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You’re often asked for your opinion on matters within and outside your core competence. It’s tempting to respond with confidence and authority.
But doing so reflects an absence of what I call the “H factor.”
Misplaced emphasis on confidence
There’s a wealth of information about the importance of answering questions with confidence. The underlying assumption is that being supremely confident enhances your credibility. Some believe self-confidence will make you “unstoppable.”
There’s an appropriate role for self-confidence. You need to be confident in your ability for others to appreciate the value you provide. There’s evidence having general self-confidence enhances academic achievement. Others believe an appropriate level of self-confidence is “linked to almost every element involved in a happy and fulfilling life.”
It’s important to strike a balance between the right level of self-confidence and the “H factor”: humility.
The importance of humility
According to Karl Albrecht, Ph.D, humility is “widely underrated” in most Western cultures.
Albrecht believes humility involves rejecting “the visceral impulse to oppose or outdo others, or to auto-react against perceived threats to one’s established sense of self.”
When you project humility towards others, they feel “affirmed, appreciated, encouraged, validated, and psychically nourished.”
Isn’t that how you want prospects, clients, colleagues and your loved ones to feel about you?
In your business relationships, it’s easy not to reflect humility. Here are some examples.
Rigidity in providing investment advice
When it comes to investing, there’s much we just don’t know, requiring humility about the advice we provide.
I have great respect for proponents of factor-based investing, but it has underperformed the average dollar invested in the market over the past 10+ years, especially after fees.
I also know some fine advisors who ignore factors and limit stock market exposure to ETFs like Vanguard’s Total World Stock Index Fund ETF Shares, which has an expense ratio of only 0.08%.
It’s impossible to predict which strategy will outperform over the next decade (or more), which means there is little basis for being terribly confident in either approach.
Even Ken French who, along with Eugene Fama, identified the value premium in 1992, stated there’s “no way to tell” whether the value premium has declined or disappeared.
He has the “H factor”.
Projecting personal biases
A lack of the “H factor” is also evident when you confidently advise clients about lifestyle choices, by assuming what has been beneficial in your life will work equally well for them.
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When I look at the photo underneath the headline to this article, my first reaction (when I place myself into the image) is: skin cancer and sharks. You may see serenity, an opportunity for exercise and bonding with your loved one.
We would both be “right.”
Your experience is unlikely to be relevant for all your clients, who have different backgrounds and psychological baggage.
There is no evidence that advisors or coaches have uncovered the secret to living happier, more fulfilling lives.
When you have the “H factor,” you’re comfortable politely refusing to give advice that’s beyond your expertise.
Dan trains executives and employees in the lessons based on the research on his latest book, Ask: How to Relate to Anyone. His online course, Ask: Increase Your Sales. Deepen Your Relationships, is currently available.
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
