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The Decision-Making Flaw in Powerful People

Overflowing with confidence, many leaders turn away from good advice.

Title: The Detrimental Effects of Power on Confidence, Advice Taking, and Accuracy (Subscription or fee required.)

Authors: Kelly E. See (New York University), Elizabeth Wolfe Morrison (New York University), Naomi B. Rothman (Lehigh University), and Jack B. Soll (Duke University)

Publisher: Organizational Behavior and Human Decision Processes, vol. 116,
no. 2

Date Published: Forthcoming, November 2011

The decisions made by powerful people in business and other fields have far-reaching effects on their organizations and employees. But this paper finds a link between having a sense of power and having a propensity to give short shrift to a crucial part of the decision-making process: listening to advice. Power increases confidence, the paper’s authors say, which can lead to an excessive belief in one’s own judgment and ultimately to flawed decisions.

Previous research has shown that the quality of decision making declines when people hew too much to their own beliefs and discount too readily the advice of others; outside information helps “average out” the distortions that can result when people give a great deal of weight to their own opinions and first impressions. This paper is among the first to examine whether power — defined as an individual’s “capacity to influence others, stemming in part from his or her control over resources, rewards, or punishments” — reduces or increases a person’s willingness to heed advice.

Using four experiments, including one in a real-world business setting, the researchers employed a form of 360-degree assessment to explore the relationship between power and openness to others’ input. In all four studies, they found that powerful people were more likely than those with less power to disregard and mistrust outside perceptions and advice — and that men were more likely than women to disregard guidance from others. The researchers further discovered that confidence was perceived by many as an important attribute of leadership. They concluded therefore that many powerful people, over time, come to see taking advice as a sign of weakness, assuming that they should project total confidence in their views alone. This, argue the researchers, can be a dangerous assumption.

The first experiment, focusing on 208 professionals, explored the relationship between power and advice taking in real workplace settings. The participants were employed at midsized companies in a variety of fields — including accounting, engineering, sales, marketing, finance, and R&D — and had spent an average of almost four years at their organization.

The participants first rated themselves on how much power they had within their organization, considering such factors as the degree of discretion they had over allocating salaries or bonuses, whether they could hire or fire employees, the extent of influence they had in their own department and other parts of the company, and how much their decisions affected other employees. They also rated their level of confidence.

Meanwhile, their co-workers offered assessments of how willing the participants were to factor in the opinions of peers when making decisions and to reconsider decisions in light of outside input. The researchers controlled for participants’ gender, the amount of time they had worked with the colleagues who were assessing them, and whether their co-workers perceived them to be good leaders (to account for any “positivity bias” in their working relationship).

The analysis showed that people who regarded themselves as having more power were viewed by their co-workers as being less receptive to advice. In addition, they showed elevated confidence in their own judgment. The results further showed that women reported lower levels of confidence in their judgment than men. In turn, co-workers reported that women were significantly more willing to incorporate others’ advice in their decisions.

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