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The wildly popular Lion of the Blogoshere is the latest blogger I’ve seen commenting about a study showing that Swedish elite CEOs have a mean IQ of 115. He writes:

These findings are consistent with my previous speculation that most career tracks have cognitive floors, and once you are above the cognitive floor, having additional higher IQ isn’t of much use. The cognitive floor for management positions in corporations seems to be around 110 or so. After that, getting promoted requires personality traits that are correlated with “fitness for the military” rather than higher IQ.

This idea that IQ is quite important below a certain threshold, but quite unimportant above that same threshold is very popular and potentially true, but I’ve always preferred a simpler model that splits the difference: IQ is mildly important across virtually all levels.

I don’t know if my simple model is true, but the paper seems to show that minor CEOS have a mean IQ of 108 and major CEOs have a mean IQ of 115. Now the paper defines minor CEOs as CEOs running 8 figure companies ($15 million or less) and major CEOS as running a 10 figure company (more than $1.5 billion USD). From here, we can speculate, that for every tenfold increase in company size, the average IQ of the CEO increases by 4 points. So:

Million dollar companies: Average CEO IQ 104
Ten million dollar companies: Average CEO IQ 108
Hundred million dollar companies: Average CEO IQ 112
Billion dollar companies: Average CEO IQ 116
Ten billion dollar companies: Average CEO IQ 120
Hundred billion dollar companies: Average CEO IQ 124
Trillion dollar companies: Average CEO IQ 128
Ten trillion dollar companies: Average CEO IQ 132

Of course there’s no such thing as a ten trillion dollar company, however the sitting president of the United States is often described as America’s CEO. The United States has a GDP of about 17 trillion and preliminary data suggests that U.S. presidents have an average IQ around 130, about what you’d expect from the CEO of a company the economic size of America.

So I don’t necessarily agree that the importance of IQ suddenly drops beyond a certain threshold; instead I see IQ as mildly but equally important across virtually the full range, but I could be wrong because comparing presidents to CEOs is not exactly an apples to apples comparison, and an economist could probably come along and rip this analysis to shreds.

The Lion of the Blogosphere also writes:

The problem here is that while an IQ of 110 to 115 is high enough to get promoted through the corporate ranks, it’s not smart enough to make smart decisions about the direction of the business. This explains why most corporations are so poorly run and continually make costly business mistakes.

I agree with this 100% but I would go a lot further and say that an IQ of 130 is not smart enough to be president of the United States. That doesn’t mean there haven’t been terrible presidents with IQ’s way above 130 and excellent presidents way below 130, but the lower IQ great presidents were probably great in spite of their lower IQ’s, not because of them; or because of certain personality traits correlated with lower IQ, rather than the lower IQ itself being beneficial. In fact I think the job of an American president is so complex that none of them have been smart enough for the job, and that’s probably why the correlation between IQ and job performance among presidents is so low. When everyone is in over their heads, success and failure will be largely determined by luck.

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