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Michael Gardon

  • Writer's pictureMichael Gardon

How To Determine Your Circle Of Competence - The Break Issue 18

Updated: Mar 19

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Determine Your Circle of Competence

Where should we devote our limited time in life to achieve the most success?

This is the central question we're all trying to answer. Finding clarity here simplifies our life, reduced our decisions and brings clarity to our actions.

Last week in Managing Decision Overload, one of my antidotes to decision overload is to “Start where you are.” To do this, you have to know yourself - your strengths, weaknesses, proclivities, natural abilities and what you like and don’t like to do. I call all of this your Circle of Competence.

I got a suggestion from a subscriber to break down Circle of Competence a bit more and include practical steps for figuring out your COC —> turns out it’s something a lot of people struggle with.

I Don’t Know What I’m Good At!

I’ve always struggled articulating what I’m good at. I think all multi-potentialites have this problem. We are generalists, not specialists. We are Swiss Army Knives and not hammers. To a hammer, everything looks like a nail. To a Swiss Army Knife, everything is a problem to be solved just good enough.

So I’ve always struggled to map out my strengths and weaknesses on a resume, or articulate my strengths in any coherent way.

I’ve always thought I was a pretty good problem solver, a figure-it-outer, analytical, etcetera, but doesn’t everyone say they are these things?

I’ve come to learn that knowing myself, I mean REALLY knowing myself is the key to doing just about anything like:

  • selecting projects

  • finding fulfilling work

  • sleeping well

  • who to work with

  • designing a good life

  • building companies

  • investing

  • choosing friends

  • choosing how to spend my time

The reality is that we all have too many options, not too few. Knowing yourself is a filter to weed out everything that isn’t going to serve you and your goals. Knowing yourself helps avoid time and energy traps. But how do you know yourself?

My Circle Of Competence Definition

Warren Buffett, who is credited with coming up CoC, defines CoC as what you know vs. what you don’t know. What you don’t know is infinitely larger than what you do know as Ray Dalio likes to say. And one of the biggest mental fallacies that get people in trouble is “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so” as Mark Twain famously said.

Buffett would go on to say, “the size of the circle is not very important. More important is defining the limits of your circle.”

Charlie Munger, Warren Buffett’s long time business partner, famously said that the essential question he has sought to answer over his lifetime is “Where should we devote our limited time in life, to achieve the most success?” His prescription for all of us is:

You have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you’re going to lose. And that’s as close to certain as any prediction that you can make. You have to figure out where you’ve got an edge. And you’ve got to play within your own circle of competence.

He’s right, but in my experience, CoC goes well beyond knowledge.

The definition I use is:

Circle of Competence is all of the sources of advantage that you have.

The reason I use this definition is because its simple, it starts the reader on a path of thinking about their knowledge, skills and abilities in terms of advantage/disadvantage and opens up their world to think creatively about how to use what they have where they are to begin creating a better advantage for themselves.

What Are The Sources Of Advantage or Disadvantage?

As I said above, CoC isn’t just knowledge. Buffett was talking about investing the way he does it - understanding certain industries, business models, competition and management. I’m talking about you knowing yourself, and you are infinitely bigger than your knowledge.

So I believe advantage can come from at least 4 place:

  1. Energy - the things that give you energy instead of sucking energy, since the best plan is one you can adhere to, energy is hugely important.

  2. Aptitude - what are you naturally good at? What comes easy to you, that is a struggle for others?

  3. Acquired skill - what are the skills that you have acquired that make you actionable in a certain area? Sometimes these skills are specific to an area and some, like communication, are meta skills that make it easier for you to make a change.

  4. Knowledge - yes, knowledge is a huge advantage, particularly when you’re clear about its limits.

I’m sure we can add to this list, but that’s how I see buckets right now.

Strategies For Mapping Your Circle Of Competence

You now get why knowing your CoC is so important for directing your attention and making sure you’re committing time to things you can win at, but how do you develop a sense of your CoC?

Here are a few strategies. I’d like to work towards a formal way of mapping all of this, and maybe I will create one, but at least here’s how I think about it now.


Taking personality and skills assessments are a great starting point. There are very popular (and well researched) ones such as Meyers Briggs, Caliper, DiSC and others. A run down of great career assessments can be found here.

Not only do assessments tell you what you are like, they can shed light on how you learn and who you’re likely to get along with, and even help steer you to careers that may be a good match. Assessments at least give you a baseline to start understanding where you are naturally strong and weak.

Our very own career quiz can be found here.

Direct Feedback

If you have a corporate job, you’ve probably experienced a 360 review or something like it where you go through a formal process of reviewing your performance. Instead of fearing this, embrace it! Dig in and really ask what you can improve on, or where you’re strong. Remember, as humans we’re all on a learning path and feedback is a key instrument to learning effectively.

If you don’t have a formal review process, take ownership over getting your own feedback as my friend Tareka Wheeler recently explained to me on my podcast.

How I’ve done this in the past with clients, customer and peers is to build a google form with several questions on it and send it out to people above and below you. Get a wide range of feedback.

The questions I like are:

  • What am I known for?

  • What problems or issues do you think of me for immediately?

  • What do you need more of from me in the next 6 months?

  • What do you go to someone else for, but that you think I should do?

When I did this, it was eye opening. I learned that I am someone who can pull apart problems, and very quickly cut to the heart of an issue to isolate the problem and strategize a solution.

Indirect Feedback

What have you heard people casually mention to you in conversations? Maybe you shrugged it off at the time, but when you have multiple data points telling you the same thing, its hard to deny a skill you have. I’ve never really enjoyed public speaking, but I’ve had many people tell me that I’m good at it. I always denied it, but now I’m trying to lean into finding ways to use and develop that skill more. I’ve now been on local news stations and I’m even keynoting an upcoming conference.


If you’re having difficulty figuring out what you are good at, it’s often helpful to invert the problem and ask “what am I not good at?” Or “what do I for sure not know?” Sometimes by eliminating things, we are able to see what is left. As Michelangelo said when he was asked how he carved the statue David: “I just removed everything that wasn’t David.”

Inversion is a very powerful mental model for problem solving. It is something that I used when I designed my way out of my corporate job. I started by asking myself “what do I not want in my life?” Then I set out on a path of discovery for what would avoid those things.


I love journaling at certain periods of time or on certain problems, and CoC qualifies as a journaling problem.

Reflect on:

  • your history - what stories of triump or failure do you have that you repeat to yourself? What were the big defining moments in your life and what did you learn about yourself in the process?

  • Your small successes - create a success journal and write down one win every day. You’ll start to see patterns of where you’ve created value historically

  • Your feedback - what is true or not true? What can you pull out of that feedback and make part of your superpowers?

  • Your decisions - One of the most invaluable resources I read in my twenties was The Farnam Street Blog by Shane Parrish. I have all his books on mental models and decision making. Shane came up with the concept of a decision journal as a way to reflect on every decision to pull out learnings and key insights about how you make decisions and learn. I highly recommend doing it.

See you again next week.

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What’s happening on the pod?

In this episode, I chat with Barry Shore. Known as the “Ambassador of JOY,” Barry Shore is a mental wellness activist, philanthropist, multi-patent holding entrepreneur, speaker, author, podcaster, and former quadriplegic who is now swimming around the world!

After a rare disease paralyzed Barry from the neck down, he created the JOY of LIVING Community™, The Keep Smiling movement that has reached multiple celebrities and distributed millions of “Keep Smiling” cards worldwide, and a philanthropic platform featured in Oprah’s Magazine.

Barry’s podcast, The JOY of LIVING, is heard globally by hundreds of thousands and has over three million downloads.

You made it to the end! Hopefully you learned something about breaking your career today! If so, please share this with someone you care about.

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