The expression of confidence is intimately tied up with leadership. Would-be leaders are careful to present a confident face because it helps gain them credibility and convince others that they know what they are doing.
New York City Mayor Bill de Blasio got in trouble recently when he predicted that a blizzard “could be the biggest snowstorm in the history of this city.” He was doing what leaders routinely do: acting as if they know what will happen when, in reality, there is substantial uncertainty. Some meteorological models predicted 30 inches of snow; others, more like what actually happened— a minor snow pile-up. De Blasio chose not to represent that uncertainty in his advice to city residents. When another storm comes, New Yorkers are likely to be more skeptical of the mayor’s warnings.
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.
Fortunately, there is a path between these twin risks. That middle way empowers leaders to express well-calibrated uncertainty when they devise policy or recommend actions to the public or shareholders. In other words, leaders should provide a range of possible outcomes. When public companies issue earnings guidance, they provide a range within which profits are likely to fall. Leaders should use this technique in more areas to avoid the trap of false certainty.
But leaders may be especially resistant to communicating uncertainty. In my research with colleagues at Carnegie Mellon and UC Berkeley, we found that those who express confidence gain credibility that helps them attain positions of status and influence. By the time leaders reach the top job, they’ve often learned to err on the side of certainty. Though it may be hard to embrace uncertainty, there is a clear business benefit in doing so. Research has shown that overconfident CEOs make overly risky decisions, often at the expense of their shareholders. Leaders who can come to terms with uncertainty and communicate it to employees may avoid such bad decisions.
We want our leaders to represent the truth, even when it makes their jobs harder. That is, after all, one of the great missions entrusted to them: to take complex information and convey it to us in a useful way. Doing so represents authentic and courageous leadership.
Don A. Moore teaches at the Haas School of Business at the University of California at Berkeley.