Sunday, 25 August 2013

Confidence in our own judgements is part of being human but ensure that you do not confuse confidence with competence!

Over the course of nearly two decades of 'corporate servitude' I have seen one characteristic that defined most of the managers and executives that I came across. It was the level of confidence that they showed in their decisions. 

The word confidence in simple terms is a belief in oneself and one's powers or abilities. It has an element of certitude i.e. surety in oneself. They displayed a flair for portraying the surety of their decisions and related actions.

I also noticed that most of the decisions that were subsequently proven to be incorrect had also been supported and taken with the same confidence that they had shown when making a call for a decision that was proven to be subsequently correct!

In trying to figure out which manager or executive takes a more balanced approach to decision making i.e. showing true competence in delivering consistent outcomes from their decisions I started noticing a striking feature. Those that had a better track-record of taking consistently better decisions not only leveraged confidence but also had a very open approach to having themselves questioned and asking the right questions at the right time. It seemed that they were aware of the human proclivity to form early opinions and then look for confirmatory evidence to back up or justify the decision making process post-facto i.e. evidence to support the decision rather than spend time to review evidence to contradict or be the basis for devil’s advocacy! This attribute has roots in what is referred to as ‘Confirmation Bias’, which is defined as “a tendency for people to favour information that confirms their preconceptions or hypotheses regardless of whether the information is true. As a result, people gather evidence and recall information from memory selectively, and interpret it in a biased way.”

Coming back to understanding confidence, I feel that my concern is where confidence is not based on any competence but potentially an act of sheer bravado but given the panache with which it is undertaken ensures others go along with the decision. So why would a manager or senior executive take such a stance i.e. be overconfident in their competence given that the stakes are high and longevity in the corporate world is linked to correct decision making. The answer is that potentially they are using overconfidence as a means to show competence and signal that “I am in control”; after all the illusion of control is critical in the corporate world particularly for those in senior positions. 

A study (Anderson, Brion, Moore & Kennedy) found that overconfidence leads to higher social status and makes the individual appear to be competent. This is I linked to the reality that social status in an organisation is typically related to position in the hierarchy and if you want to be promoted to a higher position in the hierarchy then what better way than to  “fake it until you make it!” Their research also found that “overconfident individuals were more convincing in their displays of ability than individuals who were actually highly competent.”

Over-confidence is not only about esteem or a means to satisfy a psychological need or delivering a psychological benefit but more critically about being promoted above and over other potentially competent peers ("the competition"). In the corporate world where resources and promotional opportunities are limited (which is now the ongoing constant in times of rapid change!) then clearly any bias that can position a manager or executive and conveys the impression that he or she knows what they are talking about or doing is always a great place to be! Another point of view on which I blogged earlier is the Dunning-Kruger proposition that, for a given skill, incompetent people would in general have:
  • A propensity to overestimate their own level of skill
  • Be incapable of recognising the same genuine skill in others
  • Not understand how extreme their inadequacy is i.e. being incompetent rather than having low levels of competence. 

As Dunning clarified in a blog posting - “poor performers are overly confident relative to their actual performance. They are not more confident than high performers.” The following advice from Daniel Kahneman is very relevant - “You should not take assertive and confident people at their own evaluation unless you have independent reason to believe that they know what they are talking about.”

When considering promoting individuals there is a need to apply some insight and logic by digging deeper into the confidence being displayed by the individual under review. Rhetoric sometimes overshadows true competence and if there are sufficiently over-confident senior executives '(promoter') already in leadership positions then clearly membership to that ‘exclusive club’ (via promotion) will also entail that the new member ('promotee') have confidence as a valuable attribute! My plea is the ability to differentiate between true confidence and over-confidence. They are different attributes. Additionally, Robert Prentiss from an ethical point of view admonishes - “The overconfidence bias is the tendency of people to be more confident than is objectively justified by their abilities and characteristics, including in their moral character and their ability to act ethically.”

Where an individual listens or reacts to his or her own biases or has a propensity to ignore or neglect the wisdom of those around them then their luck is bound to run out at some point. There are rewards to being a manager and senior executive in the corporate world but the risks are there as well. However, the following advice is for everyone in the corporate world and offered in good faith.
I think it appropriate to close with this view-point from Robyn Benincasa -- “When you’re dealing with on-going challenges and changes, and you’re in uncharted territory with no means of knowing what comes next, no one can be expected to have all the answers or rule the team with an iron fist based solely on the title on their business card. It just doesn’t work for day-to-day operations. Sometimes a project is a long series of obstacles and opportunities coming at you at high speed, and you need every ounce of your collective hearts and minds and skill sets to get through it.”

What do you think? 


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