{"id":105038,"date":"2023-06-12T09:04:00","date_gmt":"2023-06-12T13:04:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=105038"},"modified":"2026-01-21T16:54:36","modified_gmt":"2026-01-21T20:54:36","slug":"the-problem-with-pride","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/the-problem-with-pride\/","title":{"rendered":"The Problem With Pride: Why Leaders Should Stay Humble"},"content":{"rendered":"\n

What’s the problem with pride in a business setting? How can failing actually help you?<\/p>\n\n\n\n

Confidence is a great thing to have as a leader or entrepreneur, but it’s another thing to be too prideful. According to The Road Less Stupid<\/em> by Keith Cunningham, pride can cloud your judgment on important decisions<\/a> that increase risk for your company.<\/p>\n\n\n\n

Let’s look at why pride can turn into a problem for leaders.<\/p>\n\n\n\n\n\n\n\n

Letting Pride Cloud Your Judgment<\/strong><\/h2>\n\n\n\n

According to Cunningham, letting your emotions influence your business decisions will almost always result in stupid mistakes<\/a>, which, in turn, will result in financial losses. One of the most dangerous emotions of all is pride<\/strong> because it can cause you to ignore risks or expect unrealistically easy profits.<\/strong> <\/p>\n\n\n\n

He warns that the problem with pride is that if you have too much of it in your past successes can inflate your ego<\/a> and give you unfounded confidence in the future success of your projects. In recounting his own greatest financial losses, Cunningham observes that one of the few good things about failing badly is that it humbles you. One humbling failure can help you view future projects more objectively because it takes humility to learn new things and assess your own ideas honestly, both of which are important for anyone directing a business.<\/p>\n\n\n\n

But even if you\u2019ve been humbled by failure, he says it\u2019s helpful to have someone else who can review your proposals without getting emotionally involved. This second check helps keep your pride in check and prevents a lot of stupid mistakes. Many businesses have a board of directors for this purpose.<\/p>\n\n\n\n

More Dangers of Pride<\/strong>

In Ego Is the Enemy<\/em><\/a>, Ryan Holiday elaborates on how egotism (an elevated sense of self-importance<\/a>) can sabotage your career. He corroborates Cunningham\u2019s observations that sometimes ego can drive you to ignore obvious problems with a plan or venture\u2014even when other people confront you with them\u2014and rush into projects without first developing the capabilities you would need to make them succeed.\u00a0

But Holiday points out that sometimes ego can also have the opposite effect: It can prevent you from moving forward with important projects because you spend so much time talking yourself up that you feel you\u2019ve already achieved success. This not only robs you of motivation to move forward but also of the time and mental energy<\/a> needed to actually work on the projects that you envision succeeding.\u00a0

Holiday also echoes Cunningham\u2019s emphasis on the importance of learning and of being humble enough to learn. But where Cunningham suggests that your failures can help to humble you and put you in a better mindset to learn, Holiday warns that sometimes ego can even prevent you from learning from your failures<\/a>: Pride can drive you to blame your failures on other people or circumstances, blinding you to mistakes you could otherwise learn from and creating resentment instead of humility. Resentment makes it harder<\/em> to move on to something new, where you\u2019d have another chance to succeed.\u00a0<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Pride Causes You to Ignore Risk<\/h3>\n\n\n\n

As we\u2019ve alluded to, pride can blind you to risks, and ignoring risks can precipitate stupid mistakes. For that matter, Cunningham argues that the idea that higher risks correlate to higher returns is a stupid misconception. On the contrary, higher risk just means a lower probability of success.<\/p>\n\n\n\n

(Shortform note: The correct way to understand the correlation between high risk and high returns is that a venture needs<\/em> to offer higher returns in order to justify higher risk<\/a>. But, as Cunningham points out, higher-risk options don\u2019t necessarily offer higher rewards in practice.)<\/p>\n\n\n\n

The better you understand what could go wrong on a given project or venture, the better you\u2019ll be able to avoid stupid mistakes<\/strong> and foolish gambles, whether you\u2019re comparing the risks of several possible projects, or deciding what risks to focus on mitigating in a project you\u2019re already working on. He says the key to assessing risks is to write them down so you can compare them side by side\u2014trying to analyze them in your head invites stupid mistakes. <\/p>\n\n\n\n

As you write them out, you can begin to quantify them by estimating their probability of happening, how much loss they would incur if they did happen, and how difficult it would be to reduce the probability or the cost. Once you\u2019ve done this, he advises you to sort them by probability and focus on the top 10 most probable risks for any given venture<\/strong>. This gives you an idea of what could most likely go wrong and how serious the consequences would be. If you couldn\u2019t live with the consequences of any given risk, or if the expected payoff isn\u2019t enough to justify the risk of loss, don\u2019t undertake the venture.<\/p>\n\n\n\n

The Risk of Inaccurate Risk Assessments<\/strong>

As Cunningham says, writing out your risks side by side can help you compare them objectively, facilitating better decisions. But only if the cost and probability of each risk is reasonably accurate. Error or uncertainty in these values introduces the risk of making the wrong decision based on a faulty risk assessment. Let\u2019s consider a couple of factors that throw off the accuracy of your risk assessment.

Analysts warn that it\u2019s easy to underestimate the seriousness of risks if your data isn\u2019t sufficiently detailed<\/a>. For example, suppose that your company has 1,000 customers distributed throughout the US and 20 other countries. That makes the risk of changing customer preferences seem pretty low because it would take a truly sweeping global change to affect your entire international customer base. But what if 75% of your profits<\/em> come from just 10 large customers, all of whom operate in the same industry and are based in southern California? This detail increases both the cost and the likelihood of the risk because a change to their industry, California\u2019s regulatory code, or other local factors could influence their preferences simultaneously.

Some experts, such as Nassim Nicholas Taleb<\/a>, also caution that it\u2019s easy to underestimate the risk<\/em> of low-probability events that could have catastrophic consequences. In Fooled by Randomness<\/em><\/a>, Taleb argues that humans tend not to prepare adequately for low-probability events<\/a> because they confuse assessing risk (which you can do objectively) with predicting the future<\/a> (which no one can do accurately): If the probability<\/em> of a certain risk is very low, we tend to assume that it won\u2019t happen<\/em>, so we don\u2019t take action to mitigate it. 

However, he argues that if consequences<\/em> are severe enough, even a low-probability risk can warrant significant mitigation because the value of the risk is equal to the probability of it happening multiplied <\/em>by the cost or consequence. Cunningham\u2019s recommendation to focus only on mitigating your top 10 most likely<\/em> risks arguably succumbs to this tendency to underestimate the risk of low-probability events.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Pride Causes You to Expect Profit Without Effort<\/h3>\n\n\n\n

Cunningham also lists greed, laziness, and impatience as consequences of pride that lead to particularly stupid mistakes. Sometimes laziness and impatience can drive you to abandon a business venture that would have been very profitable if you\u2019d been more persistent. <\/p>\n\n\n\n

Greed, laziness, and impatience also make you vulnerable to get-rich-quick schemes. Cunningham asserts that anyone who promises to teach you how to make millions of dollars with minimal effort, regardless of your situation, is just guessing that you\u2019re lazy and greedy and trying to take advantage of you. He says sustainable success always requires sustained effort and a clear focus on the right tasks<\/strong>. Furthermore, the tasks that you need to focus on depend on the situation. Thus, any legitimate business consultant will ask a lot of questions and take the time to learn your situation before offering any advice about how to make your business more successful.<\/p>\n","protected":false},"excerpt":{"rendered":"

What’s the problem with pride in a business setting? How can failing actually help you? Confidence is a great thing to have as a leader or entrepreneur, but it’s another thing to be too prideful. According to The Road Less Stupid by Keith Cunningham, pride can cloud your judgment on important decisions that increase risk for your company. Let’s look at why pride can turn into a problem for leaders.<\/p>\n","protected":false},"author":14,"featured_media":35431,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,14,9],"tags":[1058],"class_list":["post-105038","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-management","category-psychology","tag-the-road-less-stupid","","tg-column-two"],"yoast_head":"\nThe Problem With Pride: Why Leaders Should Stay Humble - Shortform Books<\/title>\n<meta name=\"description\" content=\"Pride is a dangerous emotion that can cause your company's downfall. 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