If success breeds confidence, does too much success breed overconfidence?
And how can you tell the difference between someone who is overconfident and someone whose high level of confidence corresponds to concrete achievement?
We know that many young people suffer from a surfeit of confidence based on nothing more than the level of their parents' and teachers' affection. Thus, the sense that their confidence is built of arrogance and impudence.
If that is true, then people who become CEOs should be more grounded, more in touch with reality, and less prone to irrational overconfidence.
As behavioral economist Richard Thaler writes, that is often not the case, especially when you factor in luck. In Thaler's words: "in fact, the competition may tend to select overconfident people. One route to the corner office is to combine overconfidence with luck, which can be hard to distinguish from skill. C.E.O.'s who make it to the top this way will often stumble when their luck runs out." Link here.
Success is not always your best friend. If it is not accompanied with a healthy portion of humility, the chances are good that it will induce people to commit avoidable errors.
Among those errors are a tendency to be overly optimistic about the future. Chief Financial Officers have a bad record at predicting the future of the economy or the markets, because they are too confident in their ability to predict the future.
CEO's who suffer from overconfidence tend to make bad acquisitions. A narcissistic CEO is more likely to overpay for a company he wants to acquire, is more likely to act on impulse, and is more likely to overestimate his ability to manage the new company and to integrate its operations with the old company. Link here.
People who do not believe that they have earned their success will be more invested in the their great executive persona. As you know, a persona is a mask. Put one one and you become a character in a story. If you have profited from the persona, by persuading enough people to take it as who you really are, you will be that much more loath to give it up.
And the more you cultivate a persona, the less you will be making decisions based on fact and objective reality. Showing off the appearance of prowess will be more important than the results of the performance.
As we know, narcissists can do no wrong in their own eyes. Thus, they become masters of deflecting blame.
The same applies across different areas of human achievement. Some people achieve great success in one area of life and conclude that they will be just as good in other areas of life. The CEO who thinks he is the world's leading authority on public policy or childrearing comes immediately to mind.
But how we can identify those among us who suffer from narcissistic overconfidence?
Researchers have come up with a very simple and easy test. They observe a person in a conversation and count up the number of times he uses first person singular pronouns-- I, me, my, mine-- and then they compare that figure to the number of times he uses first person plural pronouns-- we, us, our, ours.
The more I's, the more he's narcissistic. The more narcissistic, the more likely he is to be overconfident.
Obviously, you can try this at home; you can even try it in your more intimate relationships. The more I's a boyfriend or girlfriend uses, the poorer his or her judgment about the future of your relationship. Someone who is overconfident will ignore the fact that the relationship is not working. He will be convinced that he can make it work. He will overinvest emotionally, will fall in love impulsively, and will want to close the deal as soon as possible.
Here is another way you can use this information. If you are interviewing for a job, try to control your use of first person singular pronouns. When you talk about your old job, use first person plural pronouns. It will tell your interviewer that you worked well as part of a team and that you are not going to allow your narcissism to cloud your judgment.
The more you indulge your mythic narcissistic persona the less you will you be willing to admit mistakes. The overconfident executive, like the overconfident lover or the overconfident student, will resist admitting error. He may blame others when things do not work out well or he may insist that more time is needed for his vision to be fulfilled.
Finally, a question: let's say that you are dealing with someone who is overly confident, to the point of being narcissistic. Would it be a good thing to encourage that person to use fewer I's in his conversation, and try substituting more We's?
And if the person is underconfident, would it be good to encourage him to use more I's, and fewer We's.