Four Stages of Competence

Let’s talk about how you learn things and how understanding the learning process can help you create a sale-ready company.

You may have heard of the four stages of competence. Knowing and applying these stages can make a major difference in your business journey. Let’s dive into each stage and explore a story demonstrating this strategy’s power.

1. Unconsciously incompetent. At this stage, you don’’t know what you don’t know. It’s like thinking you’re a great swimmer until you jump into the deep end and realize you’re over your head. Ignorance might feel blissful at first, but reality eventually hits.

2. Consciously incompetent. This is where self-awareness kicks in. You realize how much you need to learn and understand. It’s a humbling phase, but recognizing your limitations is the first step toward growth. Now that you’ve learned you can’t swim properly, you start looking for swimming lessons.

3. Consciously competent. With effort and practice, you reach a point where you can execute tasks competently, though it requires focus and dedication. Every step you take is deliberate and thoughtful. You’ve now taken those swimming lessons and can swim, but you still need to think about each stroke.
4. Unconsciously competent. Finally, you reach a stage where skills become second nature. You perform tasks seamlessly without thinking about them, almost like muscle memory. You’re now swimming effortlessly without thinking about each stroke, enjoying the water.

Applying the four stages to building a sale-ready company

Understanding these stages is vital in preparing a company to be sale-ready. Each phase requires distinct strategies and learning curves.

Stage 1: Unconsciously incompetent. When you’re at the stage where you don’t know what you don’t know, your company is likely operating inefficiently without you even realizing it. At this point, ignorance might feel blissful, but deep down, existing problems are percolating.

For example, imagine you’re running a bakery. You think everything is running smoothly because customers come in and sales are steady. But eventually, you realize that your supply chain is a mess and your staff lacks proper training. Recognizing these flaws happens when you hit a major roadblock—like a sudden drop in sales or customer complaints.

Stage 2: Consciously incompetent. As self-awareness kicks in, you see the gaps in your business operations. This is a crucial, albeit humbling, phase. Now that you know the issues, you can seek knowledge to address them. Continuing with the bakery example, you might attend business workshops or seek mentorship. You become aware of your supply chain issues and recognize that staff training needs immediate attention. You might feel overwhelmed during this phase, but remember, it’s a necessary step for growth.

Stage 3: Consciously competent. After gaining knowledge and guidance, you start implementing new strategies. This stage involves rigorous training, process enhancements, and constant feedback loops. Returning to our bakery, you actively train your staff, establish a more efficient supply chain, and create new protocols to streamline your operations. It requires focus and dedication, but your business becomes more structured and reliable. Every decision is made carefully, and you start to see improvements. For instance, customers notice better service, and your supply chain starts operating seamlessly.

Stage 4: Unconsciously competent. Finally, your business operations reach a point where everything runs smoothly and efficiently without much thought. Your team is well trained, your supply chain is optimized, and daily operations flow seamlessly. Your bakery now runs like a well-oiled machine. You no longer have to supervise every little detail because your protocols are ingrained in your staff’s daily routines. Your business is sale-ready because it demonstrates operational efficiency and reliability—critical traits for potential buyers. And the key here is your company is now one that others would want to own. It doesn’t mean you want to sell it.

This is the path of learning that every new business owner goes through, even if they have an MBA, or have been a business major as an undergraduate. 

What do you think about the four stages of competence? How have these stages played out in your personal or professional life? By understanding and applying these stages, you can make major improvements in your business and personal life. Remember, each stage is a stepping stone towards becoming more skilled, effective, and ultimately, ready for your next big opportunity.