Many executives believe that exuding confidence brings credibility. This is why they’re often loath to appear uncertain – even when it’s impossible to predict exact outcomes. But research has shown that overconfident CEOs tend to make overly risky decisions, usually at the expense of their shareholders. So firms stand to benefit if leaders start to accept uncertainty and learn to communicate it to employees. Being open about what you’re unsure of helps you avoid bad decisions and allows others to trust you. Next time you’re facing a moment of uncertainty, instead of focusing on the best, worst, or even most likely possibility, provide a range of possible outcomes. Companies already do this when it comes to corporate earnings: they provide a range within which profits are likely to fall. Leaders should use this technique more often to avoid the trap of false certainty.
Adapted from “
Smart Leaders Are OK with Seeming Uncertain” by Don Moore.
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