Tag Archives: illusion

Pitfalls of Leadership: Personal Fables

Is your partner out of the room? Good. Let your mind wander for a second back to your first high school love. Do you remember how intense your feelings for them were? Do you recall that sick feeling in your gut when you were apart from them? The profound, undeniable, sense you had that no one had ever experienced a love as deep or as pure as what you were now feeling for John Q. Quarterback/Suzie Q. Cheerleader?

But along the way, something happened and your love went unrequited. You searched for solace from friends, siblings, parents, perhaps even a shrink, all to no avail. Because no matter how many trees you killed in Kleenex form and no matter how many times you told the story of your heartbreak, NO ONE EVER GOT IT. How could they after all? Mere mortals could never understand the unique splendor of what you had experienced with your Schnookums! Psychologists call this illusion of uniqueness personal fable, and it hurts leaders at least as much as twitterpated adolescents.


Cook College performed a study in which people were asked to rate the likelihood that a number of positive (e.g., win the lottery, marry for life, etc…) and negative (e.g., die of cancer, get divorced) events would impact their lives. What they found was hardly surprising – participants overguessed the likelihood of positive events by 15% and underguessed the probability of negative events by 20%. What this tells us is that we tend to personalize the positive and delegate the dangerous. I might win the lottery, she might die of cancer. We might live happily ever after, they might get divorced.We understand that bad things happen, but in service of living a happy life, we tend to think about those things in the abstract.

The risk management implications of perceived uniqueness are obvious – if leaders make decisions with the mindset that they are a unique snowflake, they are likely to ignore potential risks. If we feel that we are special, we inevitably ignore lessons from history and from watching others. Worse still, if we perceive upside potential to be “all us” and losing to be the birthright of those other schmucks, we’re bound to do stupid things.


So, if you missed the sarcasm dripping from the top of the page, let me point out to you that your relationship with Mr. Hunkyface was probably not as unique as you imagined it to be at the time. What’s more, you’re a lot less likely to hit the jackpot than you might expect. But here’s the trick, by understanding that you’re not all that special, you put yourself in a position to make excellent leadership decisions that might just make your organization, well, special.


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Pitfalls of Leadership: The Illusion of Control


Perhaps nowhere is human fallibility more prominently displayed than in Vegas. Novelty alcoholic beverages, garish lights, and smoke-filled labyrinths aren’t just a good time, they also teach a lot about how we make decisions. So what can the City of Sin teach us about a leader’s tendency to want control?

Obviously, people have a vested interest in feeling competent and in control. In fact, the definition of stress that I find most useful is “the loss of perceived control over an event.” So while the obvious upside of this tendency to feel in control is a perception of personal competence, the downside is that we tend to think we can control random events as well.

Let’s say I offered to sell you a lotto ticket that provided you a 1 in 50 chance of winning a prize. How much would you pay if I told you that I’d take your money, select a ticket randomly, and that would be your number? Now how much would you pay if I offered to let you choose your ticket from among the 50 available, allowing you to pick your daughter’s birthday or the number of Twinkies you ate to win that contest (ah, glory days).

When psychologists run this experiment, people pay $1.96 on average for the tickets that are given to them and $8.67 on average for the tickets where they are allowed to choose the number! Obviously, the odds are the same in both conditions, 1 in 50, but our confidence that we control the universe is such that we are willing to pay 4.5 times more to be in charge.


Another example of our propensity to overvalue our own influence is the tendency of people to overinvest in their own organization’s stock for the stated reason that they can directly impact the stock price. So, Suzie from accounting is going to invest in Coca-Cola because she feels the valuation of the world’s greatest brand lives and dies on the skill of her beancounting. HINT: If you, in isolation, can directly impact the rise and fall of your stock, and make personal investment decisions accordingly – you might be going to jail soon. For the rest of us in middle management, our daily travails don’t matter much one way or the other in the ultimate success or failure of a publicly traded company and it’s best not to invest as though they do.


But Dr. Crosby, now that I know that I don’t control the universe, what do I do now? First off, you can stop blaming yourself for every little thing that has gone wrong on your watch, because you didn’t control that either. Take responsibility where it is rightfully yours, and let the rest roll off. Second, you can embrace the uncertainty inherent in being a business leader. In fact, the volatility of it all is what provides significant upside risk. Finally, exert your energy in areas that matter – study true thought leaders in your industry, build relationships internally, take time to evaluate yourself as well as those with whom you work. The bad news is, your presence alone may not make or break your organization, leaders typically get too much credit and too much blame. However, knowing your limits can help you understand where you are powerful, and give you a sense of self-efficacy without all the megalomania.

Source: http://incblot.org/uncategorized/illusion-of-control/

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