x Abu Dhabi, UAETuesday 25 July 2017

A powerful argument for judgement

The Life: Could powerful people's judgement be clouded by their sense of self-importance? New research suggests it might.

Overconfident: lulled into a false sense of security, BP executives downplayed the risks associated with Deepwater Horizon oil well before the explosion. Gerald Herbert / AP Photo
Overconfident: lulled into a false sense of security, BP executives downplayed the risks associated with Deepwater Horizon oil well before the explosion. Gerald Herbert / AP Photo

A 19th-century historian and moralist by the name of John Emerich Edward Dalberg Acton once said, "Power tends to corrupt and absolute power corrupts absolutely."

New research has discovered there may be some truth to this - although perhaps not in the way Mr Acton meant. A team of professors has found too much power can corrupt people's ability to make sound decisions.

The theory was tested through a series of experiments led by the University of Southern California Marshall School of Business professor Nathanael Fast, with co-authors Niro Sivanathan of London Business School (LBS), Nicole Mayer of the University of Illinois, Chicago and Adam Galinsky of the Kellogg School of Management at Northwestern University.

In one experiment, they asked people to bet on the accuracy of their own knowledge. Participants were asked to remember and write down memories of when they held - or lacked power - over other people. They were then asked six questions.

Those who recalled feeling powerful lost money betting on their knowledge, while members of the group who did not feel powerful were less risky with their bets and did not lose anything.

This helped prove, according to the authors, that power leads people to overestimate the accuracy of their own knowledge.

"Power can give an individual a sense of confidence which may be observed in more risky behaviour or even a more laissez-faire style," says Sharan Gohel, a senior occupational psychologist and the director of consulting for Innovative Human Resource Solutions, which is located in Dubai.

In some situations, the consequences of being too confident in decision-making can be dangerous; BP executives had downplayed the risks associated with Deepwater Horizon oil well before the explosion, claiming it was virtually impossible that a major accident could occur.

For Mr Fast and his co-authors, the BP case represents an example of how power can affect decision-making. "I would assume power probably was one of the factors that motivated that decision. I wouldn't say it was the only factor. There were probably multiple levels and it's a complex decision," says Mr Sivanathan, an associate professor of organisational behaviour at LBS. Research also suggests powerful people can inflate their own sense of importance.

"Based on our experience, which is evidence-based … when people get too much into the power mode they... [believe] that they themselves are the most important," says Raymond Hamden, a clinical and forensic psychologist with Human Relations Institute in Dubai.

The reality is every company needs someone in charge, and they tend to be the ones who make the decisions - so how can they guard against making the wrong ones?

Look at the problem through different lenses by getting someone else to examine the decision, suggests Mr Sivanathan, who was in Dubai in December providing leadership and power training at an on-shore oil company.

The most effective leaders have people around them who critique their ideas, says Mr Fast. "As a power holder, the smartest thing you might ever do is bring people together who will inspect your thinking and who aren't afraid to challenge your ideas," adds Mr Fast.

gduncan@thenational.ae

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