Anticipating Problems to Avoid Overconfidence Effect
The ink is barely dry on those giant checks, but there’s no doubt that the winners of last week’s $1.6 Billion Powerball jackpot are still smiling, trying to decide how many flat screen TV’s it takes to make a person happy. But what about the owners of the 635 million losing tickets?
Strangely enough, we don’t feel so bad. Even though the odds of winning the jackpot are slightly less than the chance you’ll be born with extra fingers and later die in a killer bee attack, we still experience a mood lift by walking around with a sliver of hope stuffed in our hip pocket.
This harmless bit of self-denial so beautifully captured in this hilarious clip from the movie “Dumb and Dumber”, is actually a product of one of the most hazardous cognitive biases plaguing our organizations. It’s called the Overconfidence Effect.
The Overconfidence Effect is responsible for our tendency to believe we’re better than average, to think we’re more accurate than we actually are, to overestimate the amount of control we have in a situation, and to greatly underestimate the amount of time it will take to complete long, complicated projects. Such fallacies in logic can lead to poor decision making, undisclosed risks, and inadequate planning.
If you would like to avoid these pitfalls in your next project, here are three steps to counteract the Overconfidence Effect and improve your chances of success.
1. Ask “What Could Go Wrong?”: When we set stretch goals, we tend to focus on the positive. However, as soon as our first problem occurs, people go into panic mode. To minimize the risk of this happening, take time at the beginning of the project to identify potential problems that will derail it.
2. Develop Preventive Actions: Once you have identified potential pitfalls, determine what actions you can take to prevent problems from occurring in the first place.
3. Develop Minimizing Actions: As Murphy’s Law states, “anything that can go wrong, will go wrong.” Determine in advance what you will do to respond to the problem, even if your attempts to prevent the problem fail.
At Action Management Associates, we have over 35 years of experience helping our clients confidently navigate tough projects. If you would like to explore strategies to improve your implementations, give us a call at 972-386-5611! We’d love to help.