Managing Dunning-Kruger Risk

Some people who have organizational power use it wisely. Some who have organizational power do not. This post is about the latter. Specifically, this post explores one way people with organizational power can go wrong, due to the Dunning-Kruger Effect. I begin by describing the Dunning-Kruger Effect. Next I'll describe how the effect generates risks for organizational missions. I then offer three recommendations for managing that risk.

The Dunning-Kruger Effect

A cognitive bias is the tendency to make systematic errors of judgment based on thought-related factors rather than evidence. For example, a bias known as self-serving bias causes us to tend to attribute our successes to our own capabilities, and our failures to situational disorder.

In 1999, Justin Kruger and David Dunning demonstrated the effects of a cognitive bias that has become known as the Dunning-Kruger Effect. They found that when we assess our own competence or abilities in a particular field, either in an absolute sense, or relative to others, we tend to commit systematic errors. [Kruger 1999] Four of their principal findings are:

• The less competent tend to overestimate their own competence
• The less competent don't recognize the superior competence of the more competent
• The more competent tend to underestimate their own relative competence
• The more competent tend to estimate accurately the incompetence of the less competent

There is some controversy about how Dunning and Kruger interpreted their experimental data. The behaviors they described do occur, but alternative explanations have drawn adherents. Still, at least for the purposes of navigating situations at work, Dunning and Kruger have provided a useful tool.

Consequences for people with power

Because of the Dunning-Kruger Effect, people with high levels of organizational power are at risk of demanding that the organization achieve goals that are not in fact achievable.

Everyone is subject to the Dunning-Kruger Effect. With respect to knowledge domains outside our areas of expertise, any of us can mistakenly regard as achievable an objective that isn't achievable. Or we can regard as achievable an objective that can be achieved only at such high cost as to be truly impractical.

Because An organizational leader who steps beyond his or
her domain of expertise to devise and advocate
an organizational mission is at risk of sending the
organization on a fool's errandof the Dunning-Kruger Effect, when people in organizations receive commands from those with power, there is always the possibility that those with power have assessed themselves and their organizations as more capable than they actually are. The Dunning-Kruger Effect holds that anyone, including decision-makers with organizational power, is at risk of making these errors of judgment. In organizations, decision-makers are at risk of requiring others to carry out impossible missions, if those decision-makers lack some of the expertise required to assess those missions accurately.

Decision-makers would be wise to consult experts in all domains relevant to a given mission before charging the organization with achieving that mission. The Dunning-Kruger Effect implies that relying on organizational leaders alone for these decisions is risky.

Three recommendations

To mitigate these risks, decision-makers can rely on domain experts who can assess the organization and its leaders with respect to three criteria:

1. The mission is within the reach of the organization

Missions require financial resources. They also require people with skills, knowledge, and experience that completely cover the mission's needs. A mission is within the reach of the organization if the necessary resources and people are available or can be acquired within the necessary time frames.

2. The decision-maker is competent to make future mission-relevant decisions

During mission execution, the decision-maker must be available and competent to address any issues the mission requires. If issues beyond the competence range of the decision-maker should arise, the decision-maker has access to others who can identify those issues and provide or obtain the needed expertise. Taking into account the Dunning-Kruger Effect, the experts recognize that the decision-maker is not a reliable source for assessing compliance with this criterion.

3. A process is in place to maintain compliance with Criterion 1 and Criterion 2

Ensuring ongoing compliance with Criteria 1 and 2 requires access to consultant capacity equivalent to what was available at the approval stage of the decision to undertake the mission. A correction process takes effect if the consultant finds misalignment between the organization and any of these three criteria.

Last words

Managing the risk of the Dunning-Kruger Effect requires people with organizational power — decision-makers — to acknowledge limits to that power. That acknowledging will be a difficult challenge for many. But the choice is clear: either acknowledge the limits of organizational power or accept the risks of the Dunning-Kruger Effect.  Top    Next Issue

Are your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!

Footnotes

Your comments are welcome

Would you like to see your comments posted here? rbrenyrWpTxHuyCrjZbUpner@ChacnoFNuSyWlVzCaGfooCanyon.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.

This article in its entirety was written by a human being. No machine intelligence was involved in any way.

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:

Effects of Shared Information Bias: I

Shared information bias is the tendency for group discussions to emphasize what everyone already knows. It's widely believed to lead to bad decisions. But it can do much more damage than that.

Effects 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.

Neglect of Probability

Neglect of Probability is a cognitive bias that leads to poor decisions. The risk of poor decisions is elevated when we must select an option from a set in which some have outstandingly preferable possible outcomes with low probabilities of occurring.

Seven Planning Pitfalls: II

Plans are well known for working out differently from what we intended. Sometimes, the unintended outcome is due to external factors over which the planning team has little control. Two examples are priming effects and widely held but inapplicable beliefs.

Additive bias…or Not: II

Additive bias is a cognitive bias that many believe contributes to bloat of commercial products. When we change products to make them more capable, additive bias might not play a role, because economic considerations sometimes favor additive approaches.

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

Forthcoming issues of Point Lookout

Coming September 4: Beating the Layoffs: I

If you work in an organization likely to conduct layoffs soon, keep in mind that exiting voluntarily before the layoffs can carry significant advantages. Here are some that relate to self-esteem, financial anxiety, and future employment. Available here and by RSS on September 4.

And on September 11: Beating the Layoffs: II

If you work in an organization likely to conduct layoffs soon, keep in mind that exiting voluntarily can carry advantages. Here are some advantages that relate to collegial relationships, future interviews, health, and severance packages. Available here and by RSS on September 11.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenyrWpTxHuyCrjZbUpner@ChacnoFNuSyWlVzCaGfooCanyon.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, )
• Get 2003-4 in Why Dogs Wag (PDF, )
• Get 2005-6 in Loopy Things We Do (PDF, )
• Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, )
• Get 2009-10 in The Questions Not Asked (PDF, )
• Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, )

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