September 25, 2024, by Stav Atir and David Dunning, Harvard Business Review
Accurately gauging what you know — and more importantly, what you don’t — can mean the difference between success and failure as a manager.
For example, a study of 36,000 firms started in France in the 1990s found that entrepreneurs venturing into novel areas were more overconfident, such that their sales growth and hiring underperformed relative to their expectations. It is easy to picture a CEO, emboldened by past successes in consumer goods, entering the tech industry only to watch the company’s value crash because they underestimated the complexities of software development. Similarly, think of how many mergers and acquisitions failed not because of flawed logic but because leaders believed they understood markets or technologies far better than they did.
