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Why Leaders Fail to Realize They're Wrong

Everyone makes mistakes, but those in powerful positions make many more.

Key points

  • Leaders often fortify themselves with delusional self-confidence.
  • It's not just executives, we are all less self-aware than we think.
  • Our society idealizes winning and grit, which amplifies this admit-no-wrong style.

It's not easy for leaders to acknowledge they've made a mistake. It's even harder for them to admit they are wrong. That's why many leaders adopt a "never apologize" mindset—they stick to their guns rather than admit they were wrong and cut their losses.

As a culture consultant, I often see leaders fortify themselves with delusional self-confidence. They think that not admitting fault makes them look stronger.

Being Wrong Is Not a Disease

We are psychologically inclined to believe we're correct, even if facts prove the contrary. We love being right. However, our lives are full of illusions, memory failures, and irrational beliefs. The conviction that we are right leads us into error.

Error Blindness is a term coined by Kathryn Schulz. She believes we don't have an internal cue to know we are wrong about something until it's too late. She explains in Being Wrong that this delusional self-confidence goes through three phases.

First, we are wrong but don't yet realize it. We fail to double-check facts because we assume we are right. Second, when we finally realize we are wrong, we feel under attack. Finally, we fortify ourselves in denial—we don't want to admit to others that we were wrong.

This delusion gets amplified if you hold a powerful position.

Organizational psychologist Tasha Eurich coined the phrase "CEO's Disease" to refer to this condition. It's the result of low external self-awareness. As you work your way up the corporate ladder, you'll start to receive less candid feedback. Your colleagues become afraid to disagree with you and start filtering what they say.

It's not just executives, we are all less self-aware than we think. Research by Dr. Eurich shows that 95 percent of people believe they are self-aware, but only 10 to 15 percent actually are. It doesn't matter if you have one-on-one meetings with your direct reports and your company facilitates 360-degree performance appraisals. Often, those results don't count.

As a culture, we celebrate overconfident leaders over those who are self-aware, vulnerable, and humble. Acknowledging a mistake signals weakness to many.

Many corporate leaders exhibit narcissistic traits. According to a study out of Oregon State University, narcissists don't learn from their mistakes because they don't think they make any. They neither take advice from other people nor trust others' opinions. Narcissism is directly linked to having power. As the researchers explain, "Narcissists do this way more because they think they're better than others."

Our society idealizes winning and grit, which amplifies this admit-no-wrong style. This is why leaders so often make decisions based on popularity rather than evidence. However, effective leaders prioritize the truth over their reputation. They know that winning requires cutting their losses.

Admit You're Wrong – Cut Your Losses

There's a huge difference between giving up and realizing it's time to quit.

In The Psychology of Sunk Cost, professor Hal Richard Arkes explains the trap in which most of us fall. The more money, time, or effort we spend, the more we want to continue investing in a project. The psychological justification for this behavior is based on the desire not to look like a loser.

Stubbornness often becomes a liability for leaders. They fall into the "sunk cost" trap. They don't want to write off all the money and time invested in an endeavor. By justifying a bad decision, they keep increasing their losses.

Here's what you can do to avoid falling into the sunk cost trap:

Know your own limitations: Challenge your assumptions about yourself. Ask yourself, "What if I am the wrong one?" Before trying to show you're right, give others the benefit of the doubt. One of the most successful companies in its country, 7-Eleven Japan built a culture of continually asking probing questions.

Share your mistakes: Model the right behavior by sharing your recent mistakes with your team. Organize a monthly meeting where everyone can share their errors and what they learned from them. Be the first to share to encourage others to do so. The CEO of the Tata Group, an Indian automotive manufacturer, Natarajan Chandrasekaran, believes that mistakes are goldmines and created an award to encourage failure—and learning from it.

Say "I don't know" more often: Nothing sends a stronger message than intellectual humility. Leaders believe their reputation depends on having all the answers. Great leaders ask the right questions and let their teams find the solution. You don't need to know it all.

What's working? What's not working?: If you ask what you're doing wrong, people may feel too intimidated to respond candidly. If you ask for what you're doing right, you'll just receive flattering words. Ask for both at the same time. Ask your team to give feedback on what's working and what's not, a method employed by Steve Jobs.

Cut your losses: Rather than throwing good money after bad, be ready to change course. Sunk costs play a crucial role in the decision-making process. Don't worry about your reputation. It's better to take the risk of looking weak but being right than looking strong and being wrong.

Fearless leaders make the right choices even if it costs them.