Smarts in Business is Not About IQ

When academics use the word ‘smarts’, they usually mean general intelligence, or ‘g’ for short. This is the ability to learn, think and apply. For decades scientists have sought to measure g by using IQ and similar cognitive tests.

But smarts is something different in the real world. It isn’t defined by 800 math SATs. It’s more about the importance of hard work, perseverance and resilience. Call it grit. Call it courage. Call it tenacity. Because these are old-fashioned concepts, they’re easy to miss.

In business the questions are: Who can get things done? Who can achieve, endure and succeed? The oil wildcatter in North Dakota or the top insurance salesman in Kansas City may not be a mathematical genius like Google’s Sergey Brin, but they’re both wily, clever and capable. They’ll survive good times and bad. They’ll adapt to changing markets and win more than they lose.

While discussing smarts, CEO Tom Georgens of NetApp, the $6.3 billion data storage company, made a very interesting observation: “I know this irritates a lot of people, but once someone is at a certain point in his or her career, all the grades and academic credentials in the world don’t mean anything anymore. It’s all about accomplishment from that point on.” About his own hires, Georgens offered, “I don’t even know where some members of my staff went to college or what they studied.” To him and other CEOs, at a certain point it just doesn’t matter anymore.

Greg Becker, CEO of Silicon Valley Bank, told me, “Some of the better venture capital firms that I know want people who are scrappy, who have been through trials and tribulations. These people will figure out a way to make it work, no matter what.”

Maynard Webb, chairman of Yahoo’s board of directors and a board member of Salesforce.com, added, “What I’m looking for is talent. But talent isn’t just intellect. Talent is also what you’ve done. If you’re an entrepreneur trying to break through, it’s hard work. You have to be tough, you have to be willing to take lots of body blows. So, I’m looking for that grit factor.”

This should be good news for most of us. We’re not limited or defined by the IQ we’ve inherited. Much of what makes us real-world smart comes from what we’ve learnt—usually the hard way. Academics will say those things don’t technically define smarts. Fair enough. Effort and tenacity don’t directly align with the scientific definition of intelligence. But let me show you how grit leads directly to becoming smarter. This happens because grit results in an increased ability to learn more and adapt faster.

Grit creates smarts
From the prenatal period to the end of our lives what shapes the neural circuits underlying our behaviour is experience. This can include such uncontrollable influences as adversity, as well as such intentional influences as learning and training. The human brain displays amazing plasticity—the ability to modify neural connectivity and function—even into our 70s.

The smartest people in business are not those who have the highest g; they are those who regularly put themselves in situations requiring grit. These acts of courage accelerate learning through adaptation.

For example, salespeople who make more calls will almost always outperform salespeople who make fewer calls. This doesn’t happen just because the act of making more calls mathematically raises the chances of success. There’s much more to it. By facing up to the task of making a call, frequent callers put themselves on a faster learning curve. They’re quicker to learn techniques that overcome rejection. Thus, their success yield will improve. The act of making lots of calls also helps a person learn self-discipline and understand the rewards of delayed gratification.

In the real world, it’s grit that makes us smart.

Rich Karlgaard is the publisher at Forbes