Confidence goes a long way in leadership. No one will follow a wishy-washy leader. To solidify your authority, you need to make decisions--often without all the information you'd like--and stick to them. But when the stakes are high, smart leaders will embrace the uncertainty.

Don Moore, the Lorraine Tyson Mitchell chair in leadership at the University of California, Berkeley's Haas School of Business, writes in Harvard Business Review about New York City mayor Bill de Blasio's expressed certainty, before a January storm, that the "biggest snowstorm in the history of this city" would bury Gothamites under a mass of snow.

Although predictions ranged from 30 inches of white death to eight inches of good sledding powder, de Blasio focused on the worst possible scenario and ignored the range of possibilities. The hours leading up to what ended up being just a regular winter snowfall were marked by anxious preparation. Kids were sent home from school, professionals left work early, the subway system closed, and travel was banned on city streets.

When the storm rolled out, there was only eight to 12 inches of snow on the ground; no one lost power and the world didn't end. "By choosing to focus on the worst possible outcome, New York's leaders sought to encourage people to take precautions," Moore writes. "In this, they succeeded. But they also undermined the credibility of warnings of future disasters. When another storm comes, New Yorkers are likely to be more skeptical of the mayor's warnings."

Moore says the leader's dilemma in this type of situation is this: "Is it better to err on the side of caution or action? False negatives fail to warn of impending storms, attacks, or disasters. False positives cry 'wolf' by exaggerating future risks." 

Neither choice sounds too effective. But Moore says a smart leader will look for middle ground and lead with uncertainty.

"Leaders shouldn't just focus on the best, worst, or even the most likely possibility; instead they should provide a range of possible outcomes," he writes. "Companies are already used to doing this in one setting: corporate earnings. When public companies issue earnings guidance, they provide a range within which profits are likely to fall. Leaders should use this technique more often and in more areas to avoid the trap of false certainty."

Moore writes that during his research with colleagues at Carnegie Mellon and UC Berkeley, he found subjects who expressed confidence while interacting with a group gained credibility, which helped them gain status and influence. In the course of gaining that status, however, leaders can end up becoming overconfident.

Ultimately, that can result in negative outcomes. According to a study from the University of Missouri, Columbia, overconfident CEOs are more likely to make risky decisions at the expense of their employees and shareholders. Leaders who can deal with uncertainty and communicate it effectively avoid bad judgment due to overconfidence.

The crux of Moore's findings is to be honest. The vicious cycle of displaying confidence to gain more status hurts the company in the long run.

"Rather than fooling themselves, or us, we should want our leaders to represent the truth, even when it makes their jobs harder," he says. "That is, after all, one of the great missions to which we entrust them: to take the complex information and broad vantage point to which they have access and convey it to the rest of us in a useful way. Doing so represents authentic and courageous leadership, even if it means being less certain."

Published on: Feb 11, 2015