Perfectly Confident | Don A. Moore

Summary of: Perfectly Confident: How to Calibrate Your Decisions Wisely
By: Don A. Moore

Introduction

Welcome to the summary of ‘Perfectly Confident: How to Calibrate Your Decisions Wisely’ by Don A. Moore. In this book, Moore challenges the notion that confidence is the key to success. Instead, he emphasizes the importance of a well-calibrated confidence level that helps you make sound decisions. Through fascinating examples and research findings, we will explore the dangers of overconfidence, the causes of underconfidence, and how to improve our forecasting abilities to make better choices. Learn how diverse perspectives can aid in decision-making and dive into the significance of confidence in earning trust and effective leadership.

The Dangers of Overconfidence

Success isn’t just about believing in yourself. Overconfidence can be as harmful as underconfidence, as it can lead to snap decisions with potentially disastrous consequences. The 2008 global financial crisis is a prime example of this. Psychologist Gabrielle Oettingen found that people who fantasize about future successes are less likely to achieve them. The key is to use confidence to start the work needed for success, one step at a time.

Don’t be underconfident

Underconfidence often stems from not seeing the struggles of others in difficult tasks. This leads to a false sense of incompetence and discouragement. It is important to remember that even celebrated individuals feel like impostors at times. Comparing one’s hard work to others’ finished products can exacerbate underconfidence. Instead, recognize that consistent effort in areas of weakness can lead to growth and improvement.

Forecasting with expected value

Making better decisions by considering all possible outcomes

Have you ever felt like you could make better decisions if you were able to see into the future? Unfortunately, that’s not possible, and we have to rely on forecasts to make choices. However, people are notoriously bad at forecasting because we tend to be too specific in our predictions, leading to overconfidence. The solution is to make forecasts that consider a range of possible outcomes.

Expected value is a powerful tool for forecasting that allows you to assign probabilities to a range of outcomes and come up with a mathematical estimate of when you’ll actually be done. This approach forces you to consider all possible outcomes for a project instead of making a single assumption that’s likely to be wrong.

Moreover, expected value enables you to save your forecasts and use them to improve your thinking. For instance, if the project ended up taking longer than expected, you could revisit your projections to see where you went wrong.

To make better choices, it’s also essential to consider all options available and not limit yourself to a yes or no question. When participants were asked whether they wanted to buy a DVD or not, 75% of them chose to buy it. However, when asked which course of action they would rather take, only 55% of them bought the DVD. Therefore, knowing all your options is crucial when making choices.

In conclusion, by embracing expected value, making a range of forecasts, and remembering to consider all your options, you can improve your decision-making skills and overcome overconfidence.

The Wisdom of Crowds

Have you ever guessed the number of jelly beans in a jar and gotten it wrong? A crowd may be able to come closer to the correct answer than any single person. This principle applies to more important things than jelly beans. Disagreement can be an essential tool in forecasting and decision-making. Learning others’ perspectives can challenge your biases and lead to better results. A range of diverse opinions is crucial in achieving a more balanced estimate. Courage is required to invite dissent, as seen in Abraham Lincoln’s cabinet. Together, we can achieve more than any single expert.

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