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Courageous Leaders Admit Uncertainty

Don Moore, professor, Haas School of Business | February 14, 2015

The expression of confidence is intimately tied up with leadership. Would-be leaders are careful to present a confident face because it helps gain them credibility and convince others that they know what they are doing.

When George W. Bush faced John Kerry in their first Presidential debate in 2004, Bush criticized Kerry for having changed his mind on the war in Iraq. “I just know how this world works,” Bush declared. “And in the councils of government, there must be certainty from the U.S. President.” Even those who may have disagreed with Bush’s policies may nevertheless support this view. In his profile of President Barack Obama, Michael Lewis put it this way: “After you have made your decision, you need to feign total certainty about it. People being led do not want to think probabilistically.”

New York Mayor Bill de Blasio got in trouble recently for something similar when he predicted that a snowstorm “could be the biggest snowstorm in the history of this city.” He was doing what leaders routinely do: acting as if they know what will happen when, in reality, there is substantial uncertainty. Different meteorological models offered different potential paths for the storm to take. Some of them did indeed predict 30 inches of snow, but others predicted something more like the few inches that actually fell. de Blasio could not have known which of these models would ultimately prove accurate, but he chose not to represent that uncertainty in his advice to city residents.

By choosing to focus on the worst possible outcome, New York’s leaders sought to encourage people to take precautions. In this, they succeeded. But they also undermined the credibility of warnings of future disasters. When another storm comes, New Yorkers are likely to be more skeptical of the Mayor’s warnings. The leader’s dilemma in this situation: Is it better to err on the side of caution or action? False negatives fail to warn of impending storms, attacks, or disasters. False positives cry “wolf” by exaggerating future risks.

Fortunately, there is a path between these twin risks. That middle way empowers leaders to express well-calibrated uncertainty when they devise policy or recommend actions to the public or shareholders. In other words, don’t just focus on the best, worst, or even the most likely possibility; provide a range of possible outcomes. Companies routinely do this in one setting: corporate earnings. When public companies issue earnings guidance, they provide a range within which profits are likely to fall. Leaders should do this more often and in more areas to avoid the trap of false certainty.

The problem is that leaders may be especially resistant to communicating uncertainty. In my research with colleagues at Carnegie Mellon and UC Berkeley, we found that those who express confidence gain credibility that helps them attain positions of status and influence in the groups of which they are a part. By the time leaders reach the top job, they’ve often learned to err on the side of certainty in order to instill confidence and gain status in their organization. Furthermore, leaders are disproportionately likely to be surrounded by people who praise their wisdom rather than question it.

Though it may be difficult for leaders to embrace uncertainty, there are good reasons for them to do so. Research has shown that over-confident CEOs make overly risky decisions. In the long term, honesty is the only sustainable strategy that we should want our leaders to maintain. We should want them to represent the truth, even when it makes their jobs harder. That is, after all, one of the great missions to which we entrust our leaders: to take the complex information and broad vantage point to which they have access and convey it to us in a useful way.

(This piece was published in the Harvard Business Review.)

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