Circle of Influence, Competence and Concern

This lesson is about circles. Your Circle of Influence, your Circle of Concern, and your Circle of Competence. For those of you that recognise these concepts, you can probably see that I’ve cobbled them together from the work of Stephen Covey and from a term used by Warren Buffett. Despite being totally different concepts, I’m writing about them in the same lesson because then you won’t mix them up, and also I can draw some nice diagrams with circles in them.

Here’s a quote from Corrie Ten Boom that captures this perfectly. ‘Worrying is carrying tomorrow’s load with today’s strength, carrying two days at once. It is moving into tomorrow ahead of time. Worrying doesn’t empty tomorrow of its sorrow, it empties today of its strength.’

This quote gives us an indication of why these concepts are important. You’re wasting today’s energy on tomorrow’s problems, and you’re not even solving those problems. You’re just making yourself weaker for when they actually arrive. It’s a terrible strategy, but most people do it every single day.

Your Circle of Influence

In Stephen R. Covey’s book The 7 Habits of Highly Effective People, he introduced the concept of the Circle of Influence. This is a circle that surrounds you, and within it you have the ability to affect your environment. Within it are the things you can control to a degree, and the things that you have some leverage over, and probably the things you really need to worry about. Everything inside this circle is where your effort should go.

Your Circle of Concern

The Circle of Concern is a larger circle that surrounds your Circle of Influence. As you can see, part of this circle is outside your Circle of Influence. These are the things that you can’t at this time do anything about. It’s a way of saying that there are some things in life that still concern you but you have no influence or control over. The weather. The economy. Other people’s opinions. What happened in the past. These things concern you, but you can’t change them.

Here’s where most people get it wrong. They spend most of their energy in the Circle of Concern, worrying about things they can’t control, getting stressed about things they can’t change, arguing about things they can’t influence. It’s exhausting and it achieves nothing. Meanwhile, the things they could actually change, the things inside their Circle of Influence, get ignored because they’re too busy worrying about everything else.

This concept of the Circles of Influence and Concern can be taken a step further because as you grow as a person, you gain internal resources, new skills, your status increases and your network grows. In effect, this expands your Circle of Influence and you therefore have more influence in what concerns you in the real world. You can’t control the economy, but you can control your skills, your value, your network. You can’t control the job market, but you can control how employable you are.

Your Circle of Competence

The Circle of Competence is a concept described originally by Warren Buffett in a letter to his shareholders. He talked of two circles, the inner one being the Circle of Competence, what you really know, surrounded by another circle composed of the things you think you know. His letter was about the importance of investors selecting businesses they fully understood, in other words where their competences lay. Don’t invest in things you don’t understand. Sounds simple. Most people ignore it completely.

In life you build experience, skill, and knowledge in whatever area is your field of expertise. Some of this competence is in how you manage yourself, your life, and is based on the life skills you’ve learned along the way. These are the areas where you can make effective change. This is where you can confidently and competently make good decisions based on know-how and ability.

Outside this Circle of Competence is where you’re operating in areas you have less or little ability, and these are the areas where mistakes happen. Whether it be making poor investments in companies and markets you know little about, or whether it be attempting to ski down a black run the first time you’ve ever put on a pair of skis, going off piste away from where your competence and skill lie, you’re asking for trouble.

People make decisions in areas they know nothing about, and are then surprised when it goes badly. Someone who’s never invested decides to day trade stocks because they watched a YouTube video. Someone who’s never run a business decides to quit their job and start one with no preparation. Someone who’s barely exercised decides to sign up for a marathon next month. Often they’re operating so far outside their Circle of Competence that failure is almost guaranteed.

The problem is we overestimate our competence. We think that because we understand something at a surface level, we understand it completely. We think that because we’ve read about something, we can do it. We think that because we’ve seen someone else do it, we can figure it out. This is why Buffett talks about the things you think you know versus the things you actually know. The gap between those two circles is where disasters happen. As they say, assumption is the mother of all mistakes!

Many of us make the mistake of worrying about what we can’t control and even worse, actually getting in situations way out of our areas of competence that can lead us to disaster in our lives. You’re worrying about the global economy while you can’t manage your own budget. You’re concerned about climate change while you can’t control your own consumption. You’re stressed about politics while you can’t influence your own local community.

Where Your Energy Should Go

The message I’m trying to give you here is that the most important things need to be the things you should be worried about, the things you have some influence over, and the things that you have the skills to address. Everything else is noise. Everything else is distraction. Everything else is wasted energy that could be spent on things that actually matter.

Doing the simple things well that you can do, that you should really be worried about, will take you a long way. Much further than worrying about complex things you can’t control or attempting things you have no competence in. This sounds obvious, but look at how you actually spend your mental energy each day. How much time do you spend worrying about things in your Circle of Concern that are outside your Circle of Influence? How often do you operate outside your Circle of Competence?

A Practical Framework

Here’s what you need to do. First, identify what’s actually in your Circle of Influence. What can you actually control or affect? Your skills, your effort, your choices, your reactions, your habits, your attitude. That’s it. That’s basically the list. Everything else is either outside your influence or only partially influenced by you.

Second, stop wasting energy on things outside your Circle of Influence. You can’t control what other people think. You can’t control what happened in the past. You can’t control the weather, the economy, or politics beyond your single vote. Caring about these things is fine. Worrying about them is pointless. Letting them steal your energy from things you can control is madness.

Third, identify your Circle of Competence. What do you actually know? What are you actually good at? Where do you have real skills and experience? Be honest. Be brutal. Most people’s Circle of Competence is smaller than they think, and that’s okay. The goal isn’t to pretend you’re competent in everything. The goal is to know where you’re actually competent and operate primarily in that space.

Fourth, expand your Circle of Competence deliberately. You can’t become competent overnight, but you can become more competent over time. Choose areas that matter to you, areas that overlap with your Circle of Influence, and build real knowledge and skill. Not surface-level understanding. Real competence. The kind that comes from doing something repeatedly and learning from failures.

Fifth, when you must operate outside your Circle of Competence, do it carefully and with help. Get advice from people who are competent in that area. Move slowly. Expect to make mistakes. Don’t bet everything on decisions you’re making in areas you don’t understand. This is how people lose everything. They get overconfident, they ignore their lack of competence, and they go all in on something they don’t understand.

The overlap between your Circle of Influence and your Circle of Competence is where you should spend most of your energy. This is where you can actually make effective changes. This is where your efforts compound. This is where you get results. Everything else is just noise that makes you feel busy while achieving nothing.

Stop worrying about things you can’t control. Stop pretending you’re competent in areas you’re not. Stop wasting energy outside your circles. Focus on what you can influence and what you actually know how to do. Do those things well. Do them consistently. The results will follow, and your circles will gradually expand. But they’ll only expand if you stop wasting energy outside them first.

The Daily Practice

Here’s something worth trying as a daily reset. Each morning, before you look at the news, before you check social media, before you read the things designed to make you angry about things you can’t change, ask yourself one simple question. What can I actually do something about today?

Write down the answer. It’ll be shorter than you expect. Your health. Your work. Your relationships. The conversation you need to have. The task you’ve been avoiding. The skill you said you’d practice. That’s it. That’s your Circle of Influence for today. Everything else is the Circle of Concern, and you can spend your energy there or you can spend it where it counts.

Research by Langer (1989) on perceived control shows that people who focus their attention on what they can influence consistently report higher wellbeing, better performance, and greater resilience than those who focus on circumstances outside their control. This isn’t just feel-good psychology. It’s a measurable difference in outcomes. The people who direct their energy well don’t just feel better. They achieve more.

Your circles are not fixed. Your influence grows as you develop skills and relationships. Your competence grows as you practice and learn from failure. But neither grows when your energy is scattered across things you can’t change. Focus it. Narrow it. Direct it where it matters. And watch what happens when you do.

Further reading

• Covey, S. R. — The 7 Habits of Highly Effective People
• Buffett, W. (1996) — Berkshire Hathaway Annual Letter to Shareholders
• Epictetus — The Enchiridion
• Rotter, J. B. (1966) — ‘Generalized expectancies for internal versus external control of reinforcement’
• Ten Boom, C. — The Hiding Place