Nuala WalshCEO mind equity, a behavioral scientist and TEDx speaker, holds advisory board positions in business, sports, and non-profit organizations.
Why are so many intelligent, well-meaning individuals uncompromising in their positions and perspectives? Whether in mergers or trade decisions leaders consistently repeat the same mistakes, often rooted in narcissism and overconfidence.
A 2018 study showed that more than 65% of Americans believe they are above average in intelligence. In organizations it can be even higher. Overconfidence isn’t just a career concern; it could be a commercial risk or a societal threat. The higher up the leader, the less likely they are to accept opposing views.
As a behavioral scientist with thirty years of business experience, I’ve found that the most brilliant leaders understand that humility moves businesses forward faster, with fewer consequences. But they are rare. I have written how the greatest CEO failures executives can learn lessons in self-regulation from this unconscious bias.
An innate leadership flaw?
Successful leaders and entrepreneurs are naturally confident. It is an essential condition to adopt. But not to be confused with confidence: hubris is the unwarranted belief in the supremacy, validity and accuracy of your ideas, usually unfounded.
Many examples illustrate how leaders ignore man at the end of the balance sheet. Former CEO of crypto exchange FTX, Sam Bankman-Fried, is currently facing eight criminal charges by the Justice Department for embezzlement $8 billion in client funds of his trading company, Almeda. Elizabeth Holmes of Theranos sentenced to 11.25 years for wire fraud. The CEO of P&O Ferries was castigated lay off 800 people through zooming.
Usually, sycophants are complicit in perpetuating this curse of hubris. In my experience with clients, I find that motivations for not questioning leadership judgment range from fear of repercussions to unwillingness to forego material benefits.
Overcome the overconfidence curse
No leader wants to be labeled “selfish” or “narcissistic,” even if they display these traits. I’ve shared before how to recognize narcissism as an essential first step. I find that the most self-aware leaders tend to embrace three simple strategies to overcome this leadership curse.
1. Be humble.
It seems that the more successful we are, the more we think we are right. The endowment effect suggests that we overestimate items, ideas, and initiatives we own. For example, if you assemble an IKEA cabinet, you’ll probably value it more than one you buy. There is also more pressure than ever to be seen as smart. Customers almost expect a genius from highly paid executives. For example, investor Warren Buffet was described as the “Oracle of Obama” and Apple investor Steve Jobs as a “genius”. Such idolatrous labels can reinforce self-deception. Leaders can adopt humility toward employees and customers in a variety of ways.
• Practice self-reflection: Remember that your customers put you in your job. Reflect on your own beliefs and assumptions, considering how they shape the rigidity of perceptions.
• Encourage others to share opinions: Engage in dialogue to collect idiosyncratic views. Some executives try to argue with themselves to broaden the debate and explore every possible scenario.
• Use decision frameworks: Structured frameworks show the flaws in your arguments and help you evaluate potential outcomes more objectively and realistically.
2. Be open.
One of the best ways to counter egocentric bias is to consider alternative views. However, Research shows that experts are less likely to consider information that challenges existing beliefs, and rely on their own expertise. Leaders can practice taking advice better in several fundamental ways.
• Find confirmatory information: Look for evidence that contradicts your beliefs and be prepared to change your mind when presented with new information.
• Request feedback: Ask for feedback from others, especially about important decisions that can help identify overconfidence.
• Be open to other ideas: Be open to new ideas and perspectives, even if they differ. It is a sign of professional character to change your mind and ask for help or a second opinion rather than stubbornly following a preferred path.
3. Be human.
Today’s stakeholders will hold you accountable for people-centered and compassionate leadership. For some, compassionate leadership seems like a trendy buzzword punctuated by obligatory expressions of kindness and well-being. Leaders can practice humanity toward employees, customers, and even themselves in a variety of ways.
• Show empathy: Memorize your own journey to your current position. Understand where others are coming from and show appropriate compassion for their concerns. Try until you understand how your decisions affect others.
• Stay yourself: Don’t be afraid to show your team who you really are. They’ll appreciate it. However, I find cold and calculating leaders to be completely transparent, especially virtue signallers. In most cases, employees and customers can cancel those they deem fake. If you can’t or don’t want to lead people, you might be better off working with tools or data.
• Recognize the value of diversity: It is no longer cliché but mandatory. Consciously involve people from different backgrounds in your decision making. Easier said than done, but joining forces with others makes it easier to create a culture that respects diversity.
An ego that is too big costs. Misplaced overconfidence can crash any business faster than you think. You need only take flawed corporate or government policy decisions as evidence.
Overconfident leaders can usually ignore arbitrariness and attribute success to their own talent. This can be exacerbated when you think you are immune to harm and can reduce the tendency to learn or course correct. However, these strategies show that expert overconfidence can be mitigated by a diverse group of complementary experts, feedback, and self-reflection.
Don’t let overconfidence get the better of your career or the well-being of colleagues, clients and communities. That’s a skill worth honing in any leadership playbook.