Saturday, September 27, 2008

How Leaders Use Feedback to Accurately Understand People

“There are three things extremely hard: steel, a diamond, and to know oneself.”

Benjamin Franklin, Poor Richard's Improved Almanac (1750)

The decisions we make every day are based on our impressions of our skills, knowledge, talents, values, leadership styles, and so forth. For example, if you volunteer to take on a difficult assignment, you would do so because you believe you have the right stuff to accomplish the mission. You assess your ability and then decide. If your assessment is accurate, you make a good decision. If your self-assessment is flawed, your project may be in trouble. Thus, your evaluation of yourself (and others) is critical to your leadership decision-making.

If self-assessments are so important to decisions, how accurate are they? Not very. (1) When researchers compare self-assessments with objective performance measures, they find a correlation between .2 and .3. That’s weak (0 is no correlation, while 1 is a perfect correlation). For example, there is only a .2 correlation between how well employees expect to perform on a complex task and how well they actually perform it.

There are four primary reasons self-assessments are inaccurate:

1. On average, we all believe we are above average. 94% of college professors say they do above average work. 70% of high school students believe they have above average leadership skills. And 42% of engineers in one high-tech company rated their own performance in the top 5% of all engineers. How many of your direct reports, many of whom may suffer from this self-inflation, shuffle out of performance reviews shaking their heads in disbelief?

2. We overestimate the likelihood of desirable events. I recently estimated that I would lose seven pounds before a biking trip. I lost three. In one large, university lecture class, 83% of the students predicted that they themselves would buy flowers in the annual charity drive for the American Cancer Society, but guessed only 55% of their fellow students would do the same. Four weeks later, the actual percentage of those buying flowers was a mere 43%. What are you overestimating?

3. We underestimate the amount of time tasks take. This is a phenomenon known as the planning fallacy. In one classic study, scientists asked students working on an assignment to indicate the time within which they were 50% certain they could finish the project, as well as the time within which they were 99% certain they could finish. (If the students’ assessments were accurate, about half would have finished by the 50% deadline and 99% would have finished by their very conservative 99% deadline.) Yet only 13% finished by their 50% deadline and only 45% had finished by their 99% deadline. I reminded my project leadership class last week that the planning fallacy is why Microsoft builds a 30 to 50% buffer into most of their projects.

4. We are overconfident in our predictions. This phenomenon is known as the overconfidence effect. We tend to place too much confidence in our ability to make sound predictions. For example, when doctors diagnosed patients as having pneumonia, those who made predictions with an 80% certainty turned out to be right a mere 20% of the time. This is why traders on Wall Street remind each other, "Don't confuse brains with a bull market." Overconfident leaders who base their strategy on their ability to predict future events should take heed.

Here are three practical feedback strategies that can help you overcome the tendency to make flawed assessments of yourself and others, thereby improving your decision-making:

1. Get the facts. Leaders seldom have the knowledge required to assess their competence in a given area. To address this limitation, it's usually best to assume you do not have adequate expertise and ask those who do. One study that compared successful and unsuccessful microbiology labs found that the best labs had more group meetings, where researchers had to answer difficult questions from skeptical peers. Our team employed this strategy when I was a researcher at UC-San Diego. Although seeking negative feedback is rare among leaders, it increases self-awareness, performance and positive perceptions of direct reports, peers, and supervisors. (2) Are you strong enough to ask for criticism?

2. Learn from frequent, candid feedback. Leaders often receive incomplete feedback about their actions, which creates an inflated sense of accomplishment. Performing rapid “after action reviews” can help. Discuss these fundamental questions during quick discussions with trusted, honest individuals: What was the desired outcome? What was the actual outcome? Why the difference? What are the lessons learned? What will I do differently next time? Do I need to adjust my goals?

3. Select the right standard. I was coaching a senior executive yesterday who was disappointed about the ratings his CEO gave him during his annual review. He felt he had outperformed his peers. I suggested that he compare himself to either an objective performance standard (e.g., 360 assessments) or his internal perception of his capabilities, not his peers. Using objective data to evaluate others is also important because research suggests that employees seldom actually achieve the level of expertise they claim. In God we trust, all others must have data.

Benjamin Franklin was right; it is hard to know oneself, but it is not impossible. Moreover, if you want to make better leadership decisions, it is mandatory... because after all, who you are is what has you. How will you adapt these ideas to know yourself better?

Keep on stretching,


1. David Dunning, Chip Heath, and Jerry Suls; Flawed Self-Assessment, ‘Psychological Sciences in the Public Interest,’ Volume 5 Issue 3, 2004, 69 - 106.

2. Robert Eichinger and colleagues, ‘100 Things You Need to Know.’ Lominger Limited, Inc., Minneapolis, MN, 2006, pages 256 - 258.

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