:What if I have no skills at all?

Start from the top.

Q:What if I have to focus on paying down my debt and mortgage?

See above about "spouse"

Q:How come I always feel like I’m on the outside looking in?

Albert Einstein was on the outside looking in. Nobody in the establishment would even hire him.

Everyone feels like a fraud at some point. The highest form of creativity is born out of skepticism.

Q:I can’t read 500 books. What one book should I read for inspiration?

Give up.

Q:What if I’m too sick to reinvent?

Reinvention will boost every healthy chemical in your body: serotonin, dopamine, oxytocin. Don’t use health as an excuse.

Eat better. Exercise. These are key steps to reinvention and are natural antidepressants.

Q:What if my last partner screwed me and I’m still suing him?

Stop litigating and never think about him again. Half the problem was you, not him

Q:What if I’m going to jail?

Perfect. Read a lot of books in jail.

Q:What if I’m shy?

Make your weaknesses your strengths. Introverts listen better, focus better, and have ways of being more endearing.

Q:What if I can’t wait five years?

If you plan on being alive in five years then you might as well start today.

Q:How should I network?

Make concentric circles. You’re at the middle.

The next circle is friends and family.

The next circle is online communities.

The circle after that is meetups and coffees, conferences and thought leaders, mentors, customers,

Q:What if I’m passionate about two things? What if I can’t decide?

Combine them and you’ll be the best in the world at the combination.

Q:What if I’m so excited I want to teach what I’m learning?

Start teaching on YouTube. Start with an audience of one and see if it builds up.

Q:How do I meet mentors and thought leaders?

Once you have enough knowledge (after 100-200 books), write down 10 ideas for 20 different potential mentors.

None of them will respond. Write down 10 more ideas for 20 new mentors. Repeat every week.

Put together a newsletter for everyone who doesn’t respond. Keep repeating until someone responds. Blog about your learning efforts. Build community around you being an expert.

Q:What if I can’t come up with ideas?

Then keep practicing coming up with ideas. The idea muscle atrophies. You have to build it up.

It’s hard for me to touch my toes if I haven’t been doing it every day. Don't expect to come up with good ideas on day one.

Q:What if I do everything you say but it still doesn’t seem like it’s working?

It will work. Just wait. Keep reinventing every day.

Don’t try and find the end of the road. You can’t see it in the fog.

Q:What if I get scared?

Sleep 8-9 hours a day and never gossip.

Q:What if I keep feeling like nothing ever works out for me?

Spend 10 minutes a day practicing gratitude. Don’t suppress the fear. Notice the anger.
Gratitude is the bridge between your world and the parallel universe where all creative ideas live.

Q:What if I have to deal with personal bullshit all the time?

Find new people to be around.

Someone who is reinventing herself will constantly find people to try and bring her down.

The brain is scared of reinvention because it might not be safe.

Biologically, the brain wants you to be safe and reinvention is a risk. So it will throw people in your path who will try to stop you.

Learn how to say “no.”

Q:What if I’m happy at my cubicle job?

Good luck.

Q:Why should I trust you – you’ve failed so many times?

Don’t trust me.

I was forced to reinvent my whole life at ages 21, 24, 26, 30, 31, 32, 34, 37, 40, 41, 42, 46, 47, 49, and now. today.

Simplify... simply.. simplify...

Eurozone is in trouble; Sachin hits 100th 100 but the match is lost; AIADMK registers a thumping by-election win amidst the entire state reeling under darkness due to power cuts; Saina defends her swiss title but Indian cricket team is out of ASIA Cup; Tamil cinema stares at another big budget flop and  Meanwhile few more MLAs caught watching forbidden stuff.

When I think of my countryIndia now, these news came to my mind .Though no connections among these events except they belong to same time capsule. . It probably reflects my state of mind as well. While I am happy with some events in the past one year or so, I also had my share of disappointments and defeats. But my mind is so cluttered that I am so scared to introspect. I am not sure whether I am happier than last year or the year before. Why all these are so complicated!.. . Randomness in my life is so stricking

Happiness , Joy are the words to be seen only on greeting cards now a days. Shame!!These words looks alien even when I wrote that previous line. I was so tempted to delete the line for a moment because I felt as it might inject some kind of fakeness in what I intend share with you. As I grow older, I am really moving away from all the fun stuff.

If you asked me what I liked when I was in my 20s , my list would have run into pages. They were many which are close to my heart. The music, paintings, friends , movies - I found fun in places where it’s abundant. But now a days, I seek to have fun in ‘acquiring’. Even the simple pleasure of reading a good book is getting complicated by the desire to buy the kindle or nook. Scarcity seems to be defining the degree of ‘Fun’.

Just got me thinking of why not get back to the simple pleasures of life… and a big ‘WHY NOT’…

And Simplifying could be the start!!! But where to start ? Gonna google first and tell you next…. See ya till then!!!

Meanwhile.. have you simplified anything lately??? Care to share….

I want to become one of them

I wrote this piece for my U21 admission few years ago. Read on.. This is right from my heart.

"I want to become one of them". This one sentence has triggered lots of positive changes in me. I have kept repeating this to myself innumerous times and I have no intentions to stop it.

I grew up in a small town where the dream of every student at that time was to become a doctor. But I chose a different path to pursue science and ultimately landed in computer science. Globalization and infamous Year 2000 bug presented me the opportunity to work overseas .This introduced me the whole concept of global organizations for the first time.

On returning, I joined one of India’s top IT Company, Wipro. Over the years, I have worked with or watched many leaders of different background and nationality both from Wipro and its client companies. They are all both inspirational and admirable. I watched them in awe all the time and it did not take long time before I realized that deep inside I wanted to become one of them.
On a parallel track, India’s recent growth story has brought many entrepreneurs and business leaders to the limelight. I don’t miss any of their interviews and their columns in magazines. Their wisdom and clarity of thinking amaze me every time. Every time after reading or listening to their experience, immediately I will tell myself ‘I want to become one of them’.

I have grown in Wipro from a developer to a project manager and I have realized that my growth is only limited to my capabilities. My professional success in my field is through my formal technical education (Master of Computer applications). I have involved in quite a few crucial IT projects and contributed significantly to their success either as an individual contributor or a project lead. I got some very positive feedbacks for those also learnt some important lessons along the way.

In my nine years of IT industry experience, I learnt the importance of constant learning because it is the nature of our industry. I believe that my eagerness to learn and willingness to go extra mile will help me to reach my very important goal of expanding my capabilities and skills which will result in a positive impact in my life.

But When I look at my superiors I can see that the parameters for their success are very different from mine. It occurs me that if I want to reach to their level or go beyond, then I should prepare myself very differently.

A business degree from a reputed school is definitely a major step in the right direction .It is one of my long term goals to achieve my dream of pursuing the management career in an international setting. I have also set a short term goal to find a mentor within my organization. With my current position, I will continue to gain the important international exposure which is also very rewarding experience.
One of my inspirations said once,’ never miss a chance to learn’. In this case, I think I am following his words.