Lately I have been thinking a lot about things that get in the way of effective leadership decision making. Two common diversions off the rocky road of decision making are overconfidence and pride. Let’s talk about them.
Overconfidence bias in decision making is big-time real. Research has found that, when people believe they are 65 to 75 percent confident they are correct about something, they were actually right only about half the time. And when people believe they are 100 percent certain about something, they actually tended to be 75 to 85 percent correct.
Based on my observations over the years, this overconfidence often occurs when managers venture outside of their area of expertise or when they simply don’t know what they’re dealing with. Successful leaders are willing to admit (at least to themselves) when they don’t know everything. The good news: Managers are less likely to show overconfidence as they become more knowledgeable about a topic or an issue.
The cousin of overconfidence is pride. Have you witnessed managers wasting time and resources to lost causes because they don’t want to admit that they made a mistake in going with that decision in the first place? I can think of a few peppery words to describe this phenomenon, but there is actually a technical term for this in the field of organizational behavior. Escalation of commitment is staying committed to a decision even when there is clear evidence that the decision is wrong.
Research shows that managers will often stay with their failing course of action when they perceive themselves as responsible for the failure or problem. Because consistency is seen as such a strong characteristic of effective leadership, some managers don’t want to change direction once they’ve mapped out their route to Successville. Yet, effective leaders have the ability to differentiate between situations where persistence will pay off and situations where sticking with the original plan will lead down a dead-end road.
Have you seen managers exhibit overconfidence or escalate commitment in decision making? What was the result?