People tend to overestimate their skills when they don't know much.

<aside> ℹ️ This effect occurs when a person’s lack of knowledge and skills in a certain area cause them to overestimate their own competence. By contrast, it also causes those who excel in a given area to think the task is simple for everyone (curse of knowledge), and underestimate their relative abilities as well.

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The Dunning-Kruger effect is when less qualified people make wrong conclusions and bad decisions but can't see their own mistakes because they lack the necessary skills. This makes them think they are better than they actually are.

On the other hand, highly qualified people tend to doubt their abilities and lack confidence, thinking others are more capable than themselves.

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As a result of the Dunning-Kruger effect, you may not know what you’re good at. You assume that what comes easily to you also comes easily to everyone else. Therefore, you are robbed of the ability to spot your own specialties and talents.

Moreover, when you feel like you’re excelling at something new or challenging,  you might accidentally fall prey to the belief that you have stumbled upon one of your talents. In reality, you may just be a below-average performer, finally approaching average levels.

As you can see, this discrepancy may cause you to make less informed decisions surrounding opportunities or careers you pursue. You may have found yourself turning to peers asking, “What am I good at?” to gain some clearer insight. Understanding the Dunning-Kruger effect can help you discern when to trust your own abilities and when to seek out advice from others who can see you in a more objective light.

When developing software, knowing about this bias helps identify areas where users may make mistakes.

Product teams often mistakenly believe that their users will point out program flaws, but that rarely happens. Users may continue using the software for years without realizing it could be improved (Functional fixedness in action). They might even teach their colleagues to use suboptimal methods. This is why customer success teams should review user behavior analysis and approach with suggestions on optimizing user workflows.

Next time someone with leverage (Boss) tries to sabotage a project because he thinks it's better:

Resources

Dunning–Kruger effect, Wikipedia

Why can we not perceive our own abilities?