The cost of overconfidence

We want our leaders to be confident. If they aren't, who will listen to them? At the same time, an overconfident leader — one who is ignorant of one's own limitations — can be detrimental to an organization.

According to the Harvard Business Review, recent research suggests overconfident people hold certain implicit beliefs about the ability for character and ability to change. Some people see personality and intelligence as relatively "fixed," while others believe they are malleable and capable of changing over time with effort and experience.

These perceptions have a significant influence on how we see ourselves and others, according to the report. People with a fixed mindset are more prone to overconfidence, as they tend to be much more interested in proving or showing others they are smart, rather than seeking opportunities to learn and get smarter.

In one study cited by the Harvard Business Review, students were asked to predict how well they performed on a set of problems that varied in difficulty. Students who were deemed to have a fixed mindset demonstrated overconfidence, giving estimates of more than 25 percent higher than their actual scores. "Growth mindset" students, or those who believe their intelligence and personalities can develop over time, overestimated their performance by 5 percent.

Upon taking a closer look at how the students approached the test, researchers found the fixed mindset students spent more time working on the easier problems and less time on the more difficult ones. Ultimately, they selectively focused on problems that reinforced their overconfidence, reaffirming their inflated opinions of themselves and ignoring the rest as much as possible, according to the report.

This study is consistent with other research, which has found that people with fixed mindsets are more likely to avoid difficulty, withdraw effort when confronted with setbacks and react defensively when challenged. They are also more likely to judge quickly and think stereotypically, are more revengeful after conflict and more punishing toward those who act wrongly, according to the report.

Moreover, evidence from various longitudinal studies suggests fixed mindset people are wrong — our personalities and abilities can change over time with experience and effort.

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