Jennifer B. Davis
As I have mentioned before, I love business books. I know this might qualify me for some type of certifiable mental condition, but I love a good business theory, the ever practical 2x2 matrix, and case studies of how others have failed or succeeded. But there is a downside to all of this reading: business hypochondria. It is a condition whereby any book you read seems to apply to your situation. I suppose this condition exists because popular business authors are a bit like horoscope writers: they try to make them apply to just about everyone. That said, I ran across something recently that caught my attention and made me look around for signs of this condition at my own workplace. Maybe it will have the same affect on you.

Josh Kaufman (the force behind the Personal MBA) had a quote on his blog and mentioned a theory called the Dunning-Kruger effect. According to Wikipedia, it is a documented phenomenon whereby people who have little knowledge systematically think that they know more than others who have more knowledge. Dunning and Kruger won a Nobel prize for their work, so this is serious business. As the theory is applied, they found that "incompetent individuals tend to overestimate their own level of skill" and "fail to recognize genuine skill in others." I think we have all seen examples of managers who can not make good hiring decisions because they themselves are under the delusional effects of Dunning-Kruger (which I will call DK for short). DK managers think themselves to be overly capable and discount the contribution of others. A common malady for sure. But, what is the cure?

According to our experts, if those DK managers will improve their own skill level through training, they can learn to recognize and acknowledge their own previous lack of skill. So, this is the delimna. The only cure for DK is self-awareness and the willingness to be trained. However, the symptoms of DK is lack of accurate self-perception and a belief that one already has gained competence (thus, not needed training).

How can you immunize yourself from DK? Apparently, peole with true knowledge tended to underestimate their competence. So, perhaps you can fein humility, stay open to training and coaching, and can avoid being "grossly incompetent" as the studies have illustrated. Consider yourself warned.

The only cure for business hypochondria? Get rid of your business book collection and cancel your subscription to Harvard Business Review.

2 Responses
  1. raszhi Says:

    As one who has both been myopically over confident in my own skills and ALSO completely capable of underestimating my abilities (call it business Bipolar syndrome or bBs) I found this to be worthy of review. Thank you for taking the time to post. In his book Prosperity and Depression Gottfried Haberler speaks about the influence of behavioral biases within the scope of an organization... and how these biases can amplify a business cycle. He has some interesting things to say in terms of optimism and overconfidence.

  2. I guess we can all be bBs at times, namely because our knowledge in different areas varies. We can underestimate our ability in an area we know a lot about and overestimate our ability in an area we know "just enough to be dangerous." Thanks for posting!