Fake it 'til you make it. Walk the walk. Confidence is key. There are dozens of clichés that tell us about the importance of a self-assured leader, and dozens more real-life examples to confirm it. But what happens when confidence--or, rather, overconfidence--gets in the way?
The world of social psychology has been studying up recently on the many ways business leaders can self-sabotage by being too sure. Here are three common ways your confidence might trip you up, and how to avoid each pitfall.
1. It discourages critical input from your employees
In a 2015 study, researchers from the University of California and the London School of Economics and Political Science found that people who displayed nonverbal confidence--using powerful posture or strong eye contact, for example--tended to dominate team decision-making, even when their ideas were woefully incorrect. The study concluded that in the presence of a confident team member, more knowledgeable individuals would cede the floor, contributing fewer of their own ideas even when they knew the confident member was off-base.
The researchers called the finding an "unfortunate irony," but it's one business leaders can learn from: a confident demeanor is important in creating buy-in from employees and team members, but it can just as easily stifle others' participation.
Luckily, the study also offers up a solution. By also showing nonverbal openness (such as maintaining open posture, or smiling), confident leaders were able to inspire participation while also maintaining their authority.
2. It keeps you from learning what you don't know
Successful entrepreneurs regularly speak about the importance of engaging in continued learning, but a recent study from Washington State University's Social Cognition Lab suggests that to do so you might need to reevaluate the way you think about your own intelligence.
The research team found that, by and large, the most overconfident people were those with a "fixed" theory of intelligence. In other words, if you believe people are inherently intelligent or unintelligent, you're more likely to overestimate your own abilities. What's worse, though, is that the researchers found this overconfidence led individuals to avoid difficult tasks, since failure would challenge their self-worth.
By contrast, subjects who viewed intelligence as "incremental"--something to be built through experience and effort--were able to devote more attention to difficult tasks and, in doing so, performed better (and learned more) on experimental exams. In addition to their "incremental" mindset, those subjects had another thing in common: Their self-assessments of intelligence tended to be, ironically, much lower than those of the "fixed" mindset subjects.
3. It may make you resistant to feedback and vulnerable to blind spots
It's impossible to avoid making mistakes, but as a study published in the Strategic Management Journal shows, overconfidence can make a small problem bigger or, worse, blind you to a problem until it's too late to fix.
Measuring the confidence levels of corporate CEOs based on qualitative and quantitative data (such as voluntary corporate earnings forecasts, compared to actual earnings), researchers found that overly confident CEOs regularly under-corrected for corporate mistakes.
If confidence led the CEOs into their positions, unmitigated overconfidence might lead to their ouster. More wary leaders tended to weather storms better. CEOs who kept their eyes on external data and listened to feedback were able to adjust their earnings forecasts and avoid errors that others couldn't.