3 Ways to Avoid Overconfidence

Why is failure so often a surprise? Why are we often shocked and/or unable to explain what happened to our plan? Why are we so overconfident?

In love, it happens more than half the time: Most relationships where we thought we had “the one” don’t end in marriage, and half of marriages end in divorce. Your plans for Happily Ever After don’t pan out. And sometimes, it’s a surprise to one or both of you. Yet, everyone goes into marriage estimating their chances of success at, or close to, 100%.

In selling, it happens too – sometimes more than half the time. Many opportunities sellers mentally forecast don’t make it into the CRM to begin with.  And many opportunities get all the way to the last stage and…you lose. Your plans for the sales version of Happily Ever After (deal, commission, loyal customer) doesn’t pan out. And more often than we admit, it’s a surprise. The presentation went so well!

Hey, sometimes you lose. This article isn’t about failing less, it’s about being surprised less, in both love and selling.

The Root Causes of Overconfidence

There are two main reasons we’re surprised when our plans don’t come to fruition, especially in competitive situations: Systemic Bias and Planning Fallacies. We’ll talk about what they are and what to do about them.

Systemic Bias: Your general level of optimism

Optimism is inherited. Studies show our subjective level of well-being, and our feeling that it will improve, is somewhat invariable. In other words, your outlook will continue to be sunny our cloudy whether you win the lottery or lose your job.

What to do: Nothing. You are who you are in this respect.

Well, there is something: Be aware of your own level of optimism. Knowing the tint of your glasses (rose-colored or dirty brown) helps you understand when what you’re seeing might be different than what really is.

Armed with self-awareness, you can then attack the problems you can control: Planning Fallacies that affect even less-optimistic lovers and sellers.

Planning Fallacies: Cognitive Biases you can minimize

In competitive situations, we tend to be surprised by failure for a simple reason: We fall prey to cognitive biases – mistakes in our thinking processes – that leave us vulnerable to surprises, either bad luck or competitive.

Here are four that I learned and applied from Daniel Kahneman’s excellent book, “Thinking Fast and Slow.” (Please consider buying it and reading it.)

Anchoring: We form a vision of the outcomes we’d like to see, and lock into planning for that outcome at the expense of being open to other possibilities. Sales managers make this worse by asking sellers to forecast revenue potential or solution specifics too early in the buying process. Lovers anchor to internal goals for when they will be married or how tall their potential spouse should be.

Avoiding Surprises:  To minimize anchoring, don’t start with a single outcome in mind. Take the time to visualize a wider range of outcomes. Force yourself to focus on the worst-case scenario or outcomes that fall short of the ideal.

Narrative Fallacy: We take unrelated facts and weave them into a story that makes sense. We mistake correlation (two things happened together) with causality (one thing caused the other. Or, we get causality backward, which could be worse. That’s why you never trust sellers to tell you why they won or lost a deal.  And why you never asked someone who just got dumped why their lover broke up with them.  They’re just telling you – and themselves – a story they made up that makes sense to them.

Avoiding Surprises:  Think critically about the stories you tell yourself – could it be different than what you think? Catch yourself making predictions based on disparate facts and small sample sizes. Learn to say, “I don’t know” instead of making “educated” guesses.

Control Fallacy:  We have the illusion that we control more than we do. We drastically underestimate the role of chance, luck, and coincidence.  In my book “Love and Selling” I relate the story of a seller who instantly became God’s Gift to Selling (he thought) because IBM happened to call him out of nowhere one day with a massive order. You may also know someone who got all impressed with themselves because they happened to catch someone one the rebound.  In either case, that success is not necessarily repeatable – luck played a big role.

Avoiding Surprises:  Use reference-based forecasting to minimize Control Fallacy. Instead of predicting success based on your skill, base it on statistics.  What percent of deals do you win when prospects are trying to break a contract? What percent of marriages to alcoholics end in divorce?

Summary:  Focus on What You Can Control 

Dreamers will continue to dream, and for that I’m glad – without wild and unfounded optimism, we wouldn’t have many of the things that make life good.

But overconfidence infects most of us when we’ve got our mind set on something.  To avoid being unpleasantly surprised, use these tricks to make more realistic plans and predictions…in love and in selling.

Good luck,