Insight: Why We Are Less Self-Aware Than We Think—and What to Do About It

by Tasha Eurich

According to behavioral economist and Nobel Prize laureate Daniel Kahneman, human beings possess an “almost unlimited ability to ignore our ignorance.” Research suggests that we tend to think we’re smarter, funnier, thinner, better-looking, more socially skilled, more gifted at sports, superior students, and better drivers than we objectively are.*1 Scientists have dubbed this the “Better Than Average Effect.” But in honor of our “above average” executive from chapter 1, I call it Steve Disease.

In one study of more than 13,000 professionals, researchers found almost no relationship between self-assessed performance and objective performance ratings. In a second investigation, more than 33 percent of engineers rated their performance in the top 5 percent relative to their peers—and only one brave soul out of a thousand labeled himself as below average.

And as their power increases, so does their degree of overestimation. Compared to managers and front-line leaders, for example, executives more dramatically overvalue their empathy, adaptability, coaching, collaboration, and (ironically) self-awareness skills. What might be even more shocking, though, is that compared to their less experienced counterparts, experienced leaders are more likely to overestimate their abilities. Similarly, older managers tend to misjudge their performance relative to their boss’s ratings of them far more than their younger peers do.

Making matters worse, many powerful people encircle themselves with friends or sycophants who don’t challenge or disagree with them. As professor Manfred Kets de Vries put it, they’re surrounded by “walls, mirrors and liars.” And finally, executives are often rewarded for delusion—for example, overconfident CEOs tend to be paid more than their peers, and as their compensation packages grow, so do their levels of overconfidence.

In fact, Google’s research program found that the single most powerful contributor to psychological safety was vulnerability, or a willingness to openly admit our failings. And that has to start at the top.