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6 Lies We Tell Ourselves

2013 November 13
Jack Nicholson A Few Good Men

When Napoleon Bonaparte said, “History is a set of lies agreed upon,” he meant something more than the old adage about victors writing the history books, he was pointing out that lies are often things we tell ourselves so that we can move on.

And we all do it, mostly because we want to think of ourselves as good people.  The fact that even our best intentions can lead us astray is unsettling and we do what we can to avoid facing uncomfortable truths.

Much like Jack Nicholson’s said in his famous line, we can’t handle the truth.  We’re wired to make snap decisions on scant information and ignore contrary evidence.  We also have a hard time admitting that we are guilty of the same shortcomings we see in others.  So we do what’s sensible.  We tell ourselves lies.  Here are six of them.

1. I’m Rational And Make Decisions Based On Facts

We like to think that we’re rational—that we weigh the facts, think about their consequences and make sound decisions based on the evidence.  However, behavioral economics has shown that’s not true.  We’re not nearly as rational as we’d like to think.

In reality, we rarely have the time or inclination to think things through, so we take shortcuts called cognitive biases.  For instance, we pay much more attention to information that is easily available rather than what’s most relevant (this is called  availability bias) and we remember successes but forget failures (survivorship bias).

Interestingly, even highly trained specialists are susceptible.  One study of radiologists found that they contradict themselves 20% of the time and another of auditors had similar results.  The uncomfortable truth is that we usually base our decisions on something other than facts.

Of course, we tend to overlook these little peccadilloes in ourselves and imagine that only others do it, a phenomenon known as self-serving bias.

2. I’m Above Average

How do you rate yourself?  Chances are, you believe you’re above average.  Most people do.  Research in a variety of contexts has consistently shown that when people are asked to rate themselves on just about anything—their professional skill, driving ability, honesty— a majority believes that they are better than most.

This is often known as the Lake Wobegon effect after a fictional town where all children were above average.  It happens because we tend to game the system.  We pick easy comparisons and are more judgmental of others faults than we are of our own.  We pick easy comparisons and are more judgmental of others faults than we are of our own.

Our tendency to overrate ourselves can result in poor business decisions.  It has been found that CEO’s overconfidence in their ability to beat the averages is a primary factor in their tendency to overpay for acquisitions.  For the same reasons, marketers often underinvest because they feel that their creative ideas are superior.

3. My Competition Will Be Static As I Transform

John von Neumann was undoubtedly one of the greatest mathematicians in history.  He was also an exceedingly poor poker player.  Although he could calculate the odds better than anyone on earth, he failed to take into account what his opponents might do.  His frustration inspired him to invent game theory.

The same fundamental error is also common in business life.  Strategy sessions are big on charts and graphs, but you rarely see any scenario planning.  Decisions are often taken based on a statistical snapshot of the current situation with little discussion of dynamics.

We also have a tendency to talk down the competition.  It’s fun to point out a competitor’s foibles and missteps, but they usually have little or no strategic relevance.  If you know about them, they probably do as well and will take steps to improve.

To paraphrase Wayne Gretzky, you need to skate to where the puck is going to be.  That means that your competition has the same information you do and will likely adjust accordingly.

4. My Employees Love Me (And I Inspire Them)

I once worked with a successful entrepreneur who was absolutely incapable of believing that his employees would ever suspect his motives were anything but pure.  In a sense, this wasn’t irrational, he was truly a nice guy who not only tried to do the right thing, but would bend over backwards to help if he knew that he could.

Nevertheless, he would often arbitrarily alter compensation schemes, responsibilities and job titles and whenever he did, people felt that they were being cheated.  Sometimes, when he made honest mistakes, subordinates were sure that he did it on purpose.  He could never figure out why his employees would suspect his motives.

The truth is that power relationships are inherently mistrustful because one side can more easily opt out.  People who work for us have a strong incentive to make us believe they like us a whole lot more than they actually do, but research has shown that employees opinions are rarely aligned with their superiors.

So, in reality, your jokes are probably not that funny, your ideas are not that brilliant and your staff might very well think that you’re a jackass.

5. I Have The Right Information

In his book, Thinking, Fast and Slow, psychologist Daniel Kahneman describes an exercise he was asked to observe for the Israeli Defense Forces that was intended to identify potential leaders.  When he wrote his evaluations, he was confident he was singling out those who were destined for leadership.

But when he followed up he found that his judgments were little better than blind guesses. He would have done almost as well if he just flipped a coin.  He calls this phenomenon WYSIATI (what you see is all there is).  We’re wired to jump to conclusions if our evidence is consistent, even if is incomplete.

The machinery of our brain is naturally geared towards making quick judgments.  We tend to lock onto the first information we see (called priming) and that affects how we see subsequent data (framing).  Then we will seek out information that confirms our conclusions and ignore contrary evidence (confirmation bias).

Having research to back up an assertion means nothing.  We have a tendency to use data for support rather than illumination.  If you haven’t looked (and looked hard) for contrary evidence, you might as well be shooting in the dark.

6. It’s Not My Fault And I Deserve All the Credit

When things go well we feel a justifiable sense of pride.  We worked hard, we worked smart and we prevailed.  We believe that we should be rewarded and are angry if we are not.  On the other hand, when things don’t go our way, there are always mitigating circumstances and we don’t think we should be penalized.

This is known as a fundamental attribution error and it is amazingly widespread. Interestingly, when we observe others the opposite is true, we will tend to discount situational causes and take results at face value, whatever the circumstances.

So we shouldn’t be surprised when CEO’s demand astronomical pay (even though there is little evidence of correlation between pay and performance) and then ask that their options be repriced when they are under water.

Nor should we be surprised when our staff thinks they deserve a raise (but never a pay cut).  They are simply being rational about the information they see that shows them to be above average and popular.

So if you like this post, I’d be more than gratified to hear about it in the comments below. If not, don’t blame me.  It’s really not my fault.

- Greg
 

9 Responses leave one →
  1. November 13, 2013

    Hi Greg – great article. Another lie is “our historical growth will continue in a nice straight line, onwards and upwards”. This assumption ignores competitive activity, market changes and any failure in planned projects.

    The consistent theme running through all the lies you mention is a failure to tell it like it is, first to oneself then to colleagues.

    Kevin
    Kevin McFarthing´s last blog post ..Pt 2 fig 2

    [Reply]

    Greg Reply:

    That’s a great way to put it. Thanks Kevin!

    - Greg

    [Reply]

  2. November 17, 2013

    While reading this I thought of that famous skit done by George Carlin about all the lies we are subjected to.

    [Reply]

    Greg Reply:

    That’s a great one! Here it is: http://www.youtube.com/watch?v=m2OOms2Ti_4

    - Greg

    [Reply]

  3. November 17, 2013

    Great stuff Greg. I experience this both personally and professionally all the time. Can’t say I am immune as you are correct we are all subject to this. These behaviors prevent a lot of innovation and improvement for sure and certainly are a part of your “why success often breeds failure”. Thanks!

    [Reply]

    Greg Reply:

    Thanks Robert. Yes, we all do it, but hopefully becoming aware of it will help us do it less:-)

    - Greg

    [Reply]

    Pankaj Reply:

    Maybe not less, but when we look back we dont regret for now we may have a reason. That’s the goal I think.

    [Reply]

  4. December 12, 2013

    Great insight!

    Thanks for the clarity and I plead guilty…. but I try very hard to not be an offender!
    Peter Jungmann´s last blog post ..Finding the Best Quesiton

    [Reply]

    Greg Reply:

    Thanks Peter. I think we’re all guilty from time to time.

    - Greg

    [Reply]

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