The Decision-Making Flaw in Powerful People

Posted on February 4, 2012. Filed under: Uncategorized |

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.
In the second experiment, 63 students were asked to estimate the cost of tuition — as calculated by U.S. News & World Report — for each of seven public and private U.S. universities that appeared in random order on a computer screen. The participants answered questions about how confident they were in their responses and how powerful they felt in their relationships with others. The participants were then provided with another student’s estimates, which, unbeknownst to them, happened to be the correct numbers, and were given a chance to change their responses. Just as in the first study, women were significantly more receptive to outside input than men, and power correlated with confidence and an aversion to incorporating others’ views.
In the third experiment, more than 250 people ranging in age from 18 to 65 were asked to estimate the value of coins that filled three jars. The participants were then “primed” to be in either a high-power or a low-power group by being asked to recall and describe in detail a situation in which they held a great deal of influence or very little. A third (control) group was merely asked to describe all their meals for the past 72 hours.
After this “power manipulation,” the participants rated their level of confidence in their answers about the coins and were invited to change them; as in the second experiment, they were apprised of an estimate from a peer advisor that happened to be correct. Once again, participants in the higher-power group placed significantly less weight on others’ input. “Power elevates confidence in the accuracy of one’s judgment, which in turn reduces advice taking,” the authors write.
In the final experiment, the researchers examined whether the effects of power on advice taking reduced the accuracy of the participants’ ultimate judgment. In this study, which was similar to the second one, 126 undergraduate business students were asked to estimate the cost of tuition at each of seven American universities and were primed to be in a high-power, low-power, or control group. Again, they rated their confidence before being offered any advice. But this time, rather than providing generally accurate estimates, the peer advisors gave participants random answers that varied in accuracy. After submitting their final answers, the participants were asked to rate their confidence in their post-advice estimates.
In addition to confirming the previous experiments’ finding that more powerful people were less likely to take advice and were more likely to have high confidence in their answers, this final experiment showed that high-power participants were less accurate in their answers than low-power participants. By calculating the mean deviation between respondents’ initial estimates and the true answers, the researchers showed that low-power participants came significantly closer in their final estimates to the real tuition numbers because they “averaged” their initial guesses with the input from the advisors.
The researchers propose that their findings have troubling implications for organizations — and that power could negatively affect not just advice taking, but also an individual’s approach to seeking help or accepting performance feedback. But because power and confidence are so interrelated, there are ways to mitigate the problem. By “directly addressing the inflated confidence levels of powerful individuals,” the researchers write, “organizations may be able to help people with power take (and/or seek) advice when it is valuable to do so.”
For one thing, organizations could formally include advice gathering at the earliest stages of the decision-making process, before powerful individuals have a chance to form their own opinions. Encouraging leaders to refrain from commenting on decisions publicly could also keep them from feeling wedded to a particular point of view.
Bottom Line:
Powerful people are less likely to take advice from others, in large part because they have high confidence in their own judgment and don’t feel the need to incorporate outside views. By not factoring in others’ advice, however, people in power risk making flawed decisions.

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