The confidence game
Why winners win
In life, confidence can be all the difference between success and failure, mastery and misfortune. It's the propellant behind everything from setting out in a new career to approaching strangers, heading in a goal on the soccer field, or taking a stand on principle. That we value it can be seen in the many books touting how to achieve it. In short, it can mark the bounds between a sunny life and one lived in perpetual crouch.
But can confidence--which Harvard Business School Prof. Rosabeth Moss Kanter calls "a sweet spot between arrogance and despair" --be translated from an innate quality into a force organizations can cultivate as a driver of success? And if so, can this be accomplished in a concerted way--not just a frothy, let's-all-pull-together exhortation--that, say, allows a business to handle challenges with aplomb?
Yes, says Kanter, one of today's most prolific management scholars, in a new book, Confidence: How Winning Streaks & Losing Streaks Begin & End. Using disparate examples of confidence at work--from the supremacy of the University of Connecticut women's basketball team, which sometimes beat arguably superior talent to win championships, to the turnaround of consumer products giant Gillette Co.--Kanter contends that confidence is the key to achieving success and maintaining it.
Consider, for example, her behind-the-scenes account of events at Continental Airlines when last summer's colossal power blackout struck the Northeast and Midwest. It was a time of chaos and confusion for millions, but Continental seemed especially hard hit: Two of its hubs, in Cleveland and Newark, N.J., lost power. Yet Continental canceled only a relative handful of flights, compared with hundreds grounded by other airlines. In the wake of the outage, Continental was the only major airline running in the New York City area. Its crews flew special flights to accommodate customers and to reposition aircraft. Within minutes of the black-out, Continental employees were mapping out how to keep planes flying and passengers moving through security. With computers down, agents called Houston headquarters on cellphones for passenger information. There was backup power in Newark, and the weather was good. But the power stayed out in Cleveland until the next morning. At both airports, crews managed to load, unload, and push back jets, all without power.
Senior executives, including President Larry Kellner, were at the center of communications that busy day. But those calling them weren't asking permission for what to do. Instead, they were passing along details of what already was in motion. Years of investment in reshaping its corporate culture had produced an institutional confidence that Continental was able to deftly draw upon to surmount a dire situation, says the 61-year-old Kanter. "This was entirely a matter of the system they built," she says from her country home in Martha's Vineyard, Mass. Things worked so well that for the two days after the blackout, Continental's revenues were $4.3 million higher than normal.
Continental shows how organizational confidence--and the faith it inspires in customers--can be the product of tangible, albeit difficult, efforts to foster such qualities as decisiveness and assurance. In fact, Kanter posits, there are three "cornerstones of confidence" for organizations to seize upon. First: accountability, whereby people want to share information, take responsibility, work to high standards, and have nothing to hide. Next: collaboration, in which people respect one another and want to work together, because they've come to know each other in a variety of settings. Goals are shared, and the stars help the low performers. Finally: initiative, whereby people feel that what they do makes a difference, so they offer ideas and suggestions--in short, they seize the initiative.
The real world. So, rather than being an intrinsic quality of personality, organizational confidence is a capability to be developed just like, say, manufacturing efficiency. "It's a little more than an individual deciding to have hope," she says. An organization's success will always rise or fall depending on what its people do, "but whether you decide to take those actions at all comes from confidence."
Away from the banks of the Charles River where Harvard Business School can be found, real-world practitioners say that Kanter is on the mark. Paul Gudonis, head of Centra Software Inc. outside Boston, recalls his time at an Internet service provider in Silicon Valley in the mid-1990s. It was when the Web was really beginning to take off, yet service was plagued by serious outages as firms struggled under the load. "There was a real crisis of confidence," Gudonis recalls. Realizing that clients were growing increasingly jittery, his firm, BBN Planet, responded with a complete overhaul. There was new hardware for better backup systems but new thinking, too, such as guaranteeing that the network remained in service. The company, he says, had the confidence not only to realize that a sharp course correction was needed but also to actually make it. Those steps then became the foundation for the firm's growth into a billion-dollar business. "Confidence has to be earned," says Gudonis, who also chairs the Massachusetts High Technology Council. "You can't just dictate confidence in an E-mail." The value of Kanter's work, he says, is in making clear that managers need to consider confidence as an official tool in the toolbox. "She's telling leaders, 'You've really got to assess the confidence factor in your organization, figure it out, and [then] do something about it.' "
Steve Marquart, a director for the Bain & Co. consulting firm, recalls a food company client in tough straits because it came to be in the path of giant Wal-Mart. The food company needed to chop $300 million in costs, with most of the cuts to land on stores at the front line. The effort worked, at least in part, because the cost cutting was set up to allow a reluctant group of individual store managers some flexibility in how to trim their stores' expenses, he says. That freedom gave the store managers the confidence necessary to believe the program could work, Marquart says, while also avoiding the kind of across-the-board slashing that can be so debilitating.
On the other hand, to see how things can go terribly wrong, consider Kanter's account of the travails of Seagate Technology, the Silicon Valley maker of computer disk drives. The disk drive industry has long been an up-and-down business. But even by that standard, Seagate was in big trouble in the mid-1990s. Divisions didn't communicate with one another. An intimidating atmosphere, in which people were expected to follow orders and work long hours, gave rise to the derisive moniker "Slavegate." There was even an award--which people were proud to get--given to the manager who had been most argumentative at meetings. At one point, nearly a third of Seagate's products required rework, and the scrap level reached $200 million in one quarter. When IBM introduced competing products, Seagate lost $1 billion in sales in just nine months. In the years since, new management has cleaned house and worked to build teamwork--one of those cornerstones of confidence. By last year, the company was producing three times as many drives with fewer than half the people. Things had improved so much that when an engineer made a $10 million goof involving a new production process, he wasn't sent to face the firing squad. Instead, he reported the problem, and his "teammates" sprang into action to fix it.
Confidence is Kanter's 16th book; her better-known titles include The Change Masters , When Giants Learn to Dance, and World Class: Thriving Locally in the Global Economy. Kanter says the seeds for her latest effort lay in the gloom that followed the bursting of the Internet bubble, with the heavy blow of that September morning three years ago providing an emphatic punctuation mark. "I was having this visceral sense of everybody, from economic prognosticators to business investors to the general public, going from exuberantly optimistic to being exuberantly pessimistic," she says. "I began to see there was this underlying psychology that had to be fixed." Lingering economic sluggishness, she reasons, can be blamed partly on a sag in confidence. "I began to see how important that factor is in driving behavior up and down," she says. "I began to see the need to understand these cycles."
Play ball. Thus, she divined from experiences as varied as pro sports (the Philadelphia Eagles), complex organizations (the British Broadcasting Corp.), and even nation-building (Nelson Mandela's post-apartheid South Africa) a way to view confidence and where an organization lies within a confidence life cycle that runs from low ebb, to recovery, and then to arrogance and fall. Any organization has problems, but winners catch them, solve them, and move on, she says, while losers deny them, cover them up, or let them pile up. While her inquiry into confidence covers a wide range, Kanter says the notion is probably most critical for business. Corporate America's status as a social institution today has plunged following seemingly endless scandal. Businesses need to restore trust and confidence, not only among their employees but also with customers, and not just because it's a nice thing to do. If nothing else, it's easier to attract good people and investment.
What's more, in today's knowledge economy, innovation is the way to grow. "And you don't get innovation," she says, "without the initiative of your people" --one of those critical three cornerstones of confidence.
In her long career, Kanter has covered a lot of ground, trenchantly describing and prescribing what's best for businesses and organizations. But with this new research, Kanter says, she's more convinced of its universality than anything else she's ever written.
You might say she's confident.
This story appears in the September 13, 2004 print edition of U.S. News & World Report.