The dark side of confidence

Reining in pride is a crucial part of business education, says Rita Trehan, co-author of Too Proud to Lead

Business Schools are magnets for talented, ambitious people who are used to achieving what they set out to do. Usually, these driven students go on to become emerging leaders in organisations and their hard work is rewarded with success. 

But too much success also presents possible pitfalls. After a string of accomplishments, young leaders may conclude that their successes prove that their decisions are always correct, and that their ideas are always the best. That attitude risks leading them to dismiss the ideas and perspectives of colleagues. The word for this is ‘hubris’, and it is equally dangerous for the person displaying the hubris as it is for those working with them.

The importance of well-functioning teams whose leaders prioritise co-operation, humility and open-mindedness are clearly demonstrated in my work as the head of a consultancy that helps CEOs and their organisations examine their culture. So, too, are the dangers of what happens when overconfidence is left to grow unchecked. Leaders’ overestimation of themselves and underestimation of others result in poorer outcomes and missed opportunities for both the business and the person who succumbed to hubris.

How hubris works and how to fight it

Too often in both corporate leadership and business education, we equate the drive to succeed with the pressure to succeed at all costs. The pressure on executives and students to achieve results can lead them to abandon any attempts to consult and co-operate. The pressure to meet and outperform, be it for a class or an earnings report, leads to short-termism and a relentless pursuit of success at the expense of broader considerations. 

This results in leaders being wrongly admired for their overconfidence, drive and single-mindedness. It rewards autocratic decision-making by CEOs and boards, and the forgoing of consultation and collaboration. In the short term, the results from this approach might look good and indicate that things are working. In the longer term, it is bound to lead to problems. Poor collaboration leads to siloing throughout the organisation, which can lead to the creation of fiefdoms in which data is not shared but wielded for power against ‘competitors’ within the company. It is not a recipe for long-term thriving.

Companies concerned with legacy, long-term survival and staying relevant are broadening their purpose. Profit and shareholder value are no longer sufficiently broad aims — businesses need to develop a purpose- and values-driven vision for the future. 

By doing so, they are democratising their purpose and creating ownership of it throughout the organisation. By adopting a shared vision, instead of a CEO-driven vision, companies will diffuse most of the risks of a skewed, hubristic approach taking root. 

The trend towards ‘purpose’ as the key driver of a business’s vision for the future is a healthy one and involves all relevant stakeholders naturally – the board, employees and suppliers, as well as the customers and communities. 

This broadening of responsibility creates a need for greater transparency and a wider set of obligations, which forces CEOs to adopt a more inclusive approach. In this way, ethical, equitable, environmental and societal values become a part of their decision-making.

Business Schools can take the lead

Hubris, like so many other issues, is easier to prevent than it is to reverse. That makes Business Schools the perfect place to curb overconfidence in the next generations of leaders. Fortunately for educators, teaching this is not an additional curricular goal to add to the heap — it can be integrated into the existing syllabus.

Not unlike other competencies in business education, teaching against hubris needs to include the development of critical-thinking skills and emphasise the values of collaboration, long-term thinking and the practice of welcoming alternative and opposing viewpoints. 

Stopping hubris requires: 

1. Being able to spot the warning signs — lack of collaboration, lack of humility and a lack of understanding (or willingness to understand) regarding the effects of their decisions.

2. Understanding why people fall victim to hubris, and which kinds of environments encourage it and how to avoid them.

3. Examining high-profile examples that illustrate the business consequences of hubris, both at the level of companies — such as WeWork, General Motors, Uber and Deutsche Bank — and at the individual level – among the executives whose overconfidence in their infallibility led to predictable failures that tarnish their otherwise brilliant careers. The lessons of history must be accompanied by education in anti-hubris values and skills to check overconfidence.

Cautionary tales

I doubt many readers would need more than a moment to think of several examples of hubris in business. There are cautionary tales among both individuals and entire companies: They’re blockbuster movies and 600-page biographies, or, in the case of Boeing, the subject of tragic TV news for weeks. 

Educators can use these examples as case studies. In the 2021 book, Too Proud To Lead, my co-authors and I look at four cautionary tales. The We Company, once again rebranded as WeWork, shows us, ironically, how its name was belied by a failure to embrace true openness and collaboration, while its investors’ unquestioning faith in Co-Founder, Adam Neumann, constitutes its own form of a complementary, enabling hubris.

While Neumann was overconfident in his own abilities, and instilled that in his acolytes and investors, the subject of our second case study, General Motors (GM), is overconfidence in the permanence of the status quo. GM’s failure to compete with Japanese automakers in the 1980s and 1990s cost it market share and reputation. After its recovery in the late 2000s, aided by the US taxpayer, GM seems once more to be underestimating a new wave of competition — this time from Tesla and the industry-wide move to electric vehicles.

Travis Kalanick’s Uber, meanwhile, shows how building an arrogant corporate culture infects and undermines the reputation and potential for long-term success of a business founded on a great idea. Kalanick, Uber’s Co-Founder and first CEO, oversaw incredible growth at Uber but there have been multiple accusations of sexual harassment and unethical competitive practices at Uber during his reign. An air of invincibility, from the top down, continues to haunt the company. 

These examples offer an indication of how some leaders – to their own detriment – close themselves off, assume the future will look the same as the present, and believe in their own invincibility. All these failures have their basis in some form of unchecked power, but none to the degree of our fourth case study, Deutsche Bank (Deutsche). 

Deutsche’s expansion in the 1990s led it to becoming the biggest bank in the world, with assets of more than $2 trillion USD. Instead of seeing themselves as stewards of capital, Deutsche’s leaders interpreted this growing pool of wealth as proof that they could launder money and manipulate markets. Its scandals have cost it revenue and reputation; it has since been eclipsed by other lenders in the EU, not to mention US and Chinese banks.

Focusing on a positive vision of leadership 

Hubris is not just a label for the defeated, to be appended to the loser as a badge of chastening. It is also important to discuss the hubris of iconic leaders, including Mark Zuckerberg and Jeff Bezos. What is there to be regretted in the careers of the most successfully acquisitive business figures of our time? Doesn’t their influence and wealth prove that their confidence was earned and that any arrogance, however unfortunate, didn’t get in the way of their success? Why shouldn’t students emulate their risk-taking and tenacity? 

In some cases, the backlash against their hubris is in progress: Domination at all costs appears to have put Facebook, Amazon and other tech masters, such as Google, en route to being broken up or otherwise subdued by governments around the world. In other cases, the damage is measured in what could have been: If Amazon was less focused on bending its commercial partners, employees and yes, even its customers to its will, who knows what else the business could achieve? Better pay for workers and better terms for suppliers would cost Amazon money, margin and profit to fix, but probably not enough to wound it or slow it down appreciably. It would also thin the ranks of Amazon boycotters and the desire of its critics to rein it in. 

Hubris, of course, thrives beyond the c-suites of the world’s largest corporations. Being ‘too proud to lead’ can cause the downfall of leaders in organisations of all sizes, as well as the downfall of lower-level managers and business students who have bought into their own early hype. Leaders of organisations you once worked for may come to mind. We do not need to dwell on these examples. Instead, we can focus on a positive vision of what kinds of leadership business education can hold up. Leaders who think through their purpose and align this to a wider purpose for their organisation are broadening their aims and aspirations to be more inclusive, more in touch with the wider world and more in tune with changing trends and sensibilities. These leaders regard this not as a demeaning activity, but an empowering one. With the emphasis on empathy, nurturing relationships, and collaboration, leaders are driven by group focus rather than self-focus, which leaves little opportunity for the self-centred nature of hubris to set in.

Holistically successful leaders do something that I call ‘walking the hubris tightrope’ – they attempt to balance ambition and drive with purpose and service. This art form is more of a process than a destination — avoiding hubris is not a box to be checked off but a value to be imparted. Whether educators choose to teach this will profoundly shape the next generation of business leaders.

Rita Trehan is a business transformation expert and the Founder of consultancy, Dare Worldwide. 
She is also the co-author of Too Proud to Lead: How Hubris Can Destroy Effective Leadership and What to Do About It (Bloomsbury Business, 2021). 

This article is taken from Business Impact’s print magazine (edition: May-July 2021).