Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 15, Issue 15;   April 15, 2015: Overconfidence at Work

Overconfidence at Work

by

Confidence in our judgments and ourselves is essential to success. Confidence misplaced — overconfidence — leads to trouble and failure. Understanding the causes and consequences of overconfidence can be most useful.
Deputy Secretary of Defense Wolfowitz, Defense Secretary Rumsfeld, and President Bush in a press conference on September 17, 2001

Left to right, Deputy Secretary of Defense Paul Wolfowitz, Defense Secretary Donald H. Rumsfeld, and President George W. Bush, conduct a press conference on September 17, 2001, at the Pentagon. They had met to continue planning an appropriate military response to the al Qaeda threat. They held a press conference after the meeting. Certainly, over the months and years following, this team and many other members of the administration underestimated the scale of the problems they faced. Mr. Wolfowitz, in particular, expressed views far more optimistic than — and contrary to — the evidence-based views of many experts. One of his most often quoted comments about the cost of the Iraq War is that in the case of Iraq, the United States is dealing with "a country that can really finance its own reconstruction and relatively soon." Defense Department photo by R. D. Ward.

Overconfidence is the state of having too much confidence — confidence beyond levels justified by evidence. One trouble with that definition is that it provides little useful insight: how much is too much? A second trouble is that it exemplifies itself, in that it presumes that levels of confidence can be assigned with, um, confidence. Often we can do no such thing. Situations affected by overconfidence include hiring, making strategic choices, chartering projects, cancelling projects — indeed, most workplace decision-making. Despite the vagueness of the concept of overconfidence we can make useful conclusions, if we examine the concept more closely.

That's what Don Moore and Paul Healy did in a 2008 paper — cited in over 800 other works (according to Google Scholar), which is a goodly number for such a short time. The authors note that conflicting results in overconfidence research can be resolved when one realizes that the term overconfidence had been used to denote three different classes of judgment errors. They are:

  • Overestimation: assessing as too high one's actual ability, performance, level of control, or chance of success.
  • Overplacement: the belief that one is better than others, such as when a majority of people rate themselves "better than average."
  • Overprecision: excessive certainty regarding the accuracy of one's beliefs.

These tendencies are not character flaws. Rather, they arise from the state of being human — not in the sense of "to err is human," but, as a direct consequence of human psychology.

What is surprising is how little we do in organizations to protect ourselves and the organization from the effects of overconfidence. Indeed, some of our behaviors and policies actually induce overconfidence. Here are three examples.

Unrealistic assessments of the capabilities of others
A phenomenon known as the Dunning-Kruger Effect causes us to confuse competence and confidence. That is, we assess people as more capable when they project confidence, and inversely, less capable when they project uncertainty. This can lead to decision-making errors in hiring, and in evaluating the advice we receive from subordinates, consultants, experts, and the media.
Unrealistic standards of precision
When we Situations affected by overconfidence
include hiring, making strategic choices,
chartering or cancelling projects —
indeed, most workplace decision-making
evaluate projected performance for projects or business units, we require alignment between projections and actuals. The standards we apply when we assess performance typically exceed by far any reasonable expectations of the precision of those projections. This behavior encourages those making projections to commit the overprecision error.
Unrealistic risk appetite
Assessments of success in the context of risk, and our ability to mitigate risk, are subject to overestimation errors. By overestimating our chances of success, and our ability to deal with adversity, we repeatedly subject ourselves to higher levels of risk than we realize.

Cognitive biases that contribute to overconfidence in its various forms include, among others, the planning fallacy, optimism bias, illusory superiority, and, of course, the overconfidence effect. Most important, the bias blind spot causes us to be overconfident about the question of whether we ourselves are ever overconfident. We surely are. At least, I think so. Go to top Top  Next issue: Quips That Work at Work: Part I  Next Issue

For an extensive investigation of the role of overconfidence in governmental policies that lead to war, see Dominic D. P. Johnson, Overconfidence and War: The Havoc and Glory of Positive Illusions, Cambridge, Massachusetts: Harvard University Press, 2004. Order from Amazon.com

Read Kruger and Dunning's original paper, courtesy the American Psychological Association.

For more about the Dunning-Kruger Effect, see "The Paradox of Confidence," Point Lookout for January 7, 2009; "How to Reject Expert Opinion: Part II," Point Lookout for January 4, 2012; "Devious Political Tactics: More from the Field Manual," Point Lookout for August 29, 2012; "Wishful Thinking and Perception: Part II," Point Lookout for November 4, 2015; "Wishful Significance: Part II," Point Lookout for December 23, 2015; "Cognitive Biases and Influence: Part I," Point Lookout for July 6, 2016; and "The Paradox of Carefully Chosen Words," Point Lookout for November 16, 2016.

303 Secrets of Workplace PoliticsIs every other day a tense, anxious, angry misery as you watch people around you, who couldn't even think their way through a game of Jacks, win at workplace politics and steal the credit and glory for just about everyone's best work including yours? Read 303 Secrets of Workplace Politics, filled with tips and techniques for succeeding in workplace politics. More info

Your comments are welcome

Would you like to see your comments posted here? rbrenMaHMJiCZFpTNhZiOner@ChacMHMezoGeNKvzaxuMoCanyon.comSend me your comments by email, or by Web form.

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Personal, Team, and Organizational Effectiveness:

Approaching the Emerald City from the Yellow Brick RoadLet's Revise Our Rituals
Throughout the workday, we interact with each other on many levels. Some exchanges are so common and ritualized that we're no longer aware of them. If we revise these rituals slightly, we can add some zing to our lives.
USS Lexington, an early aircraft carrierTroublesome Terminology
The terms we use at work to talk about practices, policies, and procedures are serviceable, for the most part. But some of them carry connotations and hidden messages that undermine our larger purposes.
The Challenge vs. Skill diagram, showing the "Flow" regionTop 30 Indicators That You Might Be Bored at Work
Most of the time, when we're bored at work, we know we are. But sometimes, we're bored and we just don't realize it. Here are some indicators of boredom that might escape some people's notice.
Three simple carabinersTeam Risks
Working in teams is necessary in most modern collaborations, but teamwork does carry risks. Here are some risks worth mitigating.
An egg sandwichThe Power and Hazards of Anecdotes: Part I
Anecdotes are short stories — sometimes just a single sentence. They're powerful tools of persuasion, but they can also be dangerous, to both anecdote tellers and anecdote listeners.

See also Personal, Team, and Organizational Effectiveness and Critical Thinking at Work for more related articles.

Forthcoming issues of Point Lookout

A vizsla in a pose called the play bowComing April 26: Why Dogs Make the Best Teammates
Dogs make great teammates. It's in their constitutions. We can learn a lot from dogs about being good teammates. Available here and by RSS on April 26.
A business meetingAnd on May 3: Start the Meeting with a Check-In
Check-ins give meeting attendees a chance to express satisfaction or surface concerns about how things are going. They're a valuable aid to groups that want to stay on course, or get back on course when needed. Available here and by RSS on May 3.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenpPZOyqBeOiNwUZicner@ChacxdnatfthLYgCqjrtoCanyon.com or (617) 491-6289, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

Reprinting this article

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500 words in your inbox in one hour. License any article from this Web site. More info

Public seminars

Changing How We Change: The Essence of Agility
MasteChanging How We Change: The Essence of Agilityry of the ability to adapt to unpredictable and changing circumstances is one way of understanding the success of Agile methodologies for product development. Applying the principles of Change Mastery, we can provide the analogous benefits in a larger arena. By exploring strategies and tactics for enhancing both the resilience and adaptability of projects and portfolios, we show why agile methodologies are so powerful, and how to extend them beyond product development to efforts of all kinds. Read more about this program. Here's an upcoming date for this program:

Creating High Performance Virtual Teams
Many Creating High Performance Virtual Teamspeople experience virtual teams as awkward, slow, and sometimes frustrating. Even when most team members hail from the same nation or culture, and even when they all speak the same language, geographic dispersion or the presence of employees from multiple enterprises is often enough to exclude all possibility of high performance. The problem is that we lead, manage, and support virtual teams in ways that are too much like the way we lead, manage, and support co-located teams. In this program, Rick Brenner shows you how to change your approach to leading, managing, and supporting virtual teams to achieve high performance using Simons' Four Spans model of high performance. Read more about this program. Here's an upcoming date for this program:

The Race to the South Pole: Ten Lessons for Project Managers
On 14The Race to the Pole: Ten Lessons for Project Managers December 1911, four men led by Roald Amundsen reached the South Pole. Thirty-five days later, Robert F. Scott and four others followed. Amundsen had won the race to the pole. Amundsen's party returned to base on 26 January 1912. Scott's party perished. As historical drama, why this happened is interesting enough, but to organizational leaders, business analysts, project sponsors, and project managers, the story is fascinating. Lessons abound. Read more about this program. Here's an upcoming date for this program:

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at Twitter, or share a tweet Follow me at Google+ or share a post Subscribe to RSS feeds Subscribe to RSS feeds
The message of Point Lookout is unique. Help get the message out. Please donate to help keep Point Lookout available for free to everyone.
21st Century Business TravelAre your business trips long chains of stressful misadventures? Have you ever wondered if there's a better way to get from here to there relaxed and refreshed? First class travel is one alternative, but you can do almost as well (without the high costs) if you know the tricks of the masters of 21st-century e-enabled business travel…
Go For It: Sometimes It's Easier If You RunBad boss, long commute, troubling ethical questions, hateful colleague? Learn what we can do when we love the work but not the job.
303 Tips for Virtual and Global TeamsLearn how to make your virtual global team sing.
101 Tips for Managing ChangeAre you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt?
101 Tips for Effective MeetingsLearn how to make meetings more productive — and more rare.
Exchange your "personal trade secrets" — the tips, tricks and techniques that make you an ace — with other aces, anonymously. Visit the Library of Personal Trade Secrets.