Is confidence beneficial?
Contrary to what many think, overconfidence isn’t harmless.
History is full of tragic accidents that came about because people made snap decisions that vastly overestimated their own ability. Take the 2008 financial crisis, for example: everyone was overconfident that they knew the value of the subprime mortgages they were buying. The fallout when people realized they didn’t? A global economic crisis.
In fact, research shows that too much confidence can sometimes lead to inferior performances. Imagine two companies — one that anticipates great results in the next quarter and one that expects to be in the red. The second one will be more motivated to make changes for the better.
Confidence alone won’t let you finish a marathon if you’ve never run before. But confidence can give you the push to start training, one mile at a time.
People underconfident about difficult tasks often forget that others are struggling as well.
If something is particularly difficult for you but you can’t see others struggling, you might gain a false sense of your own incompetence. But you’ve failed to take into account the unseen time other students are spending mastering grammar and vocabulary.
Here, underconfidence comes from the fact that you are quite literally unable to see others’ imperfections. Just remember not to compare your hard work with others’ finished products.
Make forecasts that consider a range of possible outcomes to avoid overconfidence.
Expected value is a powerful tool for forecasting. It’s pretty simple: instead of choosing a single outcome, assign probabilities to a range of outcomes. For example, instead of thinking, this project should take 10 days, try to figure out how likely it is that you’ll be done in less than 6 days, 6 to 8 days, 8 to 10 days, 10 to 12 days, and so on. When you have a list of probabilities, you can then average out the outcomes and get a mathematical estimate of when you’ll actually be done.
This is an extremely useful way to improve your foresight because it forces you to consider all the possible outcomes for a project instead of making a single assumption that’s likely to be wrong. And there’s another benefit as well: you can save your forecasts and return to them after the fact to improve your thinking. If the project ended up taking 14 days, you can look back at your projections and understand why you were overconfident.
Consider others’ perspectives to help challenge your own biases.
Learning how and why others disagree can help us expand our own thinking and balance out the errors each person tends to make. Sometimes this can be as simple as averaging out both sides of an argument; if two people are arguing over how much something used to cost, chances are that the true answer is somewhere in between. Quick and easy, sure — but it brings results.
Good organizations bring together people with a range of perspectives to raise alternate ideas and produce better decisions. Think about Abraham Lincoln’s cabinet, which was deliberately filled with people who disagreed with each other. It takes courage to invite such dissent, but the end result is better decision-making.
Exaggerated confidence isn’t trustworthy; ability is what earns trust.
Of course, pure confidence can inspire trust. Imagine you’re explaining a concept to someone. The person listening to you is completely unfamiliar with the subject; all he has to go on is your word. In a scenario like this, confidence does make a difference. But that only goes so far. Anyone can fake self-confidence, and many do. We even have words for those who fake confidence without backing it up: con artists and scammers.
The middle path is to communicate honestly about what you don’t know, drawing upon your experience and ability to convey credible and well-calibrated information. One study looked at which analysts were most trustworthy when it came to predicting the outcome of games. Analysts who projected false certainty were viewed as trustworthy — but so were those who said they weren’t sure. The most credible were those who were able to give probabilities along the lines of “one team has a 65 percent chance of winning,” which displayed both their uncertainty and a level of deeper knowledge. It’s this kind of well-deserved confidence that truly resonates in the long run.
For confident leadership, set clear standards and be open to new information.
This is especially important in leadership contexts since a common source of conflict in a team setting is when people have different ideas of what’s needed. Set clear, measurable standards, and both leaders and team members will have a more accurate idea of where they stand. For example, a teacher who shows her students examples of well-written papers will get fewer complaints about grading, as both sides understand what level of work is expected.
But that doesn’t make for effective leadership. Good leaders build organizations where people can raise questions and concerns, even if they go against what leadership originally believed. It’s difficult to remain truly open to all information, but remember: the more information you have, the more perfect your confidence will be.
Confidence is a powerful tool — but it has to be deserved. When making decisions, don’t forget to consider a wide range of possibilities so you’re better informed and can more accurately calibrate your confidence moving forward. False bravado will be exposed quickly, while true self-confidence comes from knowing what you don’t know.