The dangers of overconfidence

As we’ve seen, the tendency to overrate our abilities and be more confident than we should applies to both men and women—remember the driving example? Both men and women rated themselves as above average. But men do this much more frequently than women do. In that poll of drivers, for example, men were 11 percentage points more overconfident than women.

Another example comes from a 2012 study led by Columbia University’s Ernesto Reuben and colleagues. Again, both male and female participants in the study overestimated their abilities on a math task, but men overestimated their abilities by about 30 percent, whereas women only overrated themselves by 15 percent. In an ingenious follow-up study, the researchers divided the participants into teams that would compete to solve a math problem. Each team had to elect a leader to represent them; since there was a cash prize for the winning team, it was in each team’s interest to select the most competent representative. But Reuben and colleagues changed the rules for some of the teams. In these teams, the chosen representative would be paid a bonus just for serving in that leadership role. As we would expect, both men and women in these teams exaggerated their abilities in an effort to win the leadership role and the bonus. But men exaggerated their abilities far more than women did and were chosen as leaders more often. As the researchers found, women were selected as leaders 30 percent less often than their competence level would predict.

As noted earlier, even if overconfidence pays off for the individual, it seldom pays off for the person’s subordinates. Despite the accuracy of this observation, our love for confident people often leads us to the misguided conclusion that high confidence is advantageous per se.

Why are men more likely to be overconfident? While some kind of deep-seated evolutionary adaptation might have produced this gender difference, the simplest explanation is that men are more likely to live in a world in which their flaws are forgiven and their strengths magnified. Thus, it is harder for them to see themselves accurately. Overconfidence is the natural result of privilege.

Although there are some benefits to overconfidence in a leader—as we’ve seen, it can produce some self-fulfilling effects, making others believe that the leader is as good as he or she thinks—the downsides are enormous, particularly for others. Consider David Cameron. The former British prime minister’s overconfident decision to call for a referendum on the country’s European Union membership has led to Brexit and jeopardized not only the future of the United Kingdom but also that of Europe. And sadly—for both him and his country—the referendum was really a silly lapse. Cameron had been performing well as prime minister, with relatively high approval ratings even among his natural critics. With a strong economy and a positive reputation, Cameron thought he could silence the anti-European members of Parliament in his party by agreeing to a national referendum on the United Kingdom’s EU membership. As a strong pro-Europe figure, he was clearly confident that the referendum would go his way, underestimating the probability—and the consequences—of a negative result. Fast-forward two years, and his political career is finished, with his country still experiencing huge uncertainty and in total damage-control mode.

Overconfident decisions that lead to bad results are, of course, nothing new, as evidenced by countless catastrophic leadership mistakes, including Napoleon’s march on Moscow, John F. Kennedy’s Bay of Pigs invasion, and the Vietnam War. By the same token, overconfident leaders routinely put themselves forward for tasks for which they are not qualified or equipped, and their lack of competence seriously handicaps the performance—and morale—of their teams.

One reason overconfident leaders are more prone to reckless decisions is that they are immune to negative feedback. Most people already find it hard to digest criticism, and most organizations and societies encourage a civil environment where white lies are preferred to painful truths. For every Uber, Amazon, and Bridgewater— these and a handful of other firms that have put in place brutally honest cultures where “radical transparency” is the norm—thousands of companies believe that telling the truth is not just politically unwise but also career suicide. There is even a recent trend to eliminate negative comments from the performance review, with companies like VMware (Dell’s cloud computing division), the e-commerce platform Wayfair, and Boston Consulting Group all reportedly shifting toward purely positive feedback. This trend turns the performance review into a futile exercise of ingratiation where the best that employees can hope for is the ability to read between the lines to gauge what their managers want from them.

To make matters worse, leaders are even more deprived of negative feedback than employees are. The more successful and powerful you are, the more that people will suck up to you—even when they think poorly of you. Leaders must therefore be unusually self-critical and humble to anticipate potential criticisms and aspire to do better. Research shows that the most accurate criticism would come from a leader’s direct reports, because they have the closest knowledge of the leader’s performance. But how many employees would feel free to regularly criticize their boss? Very few, and they probably work for an exceptionally good leader if they feel free to criticize him or her. However, since most leaders—in particular, men—are overconfident about their performance, it would be naive to expect them to accept negative feedback or criticism, especially from their reports.

Conversely, individuals who are aware of their weaknesses and have a realistic sense of their limitations could tune in to their subordinates and understand what they need to do to improve, but they would first need to become leaders! In an environment that selects leaders for overconfidence, people who are overly self-critical—perhaps even a tad insecure—should be in high demand, but they are more likely to be ignored or ridiculed, on the assumption that they are not sufficiently strong or secure to lead. Anyone who has ever coached a leader knows that the most coachable people are unlikely to think of themselves as better than they actually are.

And despite the common perception that confidence is a highly desirable quality, it is desirable only if it is accompanied by actual competence. As both Dizzy Dean and the great Mohammed Ali have said, “It ain’t bragging if you can back it up.” People will generally celebrate your confidence, unless they believe that it is not based on real competence, or that you think more highly of yourself than you should. Think of any person you ever disliked because he or she seemed arrogant. The problem was not a lack of confidence, but rather too much of it relative to the person’s actual abilities.

Unfortunately, for most organizations—unlike in sports or the military—there is little objective data to evaluate the performance of leaders. When you cannot adequately judge competence, it is hard to recognize overconfidence, and the incompetence it masks.

Ref: Why Do So Many Incompetent Men Become Leaders?

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