Why you overvalue your own ideas

And why you shouldn't.

by Adam Gale
Last Updated: 10 Feb 2020

Self-belief is usually seen as a good thing. Rising business stars are encouraged to back themselves, to take chances and put themselves forward.

Yet self-belief is of little use if it’s delusional. In fact, it’s positively dangerous. 

The problem is that people have a distinct tendency to overestimate their own capabilities, including the quality of their ideas, as a study recently published in the Academy of Management Journal shows.

Researchers led by Christophe Fuchs at the Technical University of Munich assembled a dataset of 1,174 process innovation ideas from the product division of a major European automotive supplier. 

Each idea was given an estimated financial value by its creator. Those that were successful were then given a real financial value during the company’s innovation evaluation process. 

The study found that in 74 per cent of cases when the innovation was implemented, the originator of the idea overestimated its eventual value to the company.

The real extent of the 'ideator's bias' is likely to be much more, the authors note, as it isn't possible to know how valuable the ideas that weren't implemented would have been.

Intriguingly, the overestimation of one's own ideas was significantly more pronounced among senior employees (82 per cent) and teams (77 per cent). 

“This overvaluation… is to some extent due to overly optimistic self-efficacy beliefs facilitated by individuals’ role or social identities,” wrote the authors.

In other words, we get more overconfident when we rise up the career ladder or operate in groups.

You can see how this would happen. The more senior you are, the less likely you are to be challenged by doubtful colleagues, and the more likely you are to be able to override them. And teams that have fallen victim to groupthink can more easily override an individual naysayer. 

Leaders ought therefore to challenge the quality of their own ideas more. The difficult part is that leaders will no doubt generate lots of good ideas (as one would expect people who generate lots of good ideas to be more likely to advance) and it’s in no one’s interest if the boss is wracked with self doubt.

The trick perhaps is to become comfortable with criticism - if people have the psychological safety to question your ideas, and you have the emotional intelligence to listen to their concerns, your judgement of those ideas should presumably increase. 

Image credit: Universal History Group/Getty Images


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