Generally, confidence in business is seen as a positive quality to be rewarded and encouraged. However, studies have shown that overconfidence leads to serious errors and unwillingness to recognise and correct mistakes. For example, road accidents are nearly always caused by driving errors, but when drivers themselves were surveyed, less than 1% of them claimed to be worse than the average driver. This is true in many other skills as well; no one wants to admit to being average or worse than average; that means many people are being dishonest with themselves and failing to recognise errors and room for improvement.
This widespread superiority complex has been called “the mother of all biases”. It affects everything from driving to relationships to court decisions to business. Studies show that it leads people to blame others for their own shortcomings and helps them justify bad behaviour. For example, thinking, “Lots of people cheat on their taxes; I'm not any worse than anybody else. I'll just not report this one thing.”
Overconfident attitudes are contagious in an organisation and can sabotage it. If people work in a field such as investing or banking, they're more likely to show signs of overconfidence because they're surrounded by people with similar attitudes. Even working with one person with a deluded sense of self can influence you. Studies by Joey Cheng of York University involving pairs working on a certain task showed that the humbler person imitated the qualities of the deluded person and began to give more wrong answers.
When people at a company all think they're cleverer and more likely to succeed than everyone else, they're setting themselves up for a fall. While you don't want to be down on yourself all the time or overly pessimistic either, it's important to face reality and look honestly at areas for improvement and growth.
Overconfidence leads to serious errors
Superiority complexes are more common than you might think
Inflated confidence is contagious
Be aware and face reality