Innovation is Not Rewarded

Tuesday, November 10th, 2009

Innovation is not rewarded, Eric Falkenstein says, because thinking different generally isn’t a good idea:

I personally have known a lot of really smart people and have to say they are more unconventional in their ideas, yet most of their ideas are crazy. If you have ever been to a Mensa meeting (IQ but little formal education), you realize how things like homeopathy, or truthers, get their bearings. If you have ever hung out with PhDs, you know how limited their competence scope is (at research universities they have the same IQ as Mensans, but are more disciplined and less creative). It’s no wonder guys like stereotypical MBAs, who are not so analytical but rather personable and articulate, tend to dominate society. I suspect MBA rule is less catastrophic than PhD or Mensa rule, if only because they aren’t as certain of themselves. This all gets back to the idea there is an optimal IQ, and it’s not 180, but rather, say, 125 (probably the modal IQ for any large group leader, such as Presidents and CEOs).

Being smart is a good thing, and I’m happy when my kids do well on cognitive tests because of what this portends for their life (as Charles Murray noted, most people would prefer their kid had 15 more IQ points than get $1 million on their 21st birthday). Yet highly intelligent people tend to innovate more, and such innovation tends to be counterproductive for the innovator. So, the fact really smart people can answer a question faster or more accurately than others, is at some point offset by the fact that when they have to supply the question — as is the case once they leave formal schooling — they will be attracted towards less conventional, usually irrelevant or wrong, paths. For every Steve Jobs or Albert Einstein there were many who lived and died in obscurity; for every Black-Derman-Toy there are hundreds of insanely convoluted, in-house models, of no value.

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