Watching the Dunning-Krueger Effect in action can range from amusing to frustrating to downright frightening. The impact on your consulting firm is very real because it affects your target market and also your consulting team (including you).
What is the Dunning-Krueger Effect?
Your ten year-old, having watched you drive from their car seat, and with many hours of experience behind the wheel of their toy jeep, feels quite confident they can drive your new Tesla in traffic.
You look at any professional far removed from your expertise (legislator, traffic planner, tinker, tailor) and think, “Sheesh! I could do a way better job than them with my eyes closed.”
After devouring a documentary on bean-to-bar chocolate, you excitedly explain to your spouse how you will make millions if you invest all your retirement savings into a plot of land in Ecuador… oops, I may have been projecting.
According to Wikipedia, the Dunning-Krueger effect (a.k.a. “DK Effect”) is a cognitive bias in which people with limited competence in a particular domain overestimate their abilities.
The DK Effect at Your Client
Typically, you can’t win business from a client until they move past the DK Effect—the belief that they know enough or are competent enough to solve their problem themselves.
If the problem your consulting firm solves appears, at first glance, to be solvable using common sense, your prospects won’t appreciate or correctly value your help.
Remedy: Share information.
When you educate your prospects by generously offering your consulting firm’s ideas, approaches, and experience, your prospects’ awareness of their own incompetence will emerge.
The DK Effect at Your Consulting Firm
Some consultants may enjoy being generalists because each time they work on a new problem or in a new industry, they quickly become an “expert” (in their own mind). Building a career out of overconfidence is a remarkable achievement; however, it’s not best for clients or the firm.
Remedy: Develop deep expertise in project design and management, which will be your consulting firm’s true strength if you’re committed to maintaining a generalist stance.
Remedy: Over-index on calling in subject matter experts to supplement your veneer of knowledge.
Leaping to Conclusions
Every consultant knows the temptation of drawing conclusions based on the first couple of interviews, the first client meeting or, worst of all, the surface similarity between the current project and a previous project.
Every excellent, experienced consultant knows how dangerously wrong those snap conclusions can be.
This tendency may peak when a consultant has about one year under their belt at their current position—analyst, engagement manager, donuts hustler or some other role. However, even tenured consultants can fall prey to the lure of an “obvious” early finding.
Remedy: Relentlessly frame early conclusions as hypotheses, then work as diligently to disprove the hypotheses as to prove them.
Consulting firms that have decided to scale often pull together a board of advisors, typically comprised of a few individuals who successfully built (or worked in) a larger consulting firm. The appeal of obtaining guidance from someone who has “been there, done that” is clear.
However, those advisors frequently embody the DK Effect.
Having achieved one or two successes, they are overconfident in their knowledge of how to build a consulting firm. They often harbor an incorrect understanding of their own route to success, and mistakenly assume advice that worked in their own situation will translate well to the firm they’re advising.
Remedy: Absolutely seek advice from others on how to overcome the challenges your consulting firm is seeking; however, scrutinize the advice you receive, considering whether it is based on a single, personal experience (i.e., an anecdote), or broad knowledge of what has worked for many firms like yours.
Do you ever encounter laypeople who are overconfident in their knowledge of your consulting firm’s area of expertise? Have you ever been overconfident based on an introductory understanding of a topic?
Text and images are © 2023 David A. Fields, all rights reserved.