(MoneyWatch) I sat recently in a senior management retreat and listened as the chief executive said one of the silliest things I've heard in a business meeting:
"All we need is more self belief!"
He was exhorting his team to man up and charge ahead with a big new strategy which had the business doubling its revenue in five years. Yes, it was a big hairy audacious goal, just like Jim Collins recommends. The problem was that, to achieve this BHAG, no additional resources were available and there had been no discussion of reallocating what they already had. The company was, apparently, just going to think positive thoughts to make everything happen.
This popular style of leadership derives straight from the self esteem movement which argues that, if you believe in yourself, you can do anything. For many years, starting in the 1970s, a serious line of argument maintained that self-belief was the key to achievement. Instinctively this felt right. Expectations drive outcomes. If you don't aim high, you can't hit high targets. But somewhere along the line, this got mis-translated into: Just aim high and you will hit high targets. The self-belief, apparently, was enough.
Now, 40 years, about a million books and a billion dollars later, we know this isn't true. Promoting self-esteem doesn't make people work better or smarter. In one experiment, psychologist Don Forsyth and his team at Richmond University took two groups of college kids and, to one group, sent a weekly email containing a practice question. To the second group, they sent a weekly practice question but with it came messages reminding them of the importance of confidence encouraging them to keep theirs up: "Bottom line: Hold your head -- and your self-esteem -- high."
The students who had been encouraged to boost their self-esteem "showed a substantial drop in grades...Feelings of unrealistic optimism," the researchers concluded, "can lead to complacency rather than active coping. Indeed, weak students may maintain self-esteem best by withdrawing effort and minimize the degree to which their self-esteem is contingent on good grades."
Self belief doesn't make people work harder or better; it persuades them that they're so great, they don't need to work at all. Excessive self-esteem leads to over-confidence and risk-taking: Investors who do well in a bull market imagine their returns reflect their own, innate genius. When the market turns, it doesn't occur to them to get out. Why should they, when they're so gifted?
What all this boils down to is unfashionable but refreshing: There isn't any substitute for the hard work and the hard thinking. What we need is more than self-belief.