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-makingevaluate 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. Top Next Issue
Is 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
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
For more about the Dunning-Kruger Effect, see "The Paradox of Confidence," Point Lookout for January 7, 2009; "How to Reject Expert Opinion: 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: II," Point Lookout for November 4, 2015; "Wishful Significance: II," Point Lookout for December 23, 2015; "Cognitive Biases and Influence: I," Point Lookout for July 6, 2016; and "The Paradox of Carefully Chosen Words," Point Lookout for November 16, 2016.
Your comments are welcomeWould you like to see your comments posted here? rbrenzZZtoKoMMcMSQXonner@ChacJbZxtWzSRpQDpskLoCanyon.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.
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.
More articles on Personal, Team, and Organizational Effectiveness:
- Dangerous Phrases
- I recently upgraded my email program to a new version that "monitors messages for offensive text."
It hasn't worked out well. But the whole affair got me to think about everyday phrases that do tend
to set people off. Here's a little catalog.
- Renewal is a time to step out of your usual routine and re-energize. We find renewal in weekends, vacations,
days off, even in a special evening or hour in the midst of our usual pattern. Renewal provides perspective.
It's a climb to the mountaintop to see if we're heading in the right direction.
- Illusory Incentives
- Although the theory of incentives at work is changing rapidly, its goal generally remains helping employers
obtain more output at lower cost. Here are some neglected effects that tend to limit the chances of
achieving that goal.
- Business Fads and Their Value
- Fads in business come and go, like fads anywhere. In business, though, their effects can be so expensive
that they threaten the enterprise. Still, the ideas and methods that become fads can have intrinsic
value. Where does that value come from? Where does it go?
- Embolalia and Stuff Like That: I
- When we address others, we sometimes use filler — so-called automatic speech or embolalia —
without thinking. Examples are "uh," "um," and "er," but there are more
complex forms, too. Embolalia are usually harmless, if mildly annoying to some. But sometimes they can
Forthcoming issues of Point Lookout
- Coming July 25: Exploiting Functional Fixedness: II
- A cognitive bias called functional fixedness causes difficulty in recognizing new uses for familiar things. It also makes for difficulty in recognizing devious uses of everyday behaviors. Here's Part II of a catalog of deviousness based on functional fixedness. Available here and by RSS on July 25.
- And on August 1: Strategies of Verbal Abusers
- Verbal abuse at work has special properties, because it takes place in an environment in which verbal abuse is supposedly proscribed. Yet verbal abuse does happen at work. Here are three strategies abusers rely on to avoid disciplinary action. Available here and by RSS on August 1.
I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenCzmpdtkUEtdGMhqoner@ChacOFsgzJZvRlCuPZFyoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.
Get the ebook!
Past issues of Point Lookout are available in six ebooks:
- Get 2001-2 in Geese Don't Land on Twigs (PDF, USD 11.95)
- Get 2003-4 in Why Dogs Wag (PDF, USD 11.95)
- Get 2005-6 in Loopy Things We Do (PDF, USD 11.95)
- Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, USD 11.95)
- Get 2009-10 in The Questions Not Asked (PDF, USD 11.95)
- Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, USD 28.99)
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
- The Power Affect: How We Express Our Personal Power
- Many people who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.