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Levels of Understanding

Ender Levels of Understanding

In any field, there are tiers of comprehension. Sometimes, the difference between tiers is so immense that it’s hard to decipher.

Imagine someone who casually plays tennis. They play against the 800th best tennis player. They then play against the 10th best tennis player. Without being told who is who, they’d have no idea who is the better tennis player. The 800th and 10th best both won every point against them with ease. But if the 10th best played the 800th best, the 10th best would win every game. There’s a huge valley between them. The casual player could never see the difference playing each individually. They’re too far away.

When you aren’t highly competent in an area, you cannot accurately judge performance. You won’t know the right framework to even judge performance. Frameworks, like operational debt, are better ways to approach and solve problems.

People who casually play poker understand the concept of pot odds. They understand how many outs they have and how to calculate their percent chance of hitting their draws. But professional poker players often think, “how much do I have to raise to get them to fold?” Sure, they also think about pot odds of hitting their outs but pot odds aren’t as important. “What percent chance will they fold if I raise X amount” is its own expected value calculation. And if they call, the chance of winning/pot odds adds to the expected value calculation. The most advanced poker players count combinations, blockers, and attempt to play game theory optimal.

When negotiating, a basic level of understanding is– “what is my BATNA (best alternative to the negotiated agreement)?” If you’re better, you may ask, “what is my negotiating counterparty’s BATNA?” This is negotiation 101. 

A higher level of understanding is figuring out what your counterparty cares most about. Then, get the best deal around what you care about, while activating the levers to satisfy what your counterparty cares about. Added bonus to make the negotiation into a cooperative long term partnership.

When hiring, we follow a rule of thumb that one can’t judge another’s aptitude unless they’re within two standard deviations of competency. For disciplines we weren’t highly skilled in, we had expert advisors/investors screen for aptitude. There were times when we knew a candidate was great, but we didn’t know if they were in the top 5%, top 1%, or top .1% in their field. Only someone with extremely high aptitude and practice hiring for the role would know.

More than being highly competent in any area, being cognizant of one’s own levels of understanding is the most important. If we’re aware of our competency gaps, we can always find others we trust to compliment us. No man is an island.