Contextual intelligence: the skill that allows you to make better decisions

The basis of any good career is knowing how to make the right decisions. The most successful people are usually characterized as being able to see things clearly in a way that few others do, seeing opportunities before anyone else, and acting accordingly. This ability has little to do with being brilliant academically, but rather being able to understand change, adapt to it, and know how to use it, so that instead of affecting you, it helps you to improve. This is what is known as situational or contextual intelligence and it is very useful in an increasingly uncertain and ever-changing work environment. Here we explain what it consists of, what kind of people have it, and how you can cultivate it.

What is situational or contextual intelligence?

When it comes to measuring intelligence, the most popular method has been to look at intelligence quotient or IQ, which is very focused on analytical capacity, and linguistic or mathematical abilities.

However, there are other types of intelligence less linked to academic achievements that are arousing more and more interest in the work environment, according to American psychologist Howard Gardner, who is often described as the father of the “theory of multiple intelligences”. These include emotional intelligence, which allows you to manage your emotions to adapt better to your work environment. But this is not the only one.

There is another type of intelligence linked to what is known as intuition or experience that allows us to successfully adapt to uncertain or unknown situations: contextual or situational intelligence. One of the first to refer to it was Yale psychologist and professor, Robert Sternberg, within his “triarchic theory of intelligence”, which states that it is made up of three parts:

• The analytical
• The creative
• The contextual or practical, which is related to experience or “street smarts”, a key element to functioning successfully in the real world.

Harvard Business School professor Tarun Khanna refers to contextual intelligence as “the ability to understand the limits of our knowledge and to adapt that knowledge to an environment different from the one in which it was developed.” Khanna uses this concept in the business world to explain, for example, why something that works in one place does not always work in another: many times the same solution is tried without taking into account what he calls the context. That might mean not considering aspects of the local culture, other points of view, or different ways of acting or behaviors, which can end up turning an opportunity into a failure.

Another characteristic of this intelligence is what Matthew Kutz, a psychology professor at Texas State University, calls three-dimensional thinking (3D thinking), by which the mind uses hindsight, perception, and foresight to tackle any given problem. That is to say, those who possess situational or contextual intelligence are able to extract valuable information about people, attitudes, and past behaviors, and then apply them to the current moment so as to work out how best to act.

At what point in your career might you need it?

Leading a team or being entrepreneurial

Having a better understanding of the real world allows you to make better decisions. Hence, this type of thinking is increasingly sought after by leaders and executives. Another prominent Harvard professor, Joseph Nye, defined situational intelligence as early as 2008 as “the ability to understand an evolving environment and to capitalize on trends. More specifically, contextual intelligence is an intuitive diagnostic skill that helps a leader to align tactics with objectives to create intelligent strategies in varying situations.”

In his view, understanding context is essential for effective leadership, since “leaders with contextual intelligence have the judgment to adapt to new waves and ride them to success”. They see opportunities where no one else does and take fewer risks. The most common example? Jeff Bezos bet on online commerce decades before anyone else knew what it was.

Contextual intelligence in daily life

It is not useful only to leaders and entrepreneurs. This ability can also help you to steer your career toward the most successful or favorable option. You can apply it to a new project or to the changes and challenges resulting from the recent pandemic.

To illustrate the usefulness of this intelligence at work, Sternberg described a situation in which an employee loved his job, his colleagues, and the place where he lived, but hated his boss. When contacted by a headhunter who offered him a better position in a nearby city, he declined the offer. He could have accepted it to get away from his boss, but instead, he recommended it to his boss, who took it.

Sternberg highlighted this as an example of a brilliant way to understand and handle this situation that allowed the worker to stay in the job he enjoyed so much and get rid of the only aspect he did not like: his boss. It was a win-win situation.

How to know if you have mastered contextual intelligence

People with contextual intelligence are characterized as having better control over new scenarios than others, as they are capable of perceiving elements of reality outside their technical knowledge and assessing them before making their decision. This results in better decision-making.

Having lived with or experienced different cultures, or having worked with people from different backgrounds, fosters the development of contextual intelligence, according to Khanna’s theory. This type of experience is also welcomed by companies. A study by the McKinsey consultancy shows that those companies that bet on diversity are more profitable and innovative. According to another study by Cloverpop, inclusive teams make better decisions 87% of the time.

To help identify this type of intelligence, Kutz established up to 12 associated behaviors:

1. Future mentality: you like to progress and you are very clear about what you want to achieve.
2. Ability to influence: you use interpersonal skills to positively and non-coercively affect the actions and decisions of others.
3. Social responsibility: you express concern about social trends and problems.
4. Cultural sensitivity: you promote and favor diversity in a variety of contexts.
5. Multicultural leadership: you can influence the behaviors and attitudes of peers within an ethnically diverse context.
6. Context analysis: you know how to interpret and react appropriately to a changing and volatile environment.
7. Change agent: you have the courage to ask tough questions and are proactive in facing challenges, leading, participating, or making changes.
8. Constructive use of influence: you use interpersonal skills and your personal influence to constructively and effectively affect the behavior and decisions of others.
9. Analysis of your knowledge: you evaluate your own work and are aware of your strengths and weaknesses.
10. Critical thinking: you are able to establish connections or relationships between different areas, fields, or environments, thereby obtaining novel points of view and opinions, which are not usually reached by the majority.
11. Consensus builder: you display interpersonal skills and convince others to see a different point of view through the use of listening skills, conflict management, and creating win-win situations.
12. Mission awareness: in environments where a certain level of hierarchy can occur, you understand and are able to show how the individual performance of others influences the perception of colleagues, subordinates, and managers.

Do you have it? Do you take advantage of it? Learn to develop it

Following Khanna’s theory, those companies that hire people who have lived and experienced different cultures or who work with people from different backgrounds, promote the development of contextual intelligence.

As Kutz points out in his book Contextual Intelligence, there are three processes that are essential when it comes to understanding and applying contextual intelligence. These will allow you to assess a situation from a broader perspective:

• Embrace complexity and surround yourself with different people. This will help you to know other points of view and enhance your creativity and perspective of the world.
• Be critical of your own opinions. Realise that in many cases they are influenced by your experiences and beliefs, which does not make them more valid or accurate. Try to go beyond them and put yourself in the shoes of others.
• Expand your knowledge about the world. Read, stay informed, consume culture and follow relevant characters who have something to say. Above all, try to make all these sources of knowledge as diverse as possible to get a global vision of things.

They say that great visionaries and successful leaders have this kind of intelligence. Now that you know what it is, you just need to put it into practice to achieve your goals.

Article updated on August 31, 2022
Original article posted on February 26, 2021

Translated by Sunita Maharaj-Landaeta

Photo: Welcome to the Jungle

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