Investing in Practical Intelligence: Ageing and Cognitive Efficiency among Executives

Abstract

This paper has two objectives. (1) To review in part empirical evidence obtained in a recent study on practical intelligence in bank managers (Colonia-Willner, 1998). (2) To discuss the implications of these findings for the study of practical intelligence, expertise, and compensatory abilities. The first goal of the initial study was to determine whether managerial practical intelligence is preserved in older bank managers whereas differences in psychometric measures of reasoning are associated with age. The second was to verify whether practical intelligence measures better predict managerial job performance than traditional psychometric tests. Two hundred bank managers (43 experts and 157 nonexperts) participated in the initial study. Increased age appeared to be associated with lower performance in the Raven’s Advanced Progressive Matrices (Raven’s) and the Verbal Reasoning subtest of the Differential Aptitude Test (DAT), but less so with the Tacit Knowledge Inventory for Managers (TKIM). Although scoring lower on psychometric reasoning measures, the best performing older managers, on average, exhibited high levels of tacit knowledge, an instantiation of practical knowledge acquired in situations where information is not openly expressed. TKIM predicted managerial skill; DAT and Raven’s did not. These findings suggest: (1) that stabilisation of some aspects of intelligence may occur in old age; and (2) that domain-specific knowledge may contribute to compensation for age-related losses in functioning.