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Smarts in Business is Not About IQ

In the real world, it’s grit that makes us smart and helps us break through

Rich Karlgaard
Published: Jan 11, 2014 07:49:47 AM IST
Updated: Jan 14, 2014 10:59:27 AM IST
Smarts in Business is Not About IQ

When academics use the word ‘smarts’, they usually mean general intelligence, or ‘g’ for short. This is the ability to learn, think and apply. For decades scientists have sought to measure g by using IQ and similar cognitive tests.

But smarts is something different in the real world. It isn’t defined by 800 math SATs. It’s more about the importance of hard work, perseverance and resilience. Call it grit. Call it courage. Call it tenacity. Because these are old-fashioned concepts, they’re easy to miss.

In business the questions are: Who can get things done? Who can achieve, endure and succeed? The oil wildcatter in North Dakota or the top insurance salesman in Kansas City may not be a mathematical genius like Google’s Sergey Brin, but they’re both wily, clever and capable. They’ll survive good times and bad. They’ll adapt to changing markets and win more than they lose.

While discussing smarts, CEO Tom Georgens of NetApp, the $6.3 billion data storage company, made a very interesting observation: “I know this irritates a lot of people, but once someone is at a certain point in his or her career, all the grades and academic credentials in the world don’t mean anything anymore. It’s all about accomplishment from that point on.” About his own hires, Georgens offered, “I don’t even know where some members of my staff went to college or what they studied.” To him and other CEOs, at a certain point it just doesn’t matter anymore.

Greg Becker, CEO of Silicon Valley Bank, told me, “Some of the better venture capital firms that I know want people who are scrappy, who have been through trials and tribulations. These people will figure out a way to make it work, no matter what.”

Maynard Webb, chairman of Yahoo’s board of directors and a board member of Salesforce.com, added, “What I’m looking for is talent. But talent isn’t just intellect. Talent is also what you’ve done. If you’re an entrepreneur trying to break through, it’s hard work. You have to be tough, you have to be willing to take lots of body blows. So, I’m looking for that grit factor.”

This should be good news for most of us. We’re not limited or defined by the IQ we’ve inherited. Much of what makes us real-world smart comes from what we’ve learnt—usually the hard way. Academics will say those things don’t technically define smarts. Fair enough. Effort and tenacity don’t directly align with the scientific definition of intelligence. But let me show you how grit leads directly to becoming smarter. This happens because grit results in an increased ability to learn more and adapt faster.

Grit creates smarts
From the prenatal period to the end of our lives what shapes the neural circuits underlying our behaviour is experience. This can include such uncontrollable influences as adversity, as well as such intentional influences as learning and training. The human brain displays amazing plasticity—the ability to modify neural connectivity and function—even into our 70s.

The smartest people in business are not those who have the highest g; they are those who regularly put themselves in situations requiring grit. These acts of courage accelerate learning through adaptation.

For example, salespeople who make more calls will almost always outperform salespeople who make fewer calls. This doesn’t happen just because the act of making more calls mathematically raises the chances of success. There’s much more to it. By facing up to the task of making a call, frequent callers put themselves on a faster learning curve. They’re quicker to learn techniques that overcome rejection. Thus, their success yield will improve. The act of making lots of calls also helps a person learn self-discipline and understand the rewards of delayed gratification.

In the real world, it’s grit that makes us smart.

Rich Karlgaard is the publisher at Forbes

(This story appears in the 24 January, 2014 issue of Forbes India. To visit our Archives, click here.)

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  • Prerana

    Business articles tend to stereotype people and leaders to categories and forcefully fit into them. \'Grit\' is one such stereotype. Who is saying that person with 800 in SAT doesn\'t have grit? Why make it either or situation? A successful business leader needs talented and committed followers who can get things done for him. He also needs to empathy to keep them motivated and driven to the purpose of the organization. Without good people, even with great leader organization cannot deliver. However, we ignore these great followers and nobody writes stories about them. For every successful Google there are hundreds of start-ups which have failed, but nobody writes stories on them. History is replete with examples of great products which have failed, however, we conveniently ignore them. eg. Motorola 68000, Netscape If these business writers knew the secret sauce of success, wouldn\'t they have been pursuing those success rather than writing articles? It\'s like astrologer trying to tell us our bright future looking at our horoscope.

    on Feb 7, 2014
  • Venki

    Well said indeed!

    on Jan 14, 2014
  • Kirandeep Atwal

    If the person has scored decently on LAST or GMAT or SAT then, she/he will see logical fallacy in this argument. Just because there are bunch of less qualified people who are very successful does not prove that people graduating from elite universities lacks grit. Let'€™s compare person who is high school dropout and the person who graduated from IIT. The person from IIT has worked hard to qualify JEE exam. He has submitted his assignments on time and attended classes on time. He worked hard and delayed gratification. How can you say that kind of person lakes grit? The author gives example of salesman. If your product is good then it will sell through word of mouth. You do not need salesman that behaves like Chanakya. See Hindi movie '€œRocket Singh'€. You will find what kind of cheap tactics salesmen use to sell their product. Of course, the person from IIT lacks grit. In fact, politicians have much more grit. Millions of people died in 20th century in wars to satisfy the ego of these politicians.

    on Jan 13, 2014
  • Stephen

    Things depend also on your values and reasoning powers. To get rich through dishonest means, which is common, is not good for society in general. To become so wealthy (often initially through luck, dishonesty, or inheritance) that you never can reasonably and meaningfully employ that wealth has little worth or negative worth as it is a waste of resources in so far as the common good is concerned. To be really clever involves earning well for your needs but not more than that.

    on Jan 11, 2014