A Guide to Dysfunctional Management and the Evil Workplace
December 4th, 2013 by William

The Illusion of Skill

Charles Darwin (1809 – 1882) sagely noted over a century ago: “Ignorance more frequently begets confidence than does knowledge.”

In a survey of faculty at the University of Nebraska, 68% rated themselves in the top 25% for teaching ability. In a similar survey, 87% of MBA students at Stanford University rated their academic performance as above the median. This phenomenon of believing we’re better than we really are is called “illusory superiority,” a cognitive bias that causes people to overestimate their positive qualities and abilities (skills) and to underestimate their negative ones, relative to others.

In scientific terms this is called the “Dunning-Kruger Effect,” named after Cornell University professors David Dunning and Justin Kruger who are attributed with identifying this effect.

Another psychologist, Daniel Kahneman, the Nobel prize-winning pioneer of behavioral economics, coined the phrase “The Illusion of Skill,” in his book Thinking, Fast and Slow, to describe this phenomenon. His research was based on investigation into the long-term financial performance of stock-traders. His research started with the simple premise that many stock traders typically think their own stock picking skills are above average. He set out to find out if that was true and what skill these stock pickers believed they had that their colleagues didn’t have.

However, Kahneman’s research led him to a different conclusion. He tells us: “The results resembled what you would expect from a dice-rolling contest, not a game of skill.” None had any particular “skill” that made their picks a success.

I can personally attest to this, in that I’ve done quite a bit of stock picking/trading and in retrospect I’ve probably had as many, if not more, losers than winners, yet I’ve always thought of my stock picking skill as above average. The fact that I didn’t lose my shirt was really just luck, not any exemplary skill that I’d convinced myself I had.

The take away from Kahneman’s work is that it can be inferred to apply to the typical workplace as well. As he tells us: “We often interact with professionals who exercise their judgment with evident confidence, sometimes priding themselves on the power of their intuition. In a world rife with illusions of validity and skill, can we trust them? How do we distinguish the justified confidence of experts from the sincere overconfidence of professionals who do not know they are out of their depth? Overconfident professionals sincerely believe they have expertise, act as experts and look like experts. You will have to struggle to remind yourself that they may be in the grip of an illusion.”

Kahneman’s “Illusion of Skill” is something from which we all suffer. We delude ourselves into believing that skill, not chance or luck, accounts for our successes. And we’re not alone. One of the conclusions Kahneman draws is that “the illusion of skill is not only an individual aberration; it is deeply ingrained in [our] culture.”

Kahneman suggests that, “you should not take assertive and confident people at their own evaluation unless you have independent reason to believe that they know what they are talking about.”

The central premise of the Illusion of Skill phenomenon is that most individuals lack the “skills” that enable them to assess their own “skills,” and as a result, they come to hold inflated views of their performance and ability. Thus they exhibit an over-confidence in their abilities.

However, Kahneman tells us: “The confidence we experience as we make judgments is not a reasoned evaluation of the probability that it is right, but little more than a “feeling,” determined mostly by the perceived credibility of the story we delude ourselves into believing about ourselves. Even when the evidence for us thinking this way is sparse, unreliable, or nonexistent, we still convince ourselves our skills are better than they really are. Thus, people who express high confidence probably have a good story they’ve convinced themselves of, which may or may not be true.”

He adds, “Consistent with this notion, research shows that even clearly incompetent individuals (compared with their more competent peers) are unaware of their deficient abilities. And to make matters worse, even if we receive negative feedback about our performance, we will still come to an inaccurate understanding of why that failure has occurred. We never blame our own lack of skill.”

Kahneman explains why this is: “The problem is that ‘failure’ is subject to more ambiguity than success. For success to occur, many things must go right: The person must be skilled, apply effort, and (as we’ve found out) perhaps be a bit lucky. However, for failure to occur, the lack of any one of these components is sufficient. Because of this, even if people receive feedback that points to their lack of skill, they may well not believe it and attribute the failure to some other external factor.”

This helps explain why our society, and our workplaces, are so “me” oriented and why no one takes full responsibility for their actions−they blame everyone else for their failings.

The “Illusion of Skill,” becomes another contributing factor−the last nail in the coffin so to speak−to the demise of the performance review process that’s religiously practiced in most organizations. Practitioners of the performance review system need to acknowledge the Illusion of Skill as the reason all the subjective skill evaluations that are given employees every year do not necessarily increase performance or productivity. The employee may nod his/her head in the review and go right on thinking what an idiot the evaluator is for underrating their skills.

Leave a Reply

Your email address will not be published. Required fields are marked *

Reload Image