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In February 2016, David Cameron announced that there would be a referendum in June on whether or not the UK should remain in the EU. He went on to declare that he would campaign for the Remain side. He appeared confident that he would win. He said at the time: “The Americans would probably say it’s a slam-dunk”.
Of course, he was wrong. There has been much analysis of why the British people voted to leave the EU. But why, and how, in February 2016, was David Cameron so confident that Remain would triumph? There are crucial lessons for all of us in the answer, and they boil down into two key points.
First, David Cameron, and his advisors spent most of their time in what has become known as the Westminster bubble, with people of a similar outlook, background and experience, all of whom frequent the Palace of Westminster and its environs. London, after all, voted strongly to remain in the EU.
"Welcome to 'VUCA': volatility, uncertainty, complexity and ambiguity"
Second, the 50-year trend in which opinion polls became more and more accurate came to an abrupt and unexpected end in the 2015 UK general election. The number of floating voters in the UK (those who change their mind at each election) grew from 13% in 1966 to 38% in 2015. These days, making a prediction based on who people say they support is a poor indicator of what they actually do once they are in the voting booth. The voting environment has become more volatile and uncertain. Welcome, David, to ‘VUCA’: volatility, uncertainty, complexity and ambiguity.
Two questions grow out of these points. These are the questions we have to ask when someone – perhaps ourselves – is confident. First, on what is that individual’s confidence based? How do they ‘know’? Is it because everybody around them is too similar to challenge their ideas? And second, what is different or changing around them?
In 1970, Gene Amdahl, IBM’s chief computer designer, presented the company’s directors with the plans to develop the technology that would enable them to build a computer that would fit on a desk. The director’s response: ‘why would anyone want a computer on their desk?’ Amdahl’s request for investment was declined and IBM missed out on the technology, the microchip, which was to become the heart of the personal computer. This illustrates the dual impact of the bubble effect and discontinuous change at work. IBM directors were surrounded by other IBM directors, all of whom had grown up together in the mainframe business and had the same mind-set: they lived in the same bubble. They collectively failed to notice Moore’s law playing out in front of them. Computing power was doubling every 18 months but they were utterly blind to the fact that the same computing power of a mainframe that filled a room could soon be housed in a box sitting on a desk and that people would buy them in their millions.
How was this possible? We must remember that modern man evolved over thousands of years where the pace of change was minimal or zero. The futurist Alvin Toffler once pointed out that out of the last 800 generations of humankind, 650 of them were cave people. Back then, the past was often a good indicator of the future: past experience provided a good basis for being confident. The idea of economic growth of 1% or 2%, let alone 10%, was unknown until as recently as the 1800s.
As a result, our minds work on the principle that what people – older and wiser than us – think is right is likely to be right. And what comes to us intuitively is also likely to be right. In pre-history, taste for – or tolerance of – uncertainty, was simply a waste of time and possibly dangerous, leading to inaction when it was clear to everyone what needed to be done. Many experiments in psychology have shown that we are motivated to eliminate uncertainty: humans have an aversion to ambiguity. Research by Arie Kruglanski, among others, shows that in stressful situations we trust people in our social group more than we trust outsiders – the bubble effect – and our faith in others is one of our key mechanisms for dealing with uncertainty.
Equally, our ability to entertain discontinuity is poor. We act as if the truths and certainties of the past will hold true in the future. ‘If it ain’t broke don’t fix it’, is the common retort in response to the maverick who suggests we get ready for the forthcoming discontinuity. Instead, we should be saying this: ‘If it ain’t broke, it will break soon, so start thinking about possible discontinuities.’ Not so catchy, but much more valuable.
"We are motivated to eliminate uncertainty"
It is important to clarify what confidence is. I see two sides to confidence. There is the ‘confident that I am right’, type of confidence. Then there is the ‘I am confident in myself’ type of confidence. They may sound like the same thing, but they are profoundly different.
"A confident person can acknowledge and openly express that they are unsure"
A confident person can acknowledge and openly express that they are unsure. A person who is confident that they are always right entertains little or no uncertainty. A person who believes in himself or herself can live with the disagreement of others, with the temporary vulnerability of not knowing what to do, or not being able to satisfy others’ needs for certainty.
These two types of confidence are not opposites or mutually exclusive. The challenge is to recognise the difference. Then you can work on building confidence in yourself, avoiding the danger of slipping into believing that you are always right.
A person who is not confident in themselves, but is confident that they are right, is often the person who finds it hardest to acknowledge uncertainty. The confidence of the ‘I am right’ variety – in the VUCA world – is dangerous. Look at three of the most common dangers: the confidence bias, the comfort zone effect and groupthink.
The confidence bias is the belief that our estimates are better than they actually are. This bias was nicely demonstrated in a 2015 workshop with investment bankers. They asked themselves how many times the f-word was used in the film The Wolf of Wall Street, using the ’90 percent confidence interval test’: giving a range within which they were 90% confident the answer lay. The result was pitiful. Fewer than 25 percent of participants gave an answer anywhere close to the correct number: 506, almost three times a minute. The experiment has been repeated many times with different questions and similar results. We all have a tendency to think our estimates are better than they are.
The comfort zone effect restricts learning and development. If you ask yourself on what basis are you so confident that you are right, the only plausible answer is ‘‘because I have been there before”, or “I have the tools to work out the answer for this kind of problem.” In others words, “I am in my comfort zone”. By definition, if you are in your comfort zone, you are not learning. To understand the detrimental effect that staying in our comfort zone has on our learning, consider the value of feedback and of new experiences.
When you receive feedback from people who see things differently and question your ‘’rightness’’, you have an opportunity to learn both about yourself and about those giving you feedback. When you put yourself in situations that are new to you, you encounter unfamiliar reactions, thoughts and behaviours: you learn. This is how learning takes place, by getting out of your comfort zone and by listening to those who see things differently. Being confident that you are right plays no part. If you are confident that you are right, you feel that any feedback that is dissonant is by definition wrong; so nothing to learn there. If you know you are right, you are by definition in a familiar situation; so nothing to learn there either.
"Feedback is a gift from which you can learn"
However, if you are confident in yourself, then feedback is a gift from which you can learn. And, if you are confident in yourself, then exposing yourself to new situations is a learning opportunity, not a threat. Here again, being confident in yourself leads to a useful outcome; but if you are simply confident that you are always right, the outcome if very different.
Our need for certainty and our unquestioning faith in our group is a defence against the anxiety caused by not knowing. This fuels our tendency towards groupthink. If, in our community of like-minded people, one of our kind stands up confidently and promotes a certain course of action or point of view, we quickly find ourselves agreeing in unison, and committing to act together. Of course, these behaviours have many positive social benefits, social cohesion being one of them. But they do not protect us from being wrong, or prevent our planting the seeds of our own demise.
In a VUCA world, how can we harness the benefits of building confidence in ourselves, and avoid the pitfalls of always believing we are right?
To build your confidence in yourself, consider three strategies. First, be curious about other people, cultures, disciplines and points of view opposed to yours. This is not to say you have to like them, or agree with them: just be curious about them all. Second, from time to time, put yourself in new situations. Learn new languages, take up a new instrument, start playing chess, take up extreme ironing – anything, as long as it is something new. And third, listen. Listen to your inner self, your emotions and your fears. The person who cannot face their fears is lacking confidence.
So how can you work in the VUCA world without losing your confidence in yourself, or falling into the trap of believing you are right? Reject the traditional expert approach to the new. Instead, adopt the adaptive approach.
In simple terms, the expert approach is to:
The adaptive approach to the new is to:
We must all distinguish between confidence as belief in ourselves, and confidence as belief that we are right. In the VUCA world, the latter is dangerous. The former is essential.
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