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What does it mean to be smart or dumb? Few questions are more deceptively complex. Most of us have strong opinions about what those words mean, but scratch the surface and it becomes clear that smart and dumb are slippery, subjective constructs. What seems smart to one person may strike another as naive, arrogant, or shortsighted. Worse still, our own perception of whats smart can shift over time. Yesterdays clever decision can look like todays regrettable blunder. Take Jay Gatsby, for instance. His grand plan to reinvent himself, amass a fortune, and win back Daisy once seemed like the height of romantic intelligence; but in the end, it revealed itself as delusional folly, built on illusions as fragile as the dream he chased. {"blockType":"mv-promo-block","data":{"imageDesktopUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/10\/tcp-photo-syndey-16X9.jpg","imageMobileUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/10\/tcp-photo-syndey-1x1-2.jpg","eyebrow":"","headline":"Get more insights from Tomas Chamorro-Premuzic","dek":"Dr. Tomas Chamorro-Premuzic is a professor of organizational psychology at UCL and Columbia University, and the co-founder of DeeperSignals. He has authored 15 books and over 250 scientific articles on the psychology of talent, leadership, AI, and entrepreneurship. ","subhed":"","description":"","ctaText":"Learn More","ctaUrl":"https:\/\/drtomas.com\/intro\/","theme":{"bg":"#2b2d30","text":"#ffffff","eyebrow":"#9aa2aa","subhed":"#ffffff","buttonBg":"#3b3f46","buttonHoverBg":"#3b3f46","buttonText":"#ffffff"},"imageDesktopId":91424798,"imageMobileId":91424800,"shareable":false,"slug":""}} For a famous path reversal (from allegedly dumb to obviously smart), consider Forrest Gump, whose simple, seemingly naive choices (e.g., running across America or investing in some fruit company) looked foolish to everyone around him. Yet his lack of overthinking and unpretentious sincerity led him to happiness, wealth, and a kind of quiet genius that outsmarted all the so-called smart people. In hindsight, we often discover that our supposed genius was merely luck, and our dumb mistakes were actually learning opportunities in disguise. In short: Being smart isnt a fixed trait; its a moving target defined by outcomes, context, and time. In line with that, we tend to withhold judgment until weve seen enough evidence. After all, anyone can have flashes of brilliance or moments of foolishnesswhat matters is the overall pattern. Thats why we evaluate intelligence not by a single act, but by the consistency of choices and behaviors over time. The science of adaptability Charles Darwin famously noted, It is not the strongest of the species that survives, nor the most intelligent, but the one most adaptable to change. Along the same lines, psychologists (who are often largely footnotes to Darwin) have a relatively simple and more objective way to define smart versus dumb behavior: adaptability. In that sense, what we call “intelligence” is largely the capacity to adjust ones behavior to achieve desired outcomes in a changing environment. In other words, smart behavior increases your chances of success, survival, or well-being. Dumb behavior does the opposite. When faced with different options, the smartness of your choice can be judged by its consequences. If your decision enhances your opportunities, relationships, reputation, or resilience, its smart. If it narrows your prospects or makes your life worse, its dumb. Crucially, this definition also accommodates social consensus. One persons opinion may be biased, but when many independent observers agree that an action was wise (or foolish), that consensus is usually a good proxy for truth. You can fool some people some of the time, but not everyone all the time. IQ vs. EQ: 2 pathways to smart behavior When it comes to predicting whether people will behave intelligently or not, two psychological constructs stand out: IQ and EQ. IQ (intelligence quotient) reflects cognitive abilitythat is, how effectively you learn, reason, and solve abstract problems. Its the single best predictor of performance in well-defined, rule-bound contexts such as school exams, technical analysis, programming, or chess. People with higher IQs tend to make better decisions when the problem has a right answer. EQ (emotional quotient), on the other hand, captures the capacity to understand and manage emotions, both your own and others. It predicts success in less structured, interpersonal domains: leading teams, negotiating, managing conflict, or handling stress. In these fuzzy, ambiguous situations, there are rarely clear right answers, and emotional intelligence helps navigate the gray zones. Both forms of intelligence matter. IQ helps you see patterns; EQ helps you see people. False stereotypes: book-smart vs. street-smart Part of the reason people resist IQ is that they equate it with cold, academic, or impractical intelligence: the book-smart but clueless archetype. Think of high-IQ figures who made disastrous real-world choices: the Enron executives with MBAs from top schools who engineered their own collapse, or Nobel laureates who lost fortunes day-trading because they overestimated their models. Brilliant analysts but poor decision-makers. Conversely, high-EQ individuals (likable, empathetic, persuasive) are often celebrated as street-smart. They can read a room, defuse tension, and influence others. Yet this doesnt mean they always make wise choices either. Importantly, research shows that IQ and EQ are largely uncorrelated. You can be high on both, low on both, or excel in one and lag in the other. Theyre complementary toolslike having both a hammer and a screwdriver. One wont replace the other, but together they let you handle a wider range of problems. Why high-IQ people do dumb things So why do objectively intelligent people sometimes behave foolishly? A few recurring patterns explain it. Overconfidence in reasoning. High-IQ individuals often trust their logic too much, ignoring emotional or contextual cues. This cognitive arrogance leads to blind spots, especially in social or moral dilemmas. Complexification. Smart people can overcomplicate simple problems, mistaking verbosity or abstraction for insight. They build intricate arguments to justify poor decisions. True intelligence is making complex things simple, rather than vice versa. Confirmation bias. The cleverer you are, the better you become at rationalizing your mistakes. Intelligence amplifies self-deception when ego is at stake. Too often, smart people are more interested in lubricating their egos than in making the right decisiontheir desire to feel smart may surpass their appetite for getting to the solution of a problem. Risk illusion. Intelligent people often feel they can outsmart uncertainty, taking reckless bets (financial, professional, or personal) under the illusion of control. In particular, when intelligence combines with narcissistic tendencies, it may lead to intellectual underperformance at the expense of grandiosity. Narrow optimization. They focus on optimizing a specific variable (e.g., efficiency, profit, prestige) while ignoring broader consequences. A smart business strategy that erodes trust or well-being isnt smart in the long run. In short, high IQ can make you better at justifying dumb ideas, as well as defending your arguments and actions against others, leading to the smartest person in the room syndrome. When emotional intelligence backfires EQ provides no immunity against stupidity either. In fact, its virtues can become liabilities when taken too far. Empathy surplus. Being too attuned to others emotions can make you overly accommodating or reluctant to deliver hard truths. Agreeableness overdrive. High-EQ people often avoid conflict, even when confrontation is necessary to prevent bigger problems later. And people who focus on avoiding conflict end up causing a great deal of conflict in the long run. Emotional manipulation. The dark side of EQ is Machiavellian charm, using emotional awareness to manipulate rather than connect. Compassion fatigue. Caring too much can lead to burnout, especially in leadership or caregiving roles. In any job or organization, especially in competitive settings, if you optimize for getting along, you will impair peoples appetite for getting ahead. Emotional suppression. Some emotionally mature individuals regulate so well that they disconnect from their authentic feelings, losing spontaneity and creativity. In essence, EQ without boundaries can make you a nice foolliked by everyone, exploited by many. The meta-skill: coachability and learning If IQ and EQ help you make smart choices, what helps you stay smart? The answer is coachability, the willingness and ability to learn from mistakes. This meta-skill distinguishes the chronically dumb from the progressively smart. Everyone makes errors; only the adaptable learn from them. Here are five evidence-based ways to improve your decision-making intelligence. Seek feedback relentlessly. Smart people solicit criticism before failure makes it unavoidable. The goal isnt to be right; its to actually get better (evolve, develop, grow, etc.). Distinguish process from outcome. A good decision can lead to a bad result, and vice versa. Evaluate how you decided, not just what happened. Question your certainties. Treat your beliefs as hypotheses to test, not truths to defend. Balance emotion and logic. Before major decisions, ask: Am I thinking clearly and feeling right about this? IQ and EQ can actually work together to improve outcomes, but you will need to manage this tension and turn them into allies. Study your own patterns. Keep a decision diary, record choices, predictions, and outcomes . . . or at least reflect, get feedback, assess, and recalibrate. Over time, youll see which biases or emotions trip you up. In short, the smartest people arent those who never err; theyre the ones who systematize their learning from errors. What ultimately separates wisdom from folly isnt intellect or emotion alone, but the capacity to adaptto learn, recalibrate, and improve. As author and Harvard professor Amy Edmondson compellingly illustrates: In the end, smartness is less about having the right answers and more about asking better questions after youve been wrong. The truly intelligent person is not the one who avoids dumb mistakes, but the one who refuses to repeat them. {"blockType":"mv-promo-block","data":{"imageDesktopUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/10\/tcp-photo-syndey-16X9.jpg","imageMobileUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/10\/tcp-photo-syndey-1x1-2.jpg","eyebrow":"","headline":"Get more insights from Tomas Chamorro-Premuzic","dek":"Dr. Tomas Chamorro-Premuzic is a professor of organizational psychology at UCL and Columbia University, and the co-founder of DeeperSignals. He has authored 15 books and over 250 scientific articles on the psychology of talent, leadership, AI, and entrepreneurship. ","subhed":"","description":"","ctaText":"Learn More","ctaUrl":"https:\/\/drtomas.com\/intro\/","theme":{"bg":"#2b2d30","text":"#ffffff","eyebrow":"#9aa2aa","subhed":"#ffffff","buttonBg":"#3b3f46","buttonHoverBg":"#3b3f46","buttonText":"#ffffff"},"imageDesktopId":91424798,"imageMobileId":91424800,"shareable":false,"slug":""}}
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The most enduring leaders arent the ones with flawless résumés. Theyre the ones whove been tested, humbled, and reshaped by failure. From an early age, I trained intensively to become a professional ballet dancer. Ballet wasnt just a passion. It was my identity, my future, my entire world. Until an audition in Vienna changed everything. A sudden injury ended the career I had spent years building. That moment could have marked the end of my story. Instead, it became the beginning of a new one. I pivoted into finance and marketing, building a career at American Express and Amazon. Today, I advise boards and CEOs on succession, governance, and talent strategy at Egon Zehnder, one of the worlds preeminent global leadership advisory firms. One truth has stayed with me throughout this journey. Setbacks arent detours. Theyre gifts. And if you havent failed in a meaningful way, you may not be ready to lead yet. Setbacks clarify what matters When things dont go as planned, its a moment that forces reflection. Perhaps youve been passed over for a promotion, convinced you were the most qualified candidate. Or the product you thought would set a new sales record didnt perform as well as expected, and customers were underwhelmed. Suddenly, you start asking different questions. Are you communicating your impact clearly? Have you built strong sponsorship? Are you recognized as a leader or just as someone who executes well? Can you pivot quickly and creatively based on changing circumstances? Failure shakes our sense of certainty and exposes how fragile our narratives about ourselves can be. It reminds us that success isnt always linear, and performance doesnt speak for itself. These moments are hard, but they also teach us the difference between doing good work and being seen as ready to lead. Resilience isnt built in moments of triumph. Its forged by challenges Mary Barra, now CEO of General Motors, rose through engineering and manufacturing at a time when few women held those roles. Her experience proved essential in 2014, when GM faced a major crisis over ignition-switch failures. Barra didnt deflect blame. She addressed Congress directly, took responsibility, and began reshaping the companys culture. That could have been a defining failure. Instead, it became a defining moment. Barras story is a reminder that leadership isnt about never being questioned. Its about responding to challenges with clarity, consistency, and a willingness to grow. Ultimately, resilience is built in the quiet, difficult moments when no one is cheering you on. Conviction without listening is arrogance Jeff Bezos once said Amazon succeeds by being stubborn on vision, flexible on details. That mindset helps explain how even a product like the Fire Phone, a commercial failure, still served a strategic purpose. Rather than doubling down on a misfire, Amazon listened to customer feedback, learned from the experience, and used those insights to develop Alexa. The distinction matters: Conviction without listening is arrogance. But conviction that adapts based on what customers are telling you? Thats leadership. Passion, unfortunately, doesnt replace market truth. Tenacity can easily turn into tunnel vision. As leaders, our job is not just to have ideas. Its to make sure those ideas matter to someone else. If were not listeningto our teams, to our customers, to the world around usthen were building in a vacuum. Ideas only matter if others believe in them In my work advising CEOs and boards, I meet leaders with really good ideas who struggle to influence others. They know what needs to be done, but they cant bring people along. Thats not a strategic problem. Its a leadership problem. Influence starts with empathy. The ability to see what others value, where they hesitate, and how to connect with them. Often, that empathy is forged through failure. When leaders fall short, theyre forced to see blind spots, hear hard truths, and confront the real impact of their decisions. Consider Microsoft CEO Satya Nadella. After early stumbles in Microsofts mobile strategy, he leaned into a more collaborative, learning-oriented culture that valued listening over ego. That shift helped him rebuild trust internally and reposition Microsoft as a more agile, empathetic company. Nadellas story is a powerful reminder that failure isnt just a test of resilience. Its a chance to become the kind of leader others actually want to follow. Failure builds humanity. And humanity builds leadership Many of todays most respected leaders have careers marked by public missteps and personal reinventions. In the process, theyve developed resilience and deeper empathythe foundations of strong leadership. Because setbacks dont just humble you, they humanize you. And leadership without humanity doesnt last. Ballet is still a part of me. I attend performances. Some of my closest friends are dancers and choreographers. In a twist of lifes full circle, I now have a daughter who is already a more talented dancer than I ever was. Watching her on stage reminds me that what I once thought was the end of my story was really the beginning of hers. Thats the unexpected gift of setbacks. They dont just close doors. They open better ones. But only if youre willing to walk through them without the armor of perfection. Your best chapter may begin in your hardest moment As I advise CEOs and boards navigating complexity, I see a clear pattern. The most effective leaders are the ones whove been tested by hardship and hold their conviction while remaining open to challenge. Theyre the ones who understand that every stumble is an opportunity to rethink, reframe, and reemerge more strongly. In a world of relentless disruption, we need leaders who can metabolize failure into progress. We need leaders who understand that credibility isnt built on being right all the time, but on how you respond when youre wrong. So if youre facing a setback, dont rush to move past it. It could very well be the greatest gift you receive on your leadership journey. Embrace it, learn from it, and let it remake you. Because the story you planned might not be the story youre meant to live. And your best chapter may be the one that begins right after your biggest setback.
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E-Commerce
Its been 70 years since Douglas McGregor sketched a management theory at MIT Sloan that leaders still ignoreand their teams pay the price. Known as Theory X and Theory Y, McGregors framework built on Abraham Maslows work on employee self-actualization, and it quickly became one of the foundational texts of modern management thinking. In McGregors theory, leaders fall into two camps. Theory X managers assume that employees are inherently lazy, need constant supervision, and would rather coast along than contribute. Theory Y managers, by contrast, see employees as self-motivated, responsible, and capable of growth if given the right environment. And the kicker is that both kinds of managers usually get exactly the employees they expect, no matter who they originally hired. What McGregor was tapping into was the fact that certain beliefs have an uncanny way of turning into real, measurable effects on human behavior. Whether its placebo studies in medicine or examining how teachers’ expectations impact classroom performance, the science is unambiguous about how far-reaching effects simple expectations can have. The psychology behind high expectations Psychologists were among the first to observe and take note of the feedback loops that expectations set off. Take the now-famous study by Rosenthal and Jacobson in 1968. Elementary school teachers were told that a group of randomly selected students had been identified as “late bloomers” who were about to show remarkable academic growth. The result surprised even the researchers themselves. Those students did indeed outperform their peers, in part because the teachers, subconsciously or not, started treating them differently by offering more encouragement, more patience, and more challenging material. The students responded in kind, rising to the challenge now that someone in authority believed them capable of meeting it. The only thing that had changed was the expectations. Journalist David Robson chronicles just how far this phenomenon goes in The Expectation Effect, a book that should be required reading for leadership. From placebo heart surgeries that deliver real relief to workouts that burn more fat just because people believe theyre working harder, Robson lays out the scientific evidence showing how our expectations construct reality around us. The psychology behind the effect is simple: Your brain doesnt sit around waiting for input like a neutral recordkeeper. It ceaselessly guesses and simulates what might happen so that you can be prepared for whatever comes across your desk. At each moment, the brain is busy constructing an internal map of whats likely to happen, and then it updates that map based on whatever comes next. Its no surprise to find that our expectations prime the brains sensory and emotional circuits almost as if its already happening. If you are expecting pain, the amygdala lights up before you even stub your toe. If you expect failure, your cortisol rises, your attention narrows, and your working memory takes a hit before youve even started the task. Expect a sense of existential dread and meaninglessness at work? Here you go, says the brain, lowering your dopamine levels until motivation plummets because your brains prediction model no longer sees a reason to invest cognitive effort. Thats why a sugar pill can relieve chronic pain, why sham surgeries produce real outcomes, and why a warm-up jog feels harder if you think it’s the workout. The experience conforms to the prediction, and belief becomes biology. When leaders talk about setting the tone or creating a culture of excellence, theyre not that far from hitting upon something truly powerful. If we accept that expectations change biology, cognition, and motivation, then leveling them appropriately becomes one of leaderships central tasks. Be careful what you expect, because you might get it If you walk into a boardroom assuming your team lacks ambition, youll subconsciously act like it by designing processes that assume failure. Your team, in turn, will riseor in this case, sinkto the level you’ve set. Welcome to management by cynicism. Nelson Repenning, an MIT Sloan School of Management professor and coauthor of the new book Theres Got to Be a Better Way, has spent his career helping leaders break out of this cycle. He advises leaders to expect moreand betterfrom their people as a starting point. When people fail, we treat it like a character flaw. But in most organizations, failure is a design problem, he says. The question every leader should ask isnt why did they screw up? Its what about our system made it easy to screw up? Repenning and his longtime collaborator Don Kieffer argue that modern management has become too disconnected from the work itself. Youd be amazed how many executives cant describe how the work actually gets done, Kieffer says. Its like trying to fix a car without opening the hood. These leaders cant set a good expectation because theyre so far removed from reality to begin with. Without that intimacy, leaders default to assumptions, not expectations. Before long, youre managing caricatures of your team instead of the real people doing the work. Anyone can ask for a 17% increase in revenue and expect it to happen, Repenning says. But thats not a healthy way to set goals, let alone a culture of expectations. Leaders need to know what they are asking for, and they need to understand how powerful the expectations they set are. This is where too many leaders trip over their own lofty visions. They expect more, but enable less. Perhaps some even care less. Repenning calls this the paradox of servile leadership: Great leaders dont set expectations and step back. They ask, What do you need from me to get there? Then they go and move those boulders. The accompanying leadership model isnt that much more complicated. Set the target, communicate belief, and then roll up your sleeves to start fixing whats brokenwhether its systems, workflows, org charts, tools or, yes, your assumptions. McGregor and Maslow would be nodding along if they were still with us. Decades before we started talking about psychological safety and employee empowerment, they argued that the job of management was to unlock people’s natural drive. Give them autonomy and show them how their work connects to a bigger picture. Eliminate the management by the stopwatch, and start practicing management by the soul. Expectation is freedisappointment is expensive If you expect your team to take shortcuts, youll create a culture of cutting corners. If you expect your team to challenge ideas, theyll innovate. If you expect mediocrity, youll be surrounded by it. And the inverse holds, too. When leaders believe in their people, when they really believe in their capacity to achieve, something remarkable happens. People stretch to meet the expectations, and trust begins to compound. Done right, simply expecting greatness might do more than any retreat or bonus ever could, Repenning ays. But expecting isnt enough. You still have to earn it. Thats the fine print of McGregors theory, and the trap too many leaders fall into. They want the results of Theory Y, but still manage like they believe in Theory X. The message that sends is: I dont really think youve got it in you. But prove me wrong. Thats not leadership. Thats abdication. And now you know how to do better.
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