People often show overconfidence when unaware of how a situation can lead to bad outcomes, even in cases that may seem simple. For example, a client may be considering multiple offers you are unaware of, a competitor may be working on a similar product, or the market may take a downturn just as your company prepares for an IPO. If you’re working with someone who does not recognize the difficulties that situations can cause, it’s important to increase their awareness of some factors beyond their control.

Under-appreciation of the situation

Some people believe they're more highly skilled than they really are. They often fail to appreciate the complexity of expert performance, which adds to their overconfidence.  One way to help is to work with your team on hypothetical situations so that they can get a glimpse of what they still need to learn. You should be explicit about what aspects of their performance they need to improve without undermining their confidence.

Over-appreciation of skills

Overconfidence can lead to arrogance. Arrogant people value their own opinions, skills, and knowledge over that of other people. It can be helpful to talk with these team members about their respect for others in the organization. Reflect on some of their words and actions to help them see how they come across to others. It can also be helpful to point out great things that other people in the organization have done to reinforce the expertise of colleagues.

Lack of recognition of other people's skills

People's confidence usually matches their ability and the situation. If they're under-confident, they may not take on opportunities that could benefit them. If they're over-confident, they may agree to things when they're out of their depth. As a manager, you should pay attention to the confidence displayed by your direct reports. When they seem overconfident, it's beneficial to help them recognise the reason why they should temper their enthusiasm.

Over-appreciation of skills

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