Dunning-Kruger, no matter that it doesn't predict the competence of a person based on their confidence, has significant consequences. For example, take a large group of people. Note that their competence in some field is a random variable with probably a gamma distribution. In other words, most people are around average competence and as you move into higher competence, there are considerably less people. Now allow those people to self organize and choose leaders. To make things simple, lets split everything up into groups of 10 people. 10% are leaders. They are chosen for their self confidence and outgoing nature.
Interestingly, this will favour the less competent people, because they will be more confident. In fact, because most people are grouped around the middle, it will be difficult for them to distinguish competent from incompetent. This could make the incompetent candidates very much more successful. Now consider a second round. We are going to take 10% of the leaders and make them super leaders. They will be chosen by their peers based on their self confidence and outgoing nature. But now most of the people making the decisions are of lower competence. This will favour the incompetent even more.
This is the beginning of a "talent inversion". Incompetent, but confident people rise to the top while competent, but cautious people stay at the bottom. Now imagine the politics that will evolve from this very simple starting point. Every time an incompetent senior person asks for the impossible, an incompetent junior person confidently strides up and promises results. Because they are both incompetent, they can happily fail, but convince themselves that they have actually succeeded. If you have ever worked in a big company, then you probably don't have to imagine.
In other words, because of Dunning-Kruger life is unlikely to be a meritocracy. There are clear advantages to being competent, but one should not overlook the network effect of a group of confident, but incompetent people. Understanding that *you must deal with these people to ensure success* is key. In my career, I have found that borrowing some confidence from an "incompetent" co-worker, while lending some of my "competence" has been very successful. In fact, it is so useful to me that I have redefined my definition of competence. In truth, I was never very successful until I learned to look at things from other perspectives. No matter how right you are, if you can't act on it, it doesn't make much difference. And even if you are very wrong, acting often wins the day.
It's a bitter pill to swallow for someone whose ego is bound up in their competence. But life is not fair.