Embedded Technology Groups and the Dunning-Kruger Effect

An embedded technology group is a group that operates within a larger organization (the Host), and which provides critical supportive technology services to the Host. Critical supportive technology is technology that's necessary for accomplishing the Host's mission, but which isn't central to that mission. An example of an embedded technology group is the cybersecurity function within a consumer cosmetics manufacturing company. Cybersecurity is critically necessary, but not central to cosmetics manufacturing. Another example: the IT department within a regional supermarket chain.

Such embedded technology groups face special challenges as they meet the needs of the Host. For example, the IT department of the supermarket chain might encounter difficulty explaining to senior management why it is not economical to continue to use a perfectly operational computer software product that's within six months of end-of-life support.

Most challenges like this seem mundane and predictable, but their frequency of occurrence, and the intensity of their consequences, could be due, in part, to a cognitive bias known as the Dunning-Kruger Effect. [Kruger & Dunning 1999] In this post I explain the Effect and why it intensifies otherwise-mundane decisions.

Brief summary of the Dunning-Kruger Effect

The As Kruger and Dunning put it, "…the skills that engender
competence in a particular domain are often the very
same skills necessary to evaluate competence in
that domain — one's own or anyone else's."Dunning-Kruger Effect is a limitation with respect to achieving mastery of a knowledge domain. That limitation derives from one fundamental principle that underlies the Dunning-Kruger Effect. It is that with respect to any particular knowledge domain, our ability to accurately assess our own or others' relative competence requires competence in that knowledge domain.

As Kruger and Dunning put it, "…the skills that engender competence in a particular domain are often the very same skills necessary to evaluate competence in that domain — one's own or anyone else's."

Dunning and Kruger express the consequences of this principle as four predictions, paraphrased as follows:

• The less competent tend to overestimate their own competence
• The less competent tend to be less able to recognize superior competence
• The less competent tend to be less able to use information about the performances of others to assess their own competence
• The incompetent can gain insight about their own incompetence, but only by becoming more competent

By implication, we can also predict that:

• The more competent tend to underestimate their own competence
• The more competent tend to gauge accurately the incompetence of the less competent

Consequences of Dunning-Kruger for embedded technology groups

The Dunning-Kruger Effect has consequences for the relationship between an embedded technology group and its Host. A bit of notation will simplify the discussion.

Let H-Manager denote a Senior Manager of the Host organization; H-Domain denote the knowledge domain central to the Host operations; and H-Competence denote competence in the H-Domain. Let E-Manager denote a manager of the embedded technology group; E-Domain denote the knowledge domain central to embedded technology group operations; and E-Competence denote competence in the E-Domain.

Now consider a situation in which an H-Manager must make decisions that affect the strategy, staffing, and/or resources of an embedded technology group. In what follows, I suggest that this arrangement is vulnerable to the Dunning-Kruger Effect. When the H-Manager is less E-Competent than any of the E-Managers, Dunning and Kruger predict that the H-Manager will tend to overestimate his/her own E-Competence. Moreover, the H-Manager will tend to be less able to recognize the superior E-Competence of E-Managers.

The consequences of these tendencies are negative and severe for the Host. If a situation arises in which the judgment of the H-Manager suggests adoption of a decision contrary to the recommendations of the E-Managers, then according to the Dunning-Kruger Effect, the H-Managers will tend to choose a path more closely aligned to their own judgment than a rational judgment would predict.

Workarounds for the Dunning-Kruger Effect

We might have been compensating for the Dunning-Kruger Effect in ways outside of our awareness for some time. Consider, for example, the practice of establishing what we call "skunk works." The term "Skunk Works" is the official pseudonym for Lockheed Martin's Advanced Development Programs (ADP), formerly Lockheed Advanced Development Projects. But the term is now used generically to denote a unit that's insulated — physically and culturally — from the host organization's procedures and customs. In one way of understanding the insulation, it provides freedom to break out from psychological constraints on ideation and experimentation. But it might also reduce the risk of having the Dunning-Kruger Effect enable bureaucratic meddling in the operations of the protected unit. In that sense, a skunk works is a workaround for the Dunning-Kruger Effect.

Last words

When described as "tendencies," the consequences of the Dunning-Kruger Effect sound mild — even tolerable. But they are not. In organizations, the Dunning-Kruger Effect causes people in responsible roles with wide spans of control to make erroneous decisions that have broad organizational impact — broad enough to present risk great enough to threaten the organization's existence. Even more damaging is the inability of H-Managers to recognize that undesirable outcomes of past decisions could be the result of the Dunning-Kruger Effect.  Top    Next Issue

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Embedded Technology Groups and the Dunning-Kruger Effect  [March 12, 2025]

Groups of technical specialists in fields that differ markedly from the main business of the enterprise that hosts them must sometimes deal with wrong-headed decisions made by people who think they know more about the technology than they actually do.

Footnotes

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