Monday, 27 October 2014

What Do Disruptions And Chauffeur Knowledge Have In Common?

Chauffeur knowledge is making its way into business dictionaries following a story told by Charlie Munger during his talk about what went wrong with Enron.

After winning the Nobel prize for Physics in 1918, Max Planck went around Germany giving talks. His chauffeur heard the talk so many times that he had it by heart, and so one time, he asked Max Planck if he could give the address. Planck agreed, they changed places, and the lecture came off famously. But then came the question time, with the very first question being one that the chauffeur had no hope of answering. The chauffeur replied: ‘Never would I have thought that someone from such an advanced city as Munich would ask such an elementary question! I'll let my chauffeur answer it.'

If you are a decision maker in an extremely busy airline environment, and are expected to think and act fast, to be persuasive but unable to commit time and effort to understand the topics, the chances are that you can easily slip outside of your circle of competence, the zone of chauffeur knowledge and source of not so obvious causes of disruptions. This doesn't have to be as bad as it may look like as long as you can recognise when you are outside this circle and are open for inputs from those with real knowledge. 

Distinguishing between those with real and chauffeur knowledge in real life is difficult. Here are some hints.

How big is your circle of competence and how often are you out of it?