Can The Dunning-Krueger Effect Kill Your Business?

For years, business owners have happily paid me $1200 for one hour of my time to help them overcome a challenge and/or put together a plan to grow their revenue and profits.

From time to time, I’ve also offered a free 1-on-1 Strategy Session to business owners who are not my clients.

On every single one of these free Strategy Sessions, I provide tremendous value to the business owner by helping diagnose their problem (or usually, multiple problems), and suggesting multiple possible solutions.

Almost always, there are strategies and tactics I could easily and quickly put into place to get tremendous results for the business owner.

Sometimes, I even offer to help the business owner implement them and experience those tremendous results for themselves.

But sadly, most business owners fail to take me up on my offer to help, and then to make matters worse, they almost invariably fail to take action on my suggestions – or even take any action at all – to improve their businesses.

This stubborn insistence on “going it alone” and the failure to get the right help is, in my opinion, THE #1 REASON why 95% of businesses fail in their first five years.

Over the past 30+ years that I’ve built my own multi-million dollar businesses and helped hundreds of others do the same, the most frustrating thing to me is this all-too-common, stubborn practice of business owners to ignore (or even argue!) with what seems to me to be the most basic, simple advice and solution to the problem or problems that they came to me for help with in the first place.

I was discussing this with my own business coach (I learned long ago NEVER to try to go it alone in any of my businesses), and he let me know about something called “The Dunning-Kruger Effect.”

The what??? I had never heard of that before.

Yes, fellow business owner, there really is a recognized “effect” that causes smart, capable people NOT to get the help they need to fix the causes of why their business isn’t performing the way they want it to.

As Cornell University psychology professors David Dunning and Justin Kruger stated in their now-classic 1999 Journal of Personality and Social Psychology article:

The miscalibration of the incompetent stems from an error about the self, whereas the miscalibration of the highly competent stems from an error about others.”

In other words…

1. Unskilled people make the mistake of rating their ability much higher than it really is, because they are not capable of recognizing their own ineptitude, and
2. Highly-skilled people tend to underestimate their relative competence, making the mistake of assuming that tasks which are easy for them are also easy for others.

As Chris Lee explained in his 2012 article Revisiting Why Incompetents Think They’re Awesome:

Dunning and Kruger proposed that, for a given skill, incompetent people will:

1. Fail to recognize their own lack of skill;
2. Fail to recognize genuine skill in others; and
3. Fail to recognize the extremity of their inadequacy.

However, if these incompetent people are exposed to training for a particular skill, they will recognize and acknowledge their own previous lack of that skill.

So what does all of this mean for you?

If you are a consultant or coach: You now have a scientific explanation of why your clients will tend to ignore your advice and why your prospects will tend to think they don’t need your help at all.

RESULT: Now you (and me) can stop being so frustrated when that happens. We can also take heart in knowing that as we educate our prospects and clients, they will become more likely to recognize how much they need our help (or the help of another expert), and will therefore be much more likely to experience success.

If you are a business owner: You now have a scientific explanation of (a) why you have trouble recognizing when you need help with something, and (b) why even when you do realize that you need help, you have trouble figuring out who you should choose to provide you that help, or whether you should even get help at all.

RESULT: Now you (and me) can be sure to do our due diligence to research potential consultants, coaches and other expert sources of help, and we can also realize that we needed to be more open to getting such help to solve our business problems and reach our goals.

Want to test this out, or just want help with a business growth problem or goal?

For reading to the end of this post, I want to offer you the opportunity for a free 1-on-1 Strategy Session with me.

It’s completely free, and there’s no obligation, no catch or no silliness with it. And no, it’s certainly not a sales call in disguise.

It’s the opportunity for us to discuss where you’re at, and whether we ever choose to work together or not, I know you’ll get tremendous value from us talking.

Much of the feedback I’ve gotten from people who I have these conversations with is it’s probably the most insightful hour they’ve had in their business in a long time. And no doubt it’s going to be the same for you.

Basically, I’m offering you the opportunity for us to jump on the phone, to take a good look at where you’re at and where you want to get to, and then map out the precise plan in order for you to achieve your goals in your business.

Just go to www.HelpFromSteve.com and let me know some details. Give me as much information as you can.

I’ll take a look at that and then either myself or my assistant Cherie will reach out to you with a time that works for us to have a conversation. We’ll speak on the phone for about 45 to 60 minutes, and I’ll help you map out your precise plan to profit.

We can even have you set up on this Strategy Session and ready to go by the end of this week, so you can start off 2015 on the right track and be on your way to having a fantastic year as soon as possible.

I highly recommend you go to www.HelpFromSteve.com now and give me some details.

We’ll get in contact, and we’ll have one of the best hours you spend on your business that you’ve had, maybe even since you started your business.

I’m looking forward to helping you out, and helping you figure out what this whole “Dunning-Kruger Effect” means to you and your particular situation – or if it even means anything to you at all.