After a successful career in financial services, Chadds Ford resident Peter Atwater decided to do something different. That something turned out to be studying confidence – Atwater became a pioneer in the field of confidence-driven decision-making, studying how and why our confidence level naturally determines consumer preferences, decisions and actions.
Atwater founded a consulting firm, Financial Insyghts, and he teaches at William & Mary and in the Honors Program at The University of Delaware. At a time when global confidence – in our health, institutions and economic futures – is under some stress, to put it mildly, we thought it would be great to hear from an expert who might give hope that renewed confidence might be just around the corner.
TSD: You’ve studied the concept of confidence extensively, and how it influences behavior, particularly in the financial markets. We are certainly going through a much broader crisis in confidence right now – how do you even characterize this moment?
Atwater: Behaviorally, we are in the “trauma zone.” Confidence requires perceptions of both certainty and control. We feel neither now. The sensation is comparable to what we feel when we experience a traumatic event. Suddenly and involuntarily our lives feel upended; and we now feel vulnerable in a world that is foreign to us. We are desperate for solid footing.
TSD: How do you measure confidence at a time like this that is so unprecedented?
Atwater: I measure confidence in terms of how we are acting and by what we are thinking. When our confidence is extremely low, as it is today, all of our actions reflect “me here now” simple thinking. Self-interest, close physical and ethnic proximity and short-term time frames dominate everything we do. We are obsessed with “me here now.” Thinking about the future, for example, is overwhelming – as is most abstract thought.
I would caution, though, in suggesting that today is “unprecedented.” We’ve been here before, both collectively and individually. From a confidence perspective, there are many parallels to how we felt after 9/11. And for people who have gone through a traumatic event in their lives, today’s environment is likely to trigger feelings similar to what they have already gone through.
TSD: Are you seeing any data pointing to differences across the globe in terms of confidence? If so, are there reasons for that – cultural or national?
Atwater: Where the coronavirus has spread, the behaviors have been very similar. As the outbreak has become more real to people, you have seen anxiety soar. Given the invisible threat that the virus represents, the panic is very natural. I am seeing nothing unexpected in how individuals are reacting, nor how policymakers are responding to the outbreak.
TSD: What do you see going forward in terms of a rebuilding of confidence? What needs to happen for positive, sustainable movement there?
Atwater: Today, confidence is very virus-dependent. How we perceive the threat is driving our feelings of certainty and control. For confidence to stabilize, we need the perceptions of our physical well-being to be stabilize. We are all focused on the bottom of Maslow’s Hierarchy of needs – and our basic safety. Until that threat abates, regaining confidence will be difficult. This is something that I would encourage leaders at all levels of government to appreciate. Until we feel less physically threatened, the potential for a sustainable economic recovery is low. In the meantime, policymakers need to find ways to mitigate the financial strain many are now feeling that has compounded the anxiety from the outbreak.
TSD: Is it possible for confidence to be strong when times are challenging or uncertain?
Atwater: Not really. As I said, our level of confidence reflects our perceptions of certainty and control. But there is a big difference between being confident and being resilient. Resilience is how we act when we lack certainty and control.
In the face of a crisis, I think we woefully underestimate our resilience. One of things I see over and over in my work looking at traumatic events is how we adapt. When faced with uncertainty and vulnerability, we quickly find ways to reduce it. We can’t and don’t stand still. I am seeing this already in how local restaurants, for example, have moved from dine-in to take-out and delivery.
This is a period of time when people are going to throw lots of ideas against the wall to see what works and where concepts that resonate are going to help form that critical foundation for confidence. Don’t get me wrong, it will feel painfully slow and awkward at times – we are all learning to ride a bicycle blindfolded here – but there are resilient leaders in our community who are going to rise to the occasion and help guide the way out.
TSD: What would you say to our readers who are looking for a boost – you speak often about how humans naturally gravitate to extreme poles when it comes to their confidence.
A few tips.
First, be nice to yourself. These are times when that mean, self-critical voice in our head naturally comes out. Ignore it. It lies, especially in moments like this.
Second, turn off the news. The media mirrors our mood. Social media and the professional media are reflecting back on us just how we feel. I liken it to listening to Adele’s “Rolling in The Deep” over and over after a break up. Turn it off.
Third, don’t compare. When we feel uncertain and vulnerable, we never stack up well to others, to our former selves, to anyone or anything. When we are underconfident, comparison is self-defeating and only pushes us further into the hole.
Fourth, remember that this is for now and that we have been here before and gotten through it. Panic is physically unsustainable. Our parents and grandparents were right. While not saying it will be easy, this, too, shall pass.
Finally, as counter-intuitive as this may seem, one of the best ways to boost confidence in moments like this is to help someone else. Help is all about demonstrating certainty and control. The more we do for others, the better we will all feel.