In the late 1990s, a new online venture, Webvan, poised itself to become the alternative to brick-and-mortar grocery stores and acquired $1.2 billion in capital. By 2000, it was said to offer 300 kinds of vegetables and high-quality products for home delivery. A year later, Webvan ceased operations. What happened? Chalk it up to overconfidence. Wanting to grow big fast, Webvan didn’t test its services, overplayed its ability to change shopper habits, and overspent.
It’s the fate of many ventures. Entrepreneurs are a confident bunch. Research shows that 4 out of 5 new businesses give themselves a 70 percent chance of success when starting up. The reality is that only a third are still in business 10 years later.
“Confidence is a belief about one’s capabilities,” says Don Moore, a professor of organizational behavior at the University of California, Berkeley. “Overconfidence is a discrepancy between this belief and reality, an excessive faith that is not backed by facts. When you hold on too adamantly to incorrect beliefs, it is easy to get in trouble.”
Fortunately, we can learn to access the right amount of confidence. Here are six ways to cultivate the perfect balance.
1. Calibrate your beliefs.
“You can make your decisions as rationally as possible by striving for accurate beliefs and truth,” Moore advises. Get the facts and historical data about your industry, market, and competition, and be straight with yourself about your competencies and skills. Seek out any information that helps you calibrate your beliefs and calculate your risks — and be rigorous and honest. Look for objective, unbiased evidence. Consider the alternatives to your expectations even if not pleasant. Face the risk you are taking, and determine if it is worth it, so you can go forward level-headed.
Failure can still happen, of course. “But when you have anticipated the risk, you can fail and it won’t shake your confidence,” Moore says. “You may even opt to reassess and try again.”
2. Be humble.
Facts can be painful when your mission excites you. The data may not be in your favor. You may realize that you can’t ever be certain about success. “Humility is crucial,” Moore says. “Wise decisions take into account that your best assessment may be wrong.”
Driven by powerful purpose and passion, conscious leaders may be at a disadvantage in this regard. Wishful thinking can contaminate confidence. “We like to think that good beliefs make good things happen,” Moore says, “but it makes us too optimistic.”
“My biggest test is to be confident with humility,” adds Scott Leonard, CEO and co-founder of Indigenous, a B Corp and high-end fashion label that produces organic, fair trade clothing. “When something goes wrong, the tendency is to tighten, to react, because I don’t want my confidence to get shaken. But I know I am closing doors when I come from this reactive place. As a leader, I can’t afford that.”
Can we remain confident yet be truthful? Can we lead and learn at the same time? “It’s a dance,” Leonard says. “You must be open to what is happening and shifting while simultaneously having a clear sense of direction. Too much confidence, you close yourself off. Too little, you lose your path.”
3. Lean into a growth mindset.
The dance is in part an invitation to shift our attention to the day-to-day fluidity of process and away from a fixed focus on big goals. Rather than being stuck in tunnel vision, we become curious about the steps we take, choose to learn from them, and adapt accordingly.
This practice ultimately helps leaders lean into a growth mindset, as described by Dr. Carol Dweck of Stanford University. Learning with small steps is a liberating approach and can also aid confidence that is too low. In this space, you can trust your resilience.
“Listen, absorb, process, then make a decision,” Leonard advises leaders. “For me, the challenge is to be like a monk, an architect, and a confident diplomat all at once.”
4. Carry forward.
The way you present yourself makes a difference. People are drawn to leaders who appear to be confident. We feel safer around them. Equating confidence with competence, we find confidence inspiring and energizing. Studies show that confident people fare better in job interviews and get promotions faster. When startup founders seek capital, they’re more likely to garner support when they pitch with confident excitement. But you can’t fake carrying yourself with confidence.
Immersed in the the fashion world, Leonard knows firsthand that one’s projected confidence must come from inner integrity. Truly confident people don’t seek attention. They are content with the journey. Their body language shows a warm heart, and their dress style conveys respect. Overconfidence, on the other hand, comes across as arrogance. “Carrying yourself well is like carrying awareness forward,” Leonard says. “You carry a knowing about the steps you must take — literally and metaphorically — even if they scare you.”
5. Be content with low confidence.
Without confidence, no one would ever try anything new. Some of the greatest businesses rely on their leaders’ confidence. Confidence gets us started. But Tomas Chamorro-Premuzic, a professor of business psychology at University College London and Columbia University, proposes that high confidence can ultimately get in the way. It blinds us to new information or the changing landscape of risks, he argues, and delusion takes over.
“Self confidence is only helpful when it is low,” Chamorro-Premuzic wrote in the Harvard Business Review. Not so low that it paralyzes or inhibits us by inducing fear, worry, and stress, he explains, but just low enough to help us recalibrate our goals so they are more realistic and attainable.
With low confidence, you realize how much you can do if and when you are willing to apply yourself and do the work. You remain open to feedback, and you’re honest about your capabilities. This low confidence can be motivating. It keeps you on your toes, yet up to the challenge. It asks you to enjoy the process rather than fix on an ultimate goal.
6. Practice compassion.
Research suggests that self-compassion may be more important than confidence. Self-compassion is a willingness to look at our mistakes and shortcomings with kindness and understanding because, no matter what, we will mess up. We are human.
As a self-compassionate leader, you wouldn’t judge yourself too harshly for feeling inadequate when facing difficulty. Nor would you compensate with a mask of high confidence to hide your insecurities. You simply notice and assess. Self-compassion increases motivation and leads to less anxiety and higher levels of well-being.
The bottom line
Clarity thrives in the space where confidence is balanced and leaders respect the journey as much as the destination. Performance rises, and studies suggest that such behavior will ultimately help leaders better achieve their goals.
Can we cultivate a quiet inner knowing that we are good enough, just as we are, and commit to doing our best? What if we practice this certainty? It may not happen overnight, but checking in on ourselves with intention can help us become better leaders and all-around healthier people.