Why do smart people make stupid decisions?

Although few topics have attracted more scientific and popular interest than human intelligence, there is a huge gap between scientific and lay views on the subject.

by Tomas Chamorro-Premuzic
Last Updated: 19 Jun 2016

To scientists, intelligence is best defined by IQ scores, which, contrary to what lay people believe (or would like to), have been found to predict real-world success, such as college grades, job performance and leadership effectiveness.

To lay people, however, IQ tests are at best indicative only of academic abilities and far less important than social and emotional skills. This explains the success of Daniel Goleman's book Emotional Intelligence: Why it can matter more than IQ. Goleman's views contrast with mainstream scientific research yet they resonate with the public for a very simple reason: namely that people with high IQs don't always have a reputation for being smart. In other words, smart people are remarkably capable of stupid decisions.

There are three reasons for this:

1. Unlike in IQ tests, the problems we face in real life don't have an objective solution. Rather, some decisions have better consequences than others, but we only find out after decisions are made. As Steve Jobs famously observed, you can only join the dots going backwards.

2. Because of the overwhelming amount of information before us, logical thinking can be impractical, even when it may lead to a better decision. As psychologist Daniel Kahneman noted, most of our decisions are based on mental shortcuts rather than logical reasoning.

3. When most people are confronted with the fact that they have made the wrong decision, they are unwilling to admit it and engage in a range of unconscious, self-serving tactics that help them save face and avoid feeling stupid.

Although nothing can be done about the first reason, the other two can be addressed. Helping people - especially managers - understand their default patterns of thinking and reasoning is likely to improve their judgement. Likewise, coaching can help individuals become aware of their self-serving biases, which ought to improve their capacity for not repeating bad decisions. If this can be achieved, then scientific and lay views on intelligence will be more similar.

Tomas Chamorro-Premuzic is a professor of business psychology at UCL, VP of innovation at Hogan Assessments and co-founder of metaprofiling.com. Follow Professor Chamorro-Premuzic on Twitter at @drtcp.

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