When Apple CEO Steve Jobs approached AT&T about partnering on a new kind of mobile phone — a touchscreen computer that would fit in your pocket — Apple had no expertise in the mobile market. Yet AT&T executives quickly came to believe so strongly in Job’s vision that they skipped internal process protocols to land the deal. Randall Stephenson, then CEO of AT&T, famously said, “I told people you weren’t betting on a device. You were betting on Steve Jobs.” Apple went on to secure massive commitments from AT&T’s suppliers, who spent hundreds of millions to build factories for iPhone-specific parts.
Can Being Overconfident Make You a Better Leader?
Most of us think of overconfidence as a bad thing, but there are ample stories of overconfident—and successful—CEOs. Is it possible that in a leadership role, overconfidence might have an upside? To study it more closely, a research team examined 1,921 U.S. companies over the period from 1993 to 2011, quantifying overconfidence by tracking the CEO’s vested-in-the-money stock options. Only the most overconfident CEOs would have such strong belief in their abilities that they are willing to excessively risk their personal wealth. The researchers found that firms led by overconfident CEOs are associated with significantly lower employee turnover, higher employee investment in company stock, and more and longer-lasting relationships with key suppliers.