Here is an excerpt from 250words.com on the impact of overconfidence and then a book review on Left Brain, Right Stuff: How Leaders Make Winning Decisions by Phil Rosenzweig.
Human beings are overconfident. That much is clear. 90 percent of American drivers believe that they are above average drivers; 25 percent of high school seniors believe that they are in the top 1 percent in terms of sociability. No matter how you cut it, the research is clear: we’re all funnier, smarter, and more attractive than our peers. La Rochefoucauld was right: “Self-love is cleverer than the cleverest man in the world.”
But is overconfidence such a bad thing? Is overconfidence ever beneficial? And what, exactly, does it mean to be overconfident? According to Phil Rosenzweig, the author of Left Brain, Right Stuff, “No concept in judgment and decision making has led to as much erroneous thinking as overconfidence.” We typically infer overconfidence after the fact without carefully considering the specifics. Why did Broncos lose the Super Bowl so badly? Simple—overconfidence. Why did Enron collapse? That’s overconfidence, too.
To clarify what we talk about when we talk about overconfidence, Rosenzweig draws from a 2008 paper by Don Moore and Paul J. Healy, “The Trouble with Overconfidence.” Moore and Healy argue that overconfidence is a catchall for three distinct concepts.
Three Types of Confidence
See full article by 250words.com
Left Brain, Right Stuff – Book Review
Left Brain, Right Stuff: How Leaders Make Winning Decisions by Phil Rosenzweig
Left Brain, Right Stuff – Description
Left Brain, Right Stuff takes up where other books about decision making leave off. For many routine choices, from shopping to investing, we can make good decisions simply by avoiding common errors, such as searching only for confirming information or avoiding the hindsight bias. But as Phil Rosenzweig shows, for many of the most important, more complex situations we face—in business, sports, politics, and more—a different way of thinking is required. Leaders must possess the ability to shape opinions, inspire followers, manage risk, and outmaneuver and outperform rivals.
Making winning decisions calls for a combination of skills: clear analysis and calculation—left brain—as well as the willingness to push boundaries and take bold action—right stuff. Of course leaders need to understand the dynamics of competition, to anticipate rival moves, to draw on the power of statistical analysis, and to be aware of common decision errors—all features of left brain thinking. But to achieve the unprecedented in real-world situations, much more is needed. Leaders also need the right stuff. In business, they have to devise plans and inspire followers for successful execution; in politics, they must mobilize popular support for a chosen program; in the military, commanders need to commit to a battle strategy and lead their troops; and in start-ups, entrepreneurs must manage risk when success is uncertain. In every case, success calls for action as well as analysis, and for courage as well as calculation.
Always entertaining, often surprising, and immensely practical, Left Brain, Right Stuff draws on a wealth of examples in order to propose a new paradigm for decision making in synch with the way we have to operate in the real world. Rosenzweig’s smart and perceptive analysis of research provides fresh, and often surprising, insights on topics such as confidence and overconfidence, the uses and limits of decision models, the illusion of control, expert performance and deliberate practice, competitive bidding and new venture management, and the true nature of leadership.
Left Brain, Right Stuff – Review
“Rosenzweig challenges the reader to contemplate the context of real-world decisions… [his] storytelling is fascinating.” — Huffington Post
“[This] reads like a call to action for social-science researchers, imploring them to expand their scope and refine their methodology so that their conclusions will be more pertinent to the thorny choices faced by corporate leaders. Surely Mr. Rosenzweig is onto something here: Researchers need to venture outside the lab and observe the real-world expression of the phenomena they are dissecting.” — Wall Street Journal
“Rosenzweig offers a different slant on how successful businessmen and other leaders assess risk… A provocative reconsideration of the power of positive thinking.” — Kirkus Reviews
“Rosenzweig’s advice is sound and his prose is highly readable.” —Publishers Weekly
“With compelling accounts and research results, Phil Rosenzweig takes us through the world of big, strategic decisions. They are thorny, complex, and risky, and he shows that they require analytic thinking, intuitive judgment, and personal confidence without certitude. Left Brain, Right Stuff delivers an invaluable framework for making good and timely decisions by all who sit in a leadership chair.” — Michael Useem, director of the Wharton Leadership Center, University of Pennsylvania, and co-author of Boards That Lead
“No one thinks as clearly—and writes as clearly—as Phil Rosenzweig does about the diagnostic challenges of assessing the quality of business judgment and about the prescriptive challenges of improving it.” — Philip E. Tetlock, Annenberg University Professor, University of Pennsylvania, author of Expert Political Judgment: How Good Is It? How Can We Know?
“Left Brain, Right Stuff intrigued me on a number of levels. By parsing strategic situations, Rosenzweig convinces us that we control more than we think we do. When we believe in ourselves, we increase the probability of a great outcome. Then add in an understanding of ‘winner take all’ competition and the need to assess relative performance (not absolute performance), and my eyes were opened wide.” — Joanna Barsh, director emeritus, McKinsey and Co.
“Left Brain, Right Stuff will help (force) you to rethink what you thought you knew about behavior and decision making. It will show you how to avoid the traps that have been set by some very popular (and dangerously erroneous) writings on the topic. This book will surprise you, it will challenge your (and your colleagues’) thinking in a very productive way, and it will be fun to read. Read it twice: once for the enjoyment of it, and once for pragmatic applications. It is certain to provoke the right kinds of discussions within your management team, and to raise your organization’s hit rate for effective decision making.” —Adrian J. Slywotzky, partner, Oliver Wyman, co-author of The Profit Zone, and author of Demand
“This fine book argues that the accepted tenets of behavioral economics are inadequate when dealing with strategic decisions in which the players can influence the outcome. The gripping stories neatly reveal the true complexity that is not captured in laboratory experiments, and put a needed reality check on the standard dogma of decision making. Essential reading.” —David Spiegelhalter, Winton Professor for the Public Understanding of Risk, Cambridge University