Incompetency occurs when people make decisions based on the information that they have but you have far more information. Sometimes this is their fault (ie: ignoring instructions, failing to learn from past mistakes). Sometimes this is caused more innocently because they are simply stupider or more ignorant than you are. Sometimes they didn't begin with the information they needed to complete the task / make the decision you would have made.

Thusly, I begin by calling whoever caused this annoying pain point a massive idiot and deciding I am far superior than them.

Then I take a deep breath and attempt to figure out how to solve the problem caused by the incompetency as painlessly as possible.

As an example:

My boss responds to a client without checking with the creative team first. His answer to the question is dead wrong and he also wrongly assumed that the changes they requested were simple ones. They aren't. Typically, if I were in control, the request would have prompted a change order and additional payment. Initially, I scream (internally) "you're a fucking idiot, boss." Then I say okay. Then I breath. Then I have a smoke. Then I figure out what it will take to make the changes and let him know. Then I make the changes. He's the one losing money over and over by doing free work. I still get paid.

PS: I would love to see kleinbl00's response to this. He seems to handle it in a variety of ways. :p