Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 22, Issue 4;   February 2, 2022:

The Risk of Astonishing Success

by

When we experience success, we're more likely to develop overconfidence. And when the success is so extreme as to induce astonishment, we become even more vulnerable to overconfidence. It's a real risk of success that must be managed.
Children playing a computer game

Children playing a computer game. Both appear to be having a great time, having achieved astonishing success.

To be overconfident is to have a greater sense of confidence in one's talents, ability, or judgment than is justified. Overconfidence can be a general condition, or it can be relative to particular circumstances. In any case, the overconfidence effect is a well-known cognitive bias that causes us to make errors when assessing our own abilities. Some innovative experiments have indicated that a string of recent successes can increase the degree of overconfidence one exhibits. [Hilary 2011]

That finding suggests that overconfidence and the overconfidence effect present real risks to organizations, where it is common practice to allocate increasingly important responsibilities to people who have had recent successes. That's why it struck me as important to contemplate a subset of those risks — the risks of astonishing successes.

Those risks arise from interactions among several cognitive biases. Self-serving bias causes us to attribute success to our own abilities, and to attribute failures to external factors. Hindsight bias is our tendency to perceive past events as having been more predictable than they were. Confirmation bias causes us to seek out information that confirms our preconceptions, rejecting information that would tend to disconfirm those preconceptions.

And it's reasonable to suppose that rational decision-making is most at risk from these biases when emotions are strong and the situation is relatively chaotic. The central enabler of interaction among these cognitive biases is astonishment, which leads to the emotions and chaos to which rational thought can be so vulnerable.

In what follows I use the term actor to refer the person (or organization) that has experienced a string of astonishing successes. The story below sketches how self-serving bias, the overconfidence effect, hindsight bias, and confirmation bias can conspire to expose the actor to elevated risk of failure when the actor has experienced a string of astonishing successes. We begin with self-serving bias.

Self-serving bias

Self-serving bias distorts interpretations of success and failure. It causes us to tend to interpret successes as direct results of our talents and abilities. And it causes us to tend to interpret failures and troubles as results of external factors.

Self-serving bias thus establishes a framework in which the search for explanations of astonishing success success tends to focus on the actor. That focus reduces the likelihood that the actor will appreciate the importance of external factors in producing the success.

The overconfidence effect

The overconfidence Rational decision-making is most
at risk from cognitive biases when
emotions are strong and the
situation is relatively chaotic
effect causes us to commit errors of three kinds. First, we tend to overestimate the quality of our own performance. Second, we tend to rate our own performance as higher than it actually is relative to the performance of others. And finally, we tend to underestimate the uncertainty of our beliefs — that is, we have excessive confidence that we know the truth.

Experimental evidence for these effects is strong — the overconfidence effect has been observed in a wide range of circumstances. We don't need to place ourselves under special circumstances of stress or challenge or misinformation to induce overconfidence. Just as walking consumes calories, being human occasionally leads to overconfidence. And a string of successes increases the likelihood that we will exhibit overconfidence.

The overconfidence effect thus establishes tension between the feeling of superior capability and the astonishment arising from the success. In words, the question arises, "If I am as capable as I believe I am, why am I so surprised at my success?" The desire to resolve that tension causes us to search for an explanation. And that search makes us vulnerable to the next cognitive bias of the story: hindsight bias.

Hindsight bias

Hindsight bias, also known as the knew-it-all-along phenomenon, is the human tendency to perceive past events as having been more predictable than they actually were. [Roese 2012] In a real sense, hindsight bias is a form of overconfidence in one's ability to predict how a situation will evolve with time. Hindsight bias might arise from the superiority of our ability to recall the chain of events that occurred compared to our ability to recall the sometimes-complex and changing contexts in which that chain of events occurred.

When we experience a string of successes, we gain a sense of confidence. But occasionally the successes are so unusual that they create a sense of astonishment. That emotion can disrupt not only our view of the circumstances in which the success occurred, but also our view of ourselves. An unsettling question arises: How did this happen? Finding answers can be challenging when we recall so little about the effects of then-contemporary circumstances.

Self-serving bias causes us to tend to discount the effects of those circumstances, leading is to interpret the successes as direct results of our talents and abilities. Given that understanding of what happened, hindsight bias causes us to observe, "I knew I was good at this!" But then a problem arises.

The effects of astonishment

Surprise, the emotion we experience when something unexpected occurs, has a three-fold role in hindsight bias. [Müller 2007] First, we use surprise to estimate the degree of conflict between what we would have predicted and what actually occurred. Second, surprise triggers the processes we use to make sense of what did happen. Sense-making is a step necessary for adjusting our understanding of the world. Finally, surprise biases the sense-making process to help us pick out the factors that we missed or undervalued in the process of predicting what would have happened. When time and emotion and resources permit, these three roles collaborate to help us make predictions more accurately.

Astonishment is an extreme form of surprise. Astonishment is more likely than mere surprise to instill emotions like fear, wonder, or awe. An example of a surprise is the emotion you experience upon finding an extra bag of fries in your fast food order, or when you find that you won $25 in a lottery. An example of astonishment is the feeling you might experience upon discovering that your home has been burglarized, or that a distant relative, recently deceased, has bequeathed you the equivalent of a two years of annual earnings.

From astonishment to doubt

Astonishment at a success causes us to ask, "How did I not know I was this good?" Or, "If I didn't know I was this good, am I really good?" And that is a most discomfiting question. Doubt enters the scene.

The doubts raise questions about the validity of the superiority premise — the premise that the actor has superior talent, capability or judgment.

To resolve the doubts, a search of records and recollections begins. If the search is formal, it's called a retrospective, an after-action review, a lessons-learned session or something similar. But formal or not, the search is vulnerable to another cognitive bias — confirmation bias. Confirmation bias tends to focus the search on items that confirm the superiority premise. And the search will likely be successful, because, after all, the actor's effort was a success.

Elevated risk

Risk becomes elevated after astonishing success because the impression created by the search for explanations can produce a severely distorted assessment of the superiority of the talent, capability, or judgment of the actor. The search becomes a search for overlooked clues as to superior capability instead of a search for overlooked external reasons for success. The result can be a form of overconfidence as exaggerated as the success was astonishing. Go to top Top  Next issue: Defect Streams and Their Sources  Next Issue

Great Teams WorkshopOccasionally we have the experience of belonging to a great team. Thrilling as it is, the experience is rare. In part, it's rare because we usually strive only for adequacy, not for greatness. We do this because we don't fully appreciate the returns on greatness. Not only does it feel good to be part of great team — it pays off. Check out my Great Teams Workshop to lead your team onto the path toward greatness. More info

Footnotes

[Hilary 2011]
Gilles Hilary and Charles Hsu. "Endogenous overconfidence in managerial forecasts." Journal of Accounting and Economics 51:3, (2011), 300-313. Available here. Retrieved 17 January 2022. Back
[Roese 2012]
Neal J. Roese. "'I Knew It All Along…Didn't I?' — Understanding Hindsight Bias", Association for Psychological Science blog, September 6, 2012. Available here. Retrieved 18 January 2022. Back
[Müller 2007]
Patrick A. Müller and Dagmar Stahlberg. "The role of surprise in hindsight bias: A metacognitive model of reduced and reversed hindsight bias," Social Cognition 25:1, (2007), 165-184. Available here. Retrieved 18 January 2022. Back

Your comments are welcome

Would you like to see your comments posted here? rbrenEQuetChPjwYBDxmgner@ChacxXTxBssoFmfDfMugoCanyon.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 Cognitive Biases at Work:

Computer-generated image of the third stage ignition for Mars Climate OrbiterConfirmation Bias: Workplace Consequences Part II
We continue our exploration of confirmation bias. In this Part II, we explore its effects in management processes.
Deputy Secretary of Defense Wolfowitz, Defense Secretary Rumsfeld, and President Bush in a press conference on September 17, 2001Overconfidence at Work
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.
Thomas Paine, considered one of the Founding Fathers of the United StatesEffects of Shared Information Bias: II
Shared information bias is widely recognized as a cause of bad decisions. But over time, it can also erode a group's ability to assess reality accurately. That can lead to a widening gap between reality and the group's perceptions of reality.
An unfinished building, known as SzkieletorThe 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.
A so-called "Paris Gun" of World War ICognitive Biases at Work
Cognitive biases can lead us to misunderstand situations, overlook options, and make decisions we regret. The patterns of thinking that lead to cognitive biases provide speed and economy advantages, but we must manage the risks that come along with them.

See also Cognitive Biases at Work and Project Management for more related articles.

Forthcoming issues of Point Lookout

Bottom: Aerial view of the Forth Bridge, Edinburgh, Scotland. Top: Inside the Forth Rail Bridge, from a ScotRail 158 on August 22, 1999.Coming June 1: Mental Accounting and Technical Debt
In many organizations, technical debt has resisted efforts to control it. We've made important technical advances, but full control might require applying some results of the behavioral economics community, including a concept they call mental accounting. Available here and by RSS on June 1.
A goose and goslingsAnd on June 8: Flexible Queue Management
In meetings of 5-30 participants, managing the queue of contributors can be challenging. A strict first-in-first-out order can cause confusion and waste of time if important contributions are delayed. Some meetings need more flexible queue management. Available here and by RSS on June 8.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenEQuetChPjwYBDxmgner@ChacxXTxBssoFmfDfMugoCanyon.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 500-1000 words in your inbox in one hour. License any article from this Web site. More info

Public seminars

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.

Bullet Points: Mastery or Madness?

DecisBullet Point Madnession makers in modern organizations commonly demand briefings in the form of bullet points or a series of series of bullet points. But this form of presentation has limited value for complex decisions. We need something more. We actually need to think. Briefers who combine the bullet-point format with a variety of persuasion techniques can mislead decision makers, guiding them into making poor decisions. 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.