Competence isn't a single axis. Nobody's a genius at everything. E.g., great programming skill does not automatically confer high social skill, good business sense, appreciation of experience design, or ability to wrangle meetings.
If it will help everybody, please forget I mentioned Dunning-Kruger in specific. That's the inspiration for the question, not the heart of it.
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The most important horn of the effect is dependent upon hiring incompetent people. What makes you think they hire incompetent people?
Moreover, this question could also be reduced to a question about their hiring in general.
Competence isn't a single axis. Nobody's a genius at everything. E.g., great programming skill does not automatically confer high social skill, good business sense, appreciation of experience design, or ability to wrangle meetings.
If it will help everybody, please forget I mentioned Dunning-Kruger in specific. That's the inspiration for the question, not the heart of it.