Tuesday, February 02, 2010

Smart Fraction Theory applied to BT

The utility of IQ tests is that IQ scores correlate well with success in jobs with equivalent cognitive demands. It's fairly obvious that the cognitive demands of floor-sweeping for example are somewhat less than those demanded to be a world-class theoretical physicist.

But of course the IQ requirements to do different kinds of jobs are much more finely grained than that extreme example. Here's the result of one such study (click on the image to make it large enough to read) - the white vertical lines in each IQ-bar are the 25th, 50th and 75th percentiles.

Smart Fraction Theory notes that a modern complex economy requires mass participation in many occupations with significant cognitive demands. Technicians, entrepreneurs, accountants, legal people, designers are all needed by the hundreds of thousands and these jobs need intelligence if they are to be done properly. It follows that a successful, functioning modern economy needs a large fraction of its population to have an IQ in excess of something like 108: the so-called "smart fraction".

What happens if the population doesn't have this amount of human capital? Then these required occupational slots get filled by people who are not that smart. They don't "get it"; they don't understand what the problem is; they make elementary mistakes over and over again; their work needs continual checking and fixing by the few, more senior people who are sufficiently smart. In short, things just don't work very well all of the time.

Smart Fraction theory doesn't just apply to countries. It also works for big companies and their staffing policies - in particular the situation currently obtaining within BT customer services (see previous post).