Have you been a the position in which someone  purported to be knowledgeable, or even an expert in an area gave you instructions that were impossible to follow once you got into the details… huge chunks of the process were missing or full of jargon with no real information. However, this person didn’t do it just once or twice, but so frequently you began to wonder if they plotted to destroy your reputation at work, or were just plain stupid. According to recent research on overconfidence there is a good chance that probably did not have as much knowledge in the field as you, but didn’t know it.

Two recent studies have shown the extent to which overconfident people deceive themselves into thinking that they know more than they do. Unfortunately, other people believe this, too, which only reinforces their delusions.

One study conducted within the tutorial system implemented at universities in Britain asked students to predict the grades of other students in the first week, when they were newly acquainted, and again six weeks later. Those students who overestimated their own grades, were predicted to get higher grades by their peers after the first week meeting. Those students who predicted lower grades than they actually earned, were ranked lower by their peers. Surprisingly after six weeks when the students had a chance to know each other better, the perceptions had not changed significantly. Other students thought that the overconfident students were still getting better grades than they actually were.

In addition, this study measured the susceptibility to being deceived. This was based on the difference between the actual grades of others, and the prediction of grades that each person made. The results showed that the overconfident students did not do as well in perceiving the actual ability of other students.  In other words, self-deceiving people are more easily deceived by others.[1]

A soon to be published study from Haas School of Business, University of California Berkeley, has found one of the benefits of being overconfident that causes people to keep promoting their non-existent abilities. Study co-author Cameron Anderson said:

“Our studies found that overconfidence helped people attain social status. People who believed they were better than others, even when they weren’t, were given a higher place in the social ladder.”[2]

One of the tests measuring over confidence asked MBA students to see how many famous people, places and events that they recognized. Fake names were included with real ones. Those rated higher by their peers than their actual performance warranted claimed to recognize more fake names.

Then, researchers observed the mannerisms of these overconfident individuals as the MBA students worked in groups. They were calm and relaxed, spoke clearly, spoke convincingly and spoke a lot. They offered more information than the others. But, this information wasn’t anything new to the people that they offered it to. The others did not catch on that these people did not actually know more. “In fact, overconfident individuals were more convincing in their displays of ability than individuals who were actually highly competent.” [3]

Now, translate these a business environment. There are several employees who have great confidence in their ability, much greater than their actual ability. However, if managers do not uncover this and judge ability based on confidence there is a great chance of less competent people being promoted. For the sake of argument, assume only ten percent of them get promoted. These self-deceived individuals will then overwhelmingly select those people who are also over confident and under competent, because they are also easily deceived. Incompetence simply multiplies.

And, we wonder why today’s business environment seems so unstable.

photo – By Camilo Gonzalez – Own work, GFDL, https://commons.wikimedia.org/w/index.php?curid=15153422

[1] Lamba S, Nityananda V (2014) Self-Deceived Individuals Are Better at Deceiving Others. PLoS ONE 9(8): e104562. doi:10.1371/journal.pone.0104562

[2] http://newsroom.haas.berkeley.edu/research-news/why-are-people-overconfident-so-often-it%E2%80%99s-all-about-social-status

[3] http://haas.berkeley.edu/faculty/papers/anderson/status%20enhancement%20account%20of%20overconfidence.pdf.