Confident people tend to excel—in business, athletics, politics, and other domains. Yet overconfidence can lead to risks that undermine leaders and their companies’ reputations. So, how much confidence is too much confidence?
“Prior research has suggested that there can be some interpersonal benefits of expressing confidence. But it has not explored the dilemmas and potential for hypocrisy created by following that guidance,” says Berkeley Haas Prof. Don Moore, author of Perfectly Confident: How to Calibrate Your Decisions Wisely.
In a new article for California Management Review titled “Perfectly Confident Leadership,” Moore calls into question the idea that overconfidence improves performance, and offers strategies on how to become a wise leader who is both confident and honest.
Confidence does not indicate skill
Often, people associate confidence with skill. But research has not shown a direct connection between the two, says Moore, who has studied confidence and overconfidence for twenty years. He mentions a study demonstrating that people with high confidence and low confidence performed the same level. Yet despite the outcomes, people expected the highly confident people to perform better than the less confident people. This shows that confidence does not necessarily indicate skill, but rather it leaves an impression to others that it does.
While being confident can make you appear highly qualified and help increase others’ faith in you as a leader, being too confident can be your downfall. “Overconfident leaders put themselves, their teams, and their organizations at risk,” says Moore, the Lorraine Tyson Mitchell Chair in Leadership.
Many leaders may feel pressure to stay positive, especially in a pandemic, and resort to lying about successes to both themselves and others. One leader in particular, Elizabeth Holmes, made confident claims about her company Theranos, stating that its product could conduct hundreds of blood tests with one drop of blood—ultimately an impossible task to complete. Many criticized her as she was unable to meet those claims, making it difficult for Theranos to come clean about. Holmes’ experience is one of the many examples that reflect the consequences of confidence without substance.
Emotion vs facts
On the other hand, Moore finds that arguments displaying the most confidence often win a debate. If the goal is to persuade others, anecdotal and emotional statements appeal to an audience, gaining more support than objective, statistical, and factual claims. Still, winning a debate is not the same as solving problems. Falling for leaders who demonstrate a persuasive character without substance can be detrimental for the future.
If confidence can mask the incompetence and deceptions of leaders, how can we know who to support and who to believe in? Moore highlights that persuasive talks are often expressed through ambiguous optimism and assertive behavior. It’s important to clarify and test others’ claims, ultimately choosing the person who is most capable and truthful.
As Moore says, “well-calibrated confidence, consistent with the facts, is most useful for calibrating expectations and informing decisions.”
Moore’s article was published in the Spring 2021 issue of California Management Review, a journal that publishes academic work that engages scholars and contribute to the practice of management. To learn more, please visit cmr.berkeley.edu.