Do You Have To Be Smart To Succeed In Business?
Friend of the blog James Holt asked on Twitter whether you need to have a high-IQ to succeed in business.
I answered vaguely and cringed inward slightly as I did. Firstly, because I wrote this article on increasing your IQ and then said I’d never talk about IQ ever again.
Secondly, because I sit in the “uncomfortable truth” region of intelligence theory where I accept that intelligence is important (drawing the anger of the IQ ISN’T EVERYTHING crowd) and also suggest it can be changed by stimulus and environment (drawing the ire of the IQ IS FIXED LOOK AT THOSE STUDIES I HAVEN’T READ crew.)
Let’s exacerbate the problem a little more with this article.
You Don’t Have To Be Smart And Succeed In Business… But It’ll Help
The contrarians would start any argument about this subject by saying, “There are plenty of dropouts who are millionaires and my uncle is a billionaire toilet cleaner who doesn’t know his own name.”
There are a ton of examples of people who are business successes without being well-educated. There are also people who aren’t all that smart who are self-made business successes. Those two things aren’t the same things, but both examples exist.
(That said… a lot of those stores are exaggerated. Take the whole “Bill Gates is a college dropout” story. He didn’t get his degree but he wasn’t exactly the village idiot with no resources.)
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So there are examples of non-smart successes. (Sort of.)
But the overall trend is that IQ correlates to income, and being smart correlates to business success.
There’s a trend in online business circles to say, “drop out of school and do your own thing.” There’s also a tendency among people of a certain cohort to say, “University/College only makes sheep that are designed to be a cog in the wheel with no critical thinking skills.”
I don’t really know what this cohort is talking about. In my experience (and the scientific data bears it out,) CEO’s, businesspeople and other powerful/successful people tend to be well-educated, well-connected and not exactly maverick dropouts.
What To Do About This
The above isn’t useful in-and-of itself, except to frame the following:
In general the smarter you are and the better educated you are, the better you’ll do.
Caveats aside and exceptions-to-the-rule aside, the above is true.
So if you’re a young guy who is thinking of dropping out of school with no qualifications because you can’t cope with being told what to do and you want to follow the digital nomad dream like a rock star… I’d strongly recommend you don’t do that unless you have a lot more of a plan than that.
Now… I’m not saying get yourself into a ton of debt to get a PhD in something just to brag… that isn’t too smart. But the obvious data is that your education will affect your chances of success. You want to maximise those.
If you can run a business while you’re at University, then by all means do it. Don’t drop out because the six hours of lecture a week are boring. This is dumb.
Some time, I’ll have to talk about my University experiences. But for now, for those in higher education:
- If you are a contrarian, keep your mouth shut and get a good degree
- Use the resources available to you (i.e. you have access to massive, world-leading libraries. Get smart)
- If you can be a part of communities that’ll help you in the future, do so.
- Many universities have entrepreneurial sections (with training and funding available. This paid for one of my degrees.)
In short… maximise your education for future success.
Let’s move away from education.
Smarts and Business
You increase your IQ by changing the environment and giving your brain stimuli that increase the processing power and other attributes that contribute to IQ.
Building a business will do this. So will nerd hobbies that stretch your cognitive capabilities. Learn a hard language, you’ll be smarter.
But let’s go back to business success. Check this guy out:
Just grabbed that screenshot a few minutes before writing this.
This guy… he has huge logical problems. His number skills are all over the place and he has all the hallmarks of someone who has never run a business before massively underestimating what a complex system it is.
Anyone who has an online business will see the issues. He conflates profits with sale price, he doesn’t account for costs of sale acquisition… all of those among other things.
Remember arithmetic and information processing all constitute IQ. Do you think if this guy learned accounting and then ran some ads, he’d be wiser for the experience?
Of course… and that’d change how he approached everything in life.
This brings me to the point…
What’s The Point In This Post?
Business success is about competitive advantage. If you want a competitive advantage that isn’t a bigger budget than your competitors or some rare earth mineral that you alone have the rights to, then being smarter than the competition is a good competitive advantage.
Any business success will involve certain things:
- You need to be able to recognise opportunities
- You need to be able to analyse the risk/reward ratio
- Running the numbers is a key skill
- So is emotional intelligence required for sales
- Running all the different pieces is a huge load on your cognitive capabilities
And that’s why I mentioned in the first section of this that in general, people who run businesses tend to be highly intelligent.
Any idiot can look up “how to run an Instagram business” and copy the steps that some blogger has laid out for them.
But someone who can do all of the above things will be more successful and more able to apply those skills to better opportunities. Over the course of a career/working life, the people who can marry all of these things intelligently will rise over the people who can’t.
That’s why intelligence is important in business and accurately predicts a person’s success, generally speaking.
It’s also why you should read this article on improving your intelligence and then work on that and your business to form a holistic feedback loop of smarter and more successful.