Talent Is Overrated (6 page)

When Buffett graduated from Columbia Business School, he was such a devotee of his professor, Graham, that he volunteered to work for Graham's investment company for free. But, as Buffett tells the story, “Ben made his customary calculation of value to price and said no.” Buffett did go to work for Graham's firm a couple of years later, staying for two years, and then went back to Omaha to start his first investment partnership at age twenty-five.

So at this point we have a picture of a young man who had shown an intense interest in money and investing from an early age and who (like Rockefeller) possessed a powerful compulsion to become rich. He had worked extremely hard at learning all about the field that obsessed him. But he had not yet achieved anything even approaching extraordinary real-world performance. By the time Buffett began accumulating a world-class record of performance, he was well into his thirties—and had been working diligently in his chosen field for more than twenty years.

Still—there were lots of stockbrokers' sons in the Depression, and only one of them became Warren Buffett. Why? That's a large and deep question that we'll examine further; the key point for the moment is that the concept of innate business talent is not looking like a very promising answer to the question of how Buffett or any of the business greats became who they were.

 
More generally, it seems we need to recalibrate our views on the role of specific, innate talents. We need not be absolutists about the matter. Heated arguments over whether such talents exist at all are best left to the scholarly researchers. For most of us, the critically important point is that, at the very least, these talents are much less important than we usually think. They seem not to play the crucial role that we generally assign to them, and it's far from clear what role they do play. In chapters 4, 5, 6, 9, and 10, I will share much more evidence on this matter.

But even if we have to admit that the case for the central role of specific talent is weak, we may still believe that great achievement requires exceptional, and inborn, general abilities. You don't reach the high elevations of any field without an IQ that's off the charts or an XXL memory. Or so we tend to assume. But this belief also, deep-seated though it may be, is worth closer examination.

Chapter Three

How Smart Do You Have to Be?

 
 
On July 11, 1978, in a psychology lab at Carnegie Mellon University in Pittsburgh, an undergraduate who would become known in the scientific literature as SF sat trying to remember a list of random numbers. He was a subject in an experiment being conducted by Professor William Chase, a famous researcher in psychology, and a postdoctoral fellow named Anders Ericsson. They were testing SF and other subjects on a standard memory test known as the digit span task: A researcher reads a list of random digits at the rate of one per second; after a pause of twenty seconds, the subject then repeats as many digits, in order, as he or she can remember. Psychologists had been running this test on subjects for many years. What was so interesting about SF was the extraordinary number of digits he could recall.

If you're like most people, you'll max out at around seven numbers on the digit span task. You may get to nine, but going further is rare. (It's harder than remembering a phone number; try it.) Another of Chase and Ericsson's subjects had been tested an hour a day for nine days and had never gone beyond nine digits; he had dropped out of the study, insisting no further improvement was possible. In a much earlier study, two subjects had managed to increase their digit span to fourteen after many hours of testing. But on this day, SF was being asked to recall twenty-two digits, a new record. The toll it was taking on him was large.

“All right, all right, all right,” he muttered after Ericsson read him the list. “All right! All right. Oh . . . geez!” He clapped his hands loudly three times, then grew quiet and seemed to focus further. “Okay. Okay. . . . Four-thirteen-point-one!” he yelled. He was breathing heavily.
“Seventy-seven eighty-four!”
He was nearly screaming.
“Oh six oh three!”
Now he was screaming.
“Four-nine-four, eight-seven-oh!”
Pause.
“Nine-forty-six!”
Screeching now. Only one digit left. But it isn't there.
“Nine-forty-six-point . . . Oh, nine-forty-six-point . . .”
He was screaming and sounding desperate. Finally, hoarse and strangled:
“TWO!”

He had done it. As Ericsson and Chase checked the results, there came a knock on the door. It was the campus police. They'd had a report of someone screaming in the lab area.

SF's achievement was significant in a couple of ways. His record of twenty-two digits didn't stand for long. He kept setting new records (soon without screaming), until eventually, after about 250 hours of training over a period of two years, he could recall eighty-two digits. To appreciate what that means, imagine someone reading you the following list of numbers, one per second:

 
Keeping that list in your head, in order, after hearing it once would seem simply impossible. Yet SF's memory, when tested, had been average before he began training. His grades were very good, but his intelligence, when measured by standardized tests, was average. Nothing about him suggested that he would ever achieve amazing feats of memory.

In addition, while he stopped training at 82 digits, nothing in his progress to that point indicated that he had reached his limit. In fact, a friend of his who later became a research subject of Chase and Ericsson reached 102 digits, with no indication that he had reached his limit. Chase and Ericsson concluded, “There is apparently no limit to improvements in memory skill with practice.”

That was the first significance of SF—showing that a person of average general abilities could nonetheless extend one of those abilities to levels that would seem unimaginable. How he did it turned out to be critically important, as we shall see.

The second significance was that the experiment planted a seed in the mind of Anders Ericsson, who would go on to become the preeminent researcher in the field of great performance. For him, SF exemplified what he calls “the remarkable potential of ‘ordinary' adults and their amazing capacity for change with practice.” That is the theme of his research over the past thirty years. It has taken him far beyond the study of memory, but it's appropriate that that's where it began, because memory, along with general intelligence, is widely regarded as a key skill of great performers.

That's especially true in business. For example, former GE chief Jack Welch was famous for seeming to remember everything about one of the world's largest and most complicated companies, the kind of guy who could spot an inconsistency on the twenty-sixth line of a financial statement during an operating review that was glazing everyone else's eyes. Such stories are quite common among preeminent executives. A generation earlier, Harold Geneen of ITT was legendary for the same ability.

Besides prodigious memories, high-performing businesspeople often seem to have tremendous intellects. Warren Buffett is famous for doing complicated math in his head. He claims not to own a calculator, and given his reputation for honesty, there's no reason to doubt him. Steve Ross, who built the Warner Communications empire before selling it to Time Inc., was known for analyzing complex deals in his head and considered this ability a personal competitive advantage. He supposedly said, “I hate calculators. They're the equalizer.” Andy Grove, the great former CEO of Intel, radiates intellect and was known to give little slack to subordinates who couldn't keep up. The same is true of Barry Diller, who built exceptional careers in television, movies, and the Internet.

Even if we're prepared to question the notion that certain people come into this world with specific gifts for business, most of us still assume that the greats possess tremendous general abilities, especially intelligence and memory. We see individuals—Welch, Buffett, and many others—who seem to prove the point, and plenty of other examples as well. Goldman Sachs, the most highly regarded firm on Wall Street, has long been known for hiring only the smartest graduates of the most elite schools. McKinsey & Company, the king of consulting firms, regularly hires most of the Baker Scholars—the most outstanding students—at the Harvard Business School. Microsoft and Google are famous for grilling job applicants with questions that would leave most people begging for mercy. Everywhere we see hypersuccessful companies seemingly filled with people who got perfect scores on their SATs.

So it's definitely surprising, at least at first, to find that research doesn't support the view that extraordinary natural general abilities—as distinct from developed abilities like SF's memory—are necessary for high achievement. In fact, in a wide range of fields, including business, the connection between general intelligence and specific abilities is weak and in some cases apparently nonexistent. As for memory, the whole concept of a powerful memory is problematic because it turns out that memory ability is very clearly created rather than innate.

Obviously the most successful people in business or any other domain have something special. But what is it? The idea that it's an inborn gift for cost accounting or writing software or trading cocoa futures doesn't seem to hold up. Harder to believe is that it isn't even more general cognitive abilities. That's what the research is telling us, but it's so counterintuitive that it requires some explanation.

We begin by delving briefly into the heavily fraught and extremely deep concept of intelligence. What do we mean when we say someone is smart? It's one of those concepts that we understand intuitively, but then we dwell on it and realize how complicated it is. Some people seem smart with numbers, others with words, others with abstract concepts, still others with concrete knowledge, and how do all those kinds of smart fit together? It seems likely that if we sat down and thought about it, most of us would come up with a basic definition of smart that parallels closely the much maligned concept of IQ.

Tests of IQ, as they have been developed over the past century, actually consist of ten subtests that try to capture various aspects of intelligence (the subtests focus on information, arithmetic, vocabulary, comprehension, picture completion, block design, object assembly, coding, picture arrangement, and similarities). After giving these tests to millions of people, researchers have found that performance on the subtests is correlated, that is, people who perform well on one of the subtests tend to perform well on all of them. Why? The researchers hypothesized that there must be some general factor that influences performance on all the subtests, and they called this factor general intelligence, or
g.
That's what IQ measures.

An assortment of academics and nonspecialists have been beating up on IQ for years, largely because of what it doesn't measure and doesn't explain, and many of these attacks are justified. For example, critical thinking is obviously important in the real world, and IQ doesn't measure it. Ditto with social skills, honesty, tolerance, wisdom, and other traits that we value and would love to understand better; they're not on the IQ test. In response, writers and researchers over the years have proposed new concepts of what they call other types of intelligence. Most notable is Harvard professor Howard Gardner, whose theory of multiple intelligences (linguistic, musical, visual/spatial, and at least five others) has been highly influential. Daniel Goleman has written best-selling books on what he calls emotional intelligence, or EQ—the many factors (self-control, zeal, persistence, and others) that seem to contribute to success in real-world relationships from marriage to the workplace. These concepts can be highly useful, although calling them types of intelligence may not be, because it fuzzes up the concept of intelligence. One of the most famous intelligence researchers, Arthur Jensen, has said it's like calling chess an athletic skill. We certainly want to study chess, but classifying it in that way may only slow down our understanding of where athletic skill comes from.

So for the moment we stick with the concept of general intelligence as
g,
measured by IQ. It has a pretty good record. It predicts fairly well (though far from perfectly) how people will perform in school. Professor James R. Flynn, an eminent intelligence researcher, reports that people in professional, managerial, and technical jobs have an above-average IQ as a group. Among workers overall, average IQ increases with the complexity of the work, which seems totally unsurprising. It supports what most of us would suppose: Smarter people do better. Research says they do more demanding work and achieve higher socioeconomic status. When we think of intelligence in the general, old-fashioned, academic sense, then particle physicists are smarter than dentists, who are smarter than assembly-line workers, on average. So a mass of evidence seems to undergird the view that even if the world's great performers don't possess a specific, targeted gift, they still have some more general natural advantage, most likely superior intelligence.

The trouble starts when we dig beneath the averages. Consider your own acquaintances. You are virtually guaranteed to know people who have succeeded in the business world, sometimes very considerably, without evincing conventional brainpower that's in any way impressive. We typically explain this by saying they're good with people, or they work extremely hard, or they really put their heart into it. Such factors may relate to Gardner's multiple “intelligences” or Goleman's EQ, but the critical point is that whatever these people have, it definitely is not general intelligence—our first hint that IQ may not explain great performance as well as we usually suspect it might.