Between Hubris and Vision
President Obama appears serenely confident as he goes about fixing the worst global financial crisis in more than half a century while simultaneously revamping the national health-care system, changing the way Americans use and produce energy, giving tax breaks to 95 percent of all households, and seeking "a cure for cancer in our time."
Obama is not the first American leader to lay out a vision that seems improbably ambitious. George W. Bush did the same thing in seeking to establish a democratic foothold in the heart of the Middle East by launching a war against Iraq -- even as the United States was tied down fighting a war in Afghanistan with a military force that many experts warned was too small.
It's easy to be skeptical about overconfidence, especially in hindsight, but what makes it interesting is that history is full of examples of leaders who accomplished improbable things largely because they thought they could -- when everyone said they couldn't.
Stanford University psychologist Deborah Gruenfeld once got to thinking about power during an airplane trip on which she was stuck between two other passengers in economy class. The man on one side, a high-powered type sporting a blue suit, a giant gold watch and a ton of swagger, reached up and turned on his air vent so it blasted cold air directly on her. She sat in her cramped middle seat, getting colder and colder, her contact lenses getting dryer and dryer, until she realized she could just reach up and turn the vent off. Gruenfeld later asked herself why she had not acted sooner -- why she felt deprived of control.
In a nice demonstration of making a lemon into lemonade, Gruenfeld turned her experience into an experiment: She had one group of volunteers recall a time in their lives when they felt powerful and another group recall a time when they felt powerless. All of them were then seated in a room uncomfortably close to a fan blasting air at them. Those who had been reminded of feeling powerful tended to switch off the fan or divert the blast. The poor volunteers who had recalled feeling powerless mostly sat and shivered.
Gruenfeld and others have shown in this and other experiments that the central characteristic of power is not that it triggers optimism, self-esteem and action -- all of which are true -- but that it produces a sense of control. This may be especially true of those who, like Obama, rise quickly from relative obscurity to great prominence.
Power can prompt people to venture into domains where they actually possess very little control. Those who feel powerless, by contrast, mentally constrain themselves and believe they have less control than they actually do.
Adam Galinsky, a psychologist at Northwestern University who has conducted a number of experiments with Gruenfeld, said human accomplishment appears to be at least as much about "cans" and "cannots" as it is about "haves" and "have-nots." If power tends to corrupt and sometimes leads to arrogance, it also allows people to conceive of possibilities that the powerless cannot imagine.
In an experiment reported in Psychological Science and led by Nathanael Fast, a graduate student at Stanford, the researchers showed that power produces such strong feelings of control that people can come to believe they can control things that are literally uncontrollable: Volunteers made to feel powerful felt they had more control over rolling dice than those who felt powerless.
This might explain something about the CEOs who helped trigger the ongoing financial meltdown by taking disastrously aggressive risks. Financial titans may believe they can get away with extraordinary risks for no better reason than that they happen to be financial titans.
Between 1998 and 2001, shareholders of companies that acquired other companies lost $240 billion of value after the merger announcements, according to research by Sara B. Moeller at the University of Pittsburgh and others. And an unusual 15-year analysis conducted by Ulrike Malmendier and Geoffrey Tate at the University of California found that personal overconfidence among CEOs appeared to be a potent predictor of excessively risky takeovers.
Overconfidence among business leaders appears to have much in common with the fairy-tale stories of princesses who transform toads into handsome princes by bestowing their kisses. In one of his legendary letters to shareholders, Warren Buffett quipped that "many managerial princesses remain serenely confident about the future potency of their kisses -- even after their corporate backyards are knee-deep in unresponsive toads."
A final piece of the power puzzle: People who suddenly gain power after a long spell of powerlessness seem especially prone to outlandish ambition, according to a study led by Niro Sivanathan at the London Business School and published last year in Organizational Behavior and Human Decision Processes.
Does all this spell disaster for Obama and Democrats in Congress, who have both rocketed from the wilderness to near-total power? Not necessarily. The paradox that the research reveals about power is that overconfidence in one's ability to control things explains both the greatest triumphs and the worst failures of leadership.
Hubris may just be the name we give to visionaries who fail. Vision may be the name we give to hubris that succeeds.
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