I'm going to take a wild guess that you think you're pretty smart when it comes to your particular area of business. That is, if you've got a marketing firm, then you probably think you're pretty knowledgeable when it comes to all things marketing. Or if you've got a computer services company, that you're pretty swift when it comes to questions about the computer industry.
Well, guess what? You might be wrong.
According to research on more than 2,000 executives in a variety of industries conducted by J. Edward Russo and Paul Schoemaker, executives are very overconfident when it comes to knowledge of their industry. Not only that, but in certain industries, this overconfidence was higher than in others.
For example, people in the adversing industry were 90-percent certain that the answers they gave on the Russo and Schoemaker's survey instrument were correct. However, the answers they gave were actually wrong 61 percent of the time. And executives in the computer industry were 95-percent certain that the answers they gave were correct. Fully 80 percent of them were wrong. How about money management firms? The results weren't quite as embarrassing. While money management executives were 90-percent certain that their answers were correct, only half -- 50 percent -- were wrong.
So what does this mean for you?
It means that no matter how much you think you know about your industry, you should regularly check your assumptions. It's easy to become overconfident, and this overconfidence can lead you to make mistakes. And as we all know, mistakes are something we in business can afford few of today.
Excellent post! unless people make a conscious effort otherwise they are guilty of the curse... the curse of knowledge, that is. "The curse of knowledge was explored in 1990 by a PhD candidate named Elizabeth Newton. For her dissertation, Newton asked participants to tap the rhythm of a well-known tune. The tappers predicted that listeners would be able to identify the songs 50 percent of the time, whereas in reality the listeners could only figure out the tune about 3 percent of the time. The reason for the disconnect, Kruger says, is that tappers would inevitably "hear" the whole, orchestrated tune in their minds as they tapped, whereas listeners heard only an irregular series of taps." The tappers had WAY too much confidence that listeners would understand their tapping. from: www.businesspundit.com/the-curse-of-knowledge-why-communi...