Overconfident Leadership Is Poised to Inflict Maximum Damage

While a healthy measure of self-confidence is clearly a component of effective leadership, this is an area when there definitely can be too much of a good thing.

Can you imagine voting for a president who appeared to lack confidence? If you’re like most people, probably not. Whether the manager of a restaurant or president of a major corporation, confidence is clearly something we look for in our leaders. Research confirms this: We tend to listen to and believe people who sound like they know what they’re talking about.

But while confidence is clearly a critical factor in convincing other people you’re ready to lead them, the role of confidence is a little less commonly understood in terms of how it affects the performance of a leader. While a healthy measure of self-confidence is clearly a component of effective leadership, this is an area when there definitely can be too much of a good thing.

Confidence Isn’t Ability, and therein Lies the Problem

At some point, confidence gives way to hubris. It’s worth noting that our own research indicates this is more common among men than women, and may partially explain the lack of female representation in leadership. It’s not always totally clear at the time when this line is crossed, but the results often speak for themselves—history is riddled with examples of people with sky-high confidence making the most disastrous decisions or failing to sense their weaknesses or shortcomings. In fact, the more confident they are, the more disastrous the impact of their mistakes. For example, Blockbuster passed up a chance to purchase Netflix, and Disney passed on both Harry Potter and Lord of the Rings(eventually learning their lesson and purchasing the Star Wars franchise).

How does this happen? For starters, confidence is not indicative of ability, nor of judgment. It’s easy to be blinded by our own biases, particularly when we’re surrounded by others with similar outlooks, and we’ve all sipped the same “Kool-Aid.” In fact, overestimating our own abilities may be common to human nature. The overconfidence effect is a well-established bias in which a person’s confidence in their own judgments consistently exceeds the actual accuracy of their decisions.

As a case in point, by definition, most of us are “average” drivers; however, a study found that 93 percent of U.S. drivers said they were above average. It’s not hard to swallow the idea that apparently almost half of us overestimate our driving skills (particularly if you live in California)—but it’s a little tougher to swallow the idea that we might be one of the ones overestimating our own ability.

The Less We Know, the More We Think We Know

How is it that overconfident leadership leads to such terrible decisions? Consider the Dunning-Kruger effect, which found that people who are unskilled in a certain area not only tend to reach erroneous conclusions and make poor choices, but, due to their incompetence, also lack the ability to recognize how off-base their decisions are. When applied to leadership, this means that executives are prone to making the most erroneous decisions in areas where they have the least expertise. Thus, while a project where leaders have considerable acumen might be subject to the most stringent examination, you may see overconfident leaders pushing unrealistically ambitious projects in unfamiliar territory.

Why Doesn’t Someone Speak Up?

If it’s not difficult to imagine overconfident leaders pushing past the boundaries of their own skills and knowledge into foolhardy territory, it may be a little more difficult to understand why their organizations let them get them away with it. “Why didn’t anyone speak up?” you might ask. Unfortunately, overconfidence often is coupled with “groupthink,” where opposing facts, data, and opinions are summarily dismissed—particularly in instances where the leader is charismatic and exudes self-confidence. In most instances, the warning bells were sounded, and ignored. Furthermore, the same hubris that causes overconfident leaders to be sure they’re right also tends to cause them to ignore the warnings that indicate their plans are going wrong.

Research on hubristic and narcissistic leadership shows that the mere presence of such leaders actually stifles discussion and exchange of information in their team and even across the organization. As a result, the possibility of failure and alternate courses of action are not discussed, so when things do go wrong, no one knows how to react.

Balancing Overconfidence with Self-Awareness

Overconfidence, however, does not have to doom leaders or their organizations to gross, high-impact mistakes. Leaders and leadership teams can be trained to correct for tendencies toward overconfidence and groupthink. Assessments, coaching, and other techniques in this area are most effective when they center on the objective of building self-awareness among individuals and teams. As they become more conscious of their own preferences, styles, and biases, they are empowered to put the brakes on rash decision-making.

Highly charismatic leaders, for instance, can be made aware of the stifling effect they may have on the free exchange of ideas, and learn methods to restart the important discussions and debates that must precede important decisions. Military studies, for instance, have demonstrated the effectiveness of such self-aware leadership. At the same time, their teams can become more aware of how their inner dynamics may be preventing dissenting voices from being heard. For instance, if they have similar personality preferences, they may share the same blind spots and tend to collectively overlook things that might be obvious to an outsider.

In fact, self-awareness is in short supply across the board in our society, and some studies estimate that as few as 10 to 15 percent of us are truly self-aware. So perhaps it shouldn’t be too surprising that hubristic leaders are also lacking in that area. While overconfidence may bring short-term rewards, it also brings long-term dangers. In contrast, while self-aware leadership may not be as exciting in the moment, it leads to more sound—and more profitable—decision-making.

John Hackston, head of thought leadership at The Myers-Briggs Company, is a chartered psychologist with more than 30 years’ experience in helping clients to use psychometric tests and questionnaires in a wide range of contexts, including selection, leadership development, performance management, and teambuilding.