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

Overconfidence at Work

by

Last updated: July 2, 2019

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: I  Next Issue

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

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: 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 welcome

Would you like to see your comments posted here? rbrenmhXARWRMUvVyOdHlner@ChacxgDmtwOKrxnripPCoCanyon.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:

A checklistKeep a Not-To-Do List
Unless you execute all your action items immediately, they probably end up on your To-Do list. Since they're a source of stress, you'll feel better if you can find a way to avoid acquiring them. Having a Not-To-Do list reminds you that some things are really not your problem.
The impeachment managers for the impeachment of U.S. President Andrew JohnsonProblem-Solving Preferences
When people solve problems together, differences in preferred approaches can surface. Some prefer to emphasize the goal or objective, while others focus on the obstacles. This difference is at once an asset and annoyance.
Lake Chaubunagungamaug signDeciding to Change: Trusting
When organizations change by choice, people who are included in the decision process understand the issues. Whether they agree with the decision or not, they participate in the decision in some way. But not everyone is included in the process. What about those who are excluded?
A typical standup meetingMeeting Troubles: Culture
Sometimes meetings are less effective than they might be because of cultural factors that are outside our awareness. Here are some examples.
The Politics by Subject Matter matrixIssues-Only Team Meetings
Time spent in regular meetings is productive to the extent that it moves the team closer to its objectives. Because uncovering and clarifying issues is more productive than distributing information or listening to status reports, issues-only team meetings focus energy where it will help most.

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

Forthcoming issues of Point Lookout

An unfinished building, known as SzkieletorComing September 18: The Planning Fallacy and Self-Interest
A well-known cognitive bias, the planning fallacy, accounts for many unrealistic estimates of project cost and schedule. Overruns are common. But another cognitive bias, and organizational politics, combine with the planning fallacy to make a bad situation even worse. Available here and by RSS on September 18.
The Leonard P. Zakim Bunker Hill BridgeAnd on September 25: Planning Disappointments
When we plan projects, we make estimates of total costs and expected delivery dates. Often these estimates are so wrong — in the wrong direction — that we might as well be planning disappointments. Why is this? Available here and by RSS on September 25.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenmhXARWRMUvVyOdHlner@ChacxgDmtwOKrxnripPCoCanyon.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:

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

The Race to the South Pole: Lessons in Leadership

On 14The Race to the South Pole: Lessons in Leadership 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. We'll use the history of this event to explore lessons in leadership and its application to organizational efforts. A fascinating and refreshing look at leadership from the vantage point of history. Read more about this program.

Here's a date for this program:

The Power Affect: How We Express Our Personal Power

Many The
Power Affect: How We Express Personal Powerpeople 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.

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at Twitter, or share a tweet 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.
Technical Debt for Policymakers BlogMy blog, Technical Debt for Policymakers, offers resources, insights, and conversations of interest to policymakers who are concerned with managing technical debt within their organizations. Get the millstone of technical debt off the neck of your organization!
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.
If your teams don't yet consistently achieve state-of-the-art teamwork, check out this catalog. Help is just a few clicks/taps away!
Ebooks, booklets and tip books on project management, conflict, writing email, effective meetings and more.