The Confidence Gap, Perception -V- Reality

Part 4 in the “From the Touchline” series: Leading Without Playing

The most challenging moments in touchline leadership aren’t technical. They’re perceptual.

You’ve seen it before. The CEO or founder paints one picture of reality, while the board or investors see something quite different. Not necessarily better or worse, just fundamentally different.

The confidence gap. The space between how executives experience their business from the inside and how it appears from the touchline.

It’s not about optimism versus pessimism. It’s about proximity versus perspective.

When Reality Looks Different From Different Angles

The confidence gap isn’t a sign of delusion or dishonesty on either side. It’s the natural result of position.

Executives live with their businesses daily. They feel every operational heartbeat. They witness the small victories and improvements that never make it to the board pack. They carry the emotional weight of decisions that others simply review.

Meanwhile, those on the touchline have the advantage of distance. They see patterns across time, comparisons across businesses, and sometimes risks that can be invisible when you’re immersed in execution.

Neither view is complete on its own. But when they diverge significantly, the result is misalignment that can quietly derail strategy.

What the confidence gap looks like

I’ve seen this play out in multiple ways:

• The founder who describes product feedback as “minor tweaks” while the board sees fundamental issues with market fit
• The CEO who views competitive threats as manageable while investors recognise an existential challenge
• The executive team that celebrates cultural improvements while the board waits for performance to follow
• The leadership that interprets flat growth as “consolidation” while the board sees early market saturation

In each case, the gap wasn’t in the facts. It was in their meaning.

Why the Gap Forms

The confidence gap forms through natural human tendencies:

Emotional investment

When you’ve personally championed a strategy or built a product, maintaining objective assessment becomes difficult. The more sweat equity involved, the harder it is to see fundamental flaws.

Visibility bias

We naturally overweight what we can see daily and underweight what remains abstract. This affects both sides: executives overvalue operational improvements that haven’t yet moved the needle, while boards sometimes underappreciate the complexity of execution.

Performance pressure

When expectations are high, particularly in venture-backed or PE-owned businesses, there’s subtle pressure to maintain confidence even when doubt begins to creep in.

The reality distortion field

This term, famously applied to Steve Jobs, describes the phenomenon where strong leaders create conviction so powerful it can temporarily bend perception, for themselves and others.

In one business where I served as Chair, the CEO consistently described customer conversations as “very positive” while conversion metrics remained flat for quarters. He wasn’t being dishonest, in his direct interactions, customers were indeed enthusiastic. What he couldn’t see was that this enthusiasm wasn’t translating into behavioural change.

Bridging the Gap Without Breaking Trust

Addressing the confidence gap requires delicacy. Push too hard, and you risk undermining the executive team. Say nothing, and you fail in your duty of governance.

The most effective touchline leaders navigate this balance with several approaches:

Ask perspective-shifting questions

“If you were advising another CEO in this exact situation, what would concern you most?”

“If we were just now considering whether to fund this business, knowing what we know today, what would give us pause?”

These questions invite executives to temporarily step outside their immersed perspective without feeling directly challenged.

Focus on patterns, not incidents

Single data points invite debate. Patterns reveal truth.

“Looking at the last three quarters, what pattern do you notice in how we’ve discussed the sales pipeline?”

Pattern recognition creates shared reality without creating defensiveness.

Create context through comparison

External benchmarks provide neutral ground for discussion.

“How do our customer acquisition costs compare to similar businesses at our stage?”

This moves the conversation from subjective assessment to contextual evaluation.

Separate intent from outcome

Acknowledge effort and intent while still addressing results.

“I can see the tremendous work that’s gone into this initiative. What I’m struggling to connect is how this effort translates to the outcomes we agreed were most critical.”

This approach preserves dignity while maintaining focus on results.

When Independent Perspective Bridges the Gap

Sometimes, despite best efforts at internal dialogueue, the confidence gap persists. This is where an independent operational review can transform boardroom dynamics.

Recently, I worked with a high-growth portfolio company backed by a specialist lender. The business had scaled rapidly on strong demand but was facing an inflection point. Headline growth remained impressive, but margin erosion, rising costs, and delivery inconsistency pointed to deeper operational issues.

The lender saw concerning patterns. The management team saw operational progress. Both perspectives held truth, but alignment seemed impossible. Previous attempts to raise concerns had been dismissed, not because they were wrong, but because the portfolio team lacked the operational depth to challenge constructively.

The independent operational review created neutral ground where both sides could meet. It wasn’t about proving either side right or wrong. It was about creating a comprehensive picture that incorporated both perspectives while highlighting blind spots each naturally carried.

The review revealed what neither side had fully appreciated: a combination of overload (multiple major initiatives at once), leadership strain (new executives with limited PE experience), cost escalation (£1.9 million in overspend), and expansion misalignment (underperforming international growth).

What made this approach effective wasn’t just the findings. It was that the review:

• Replaced friction with fact
• Transformed an awkward standoff into a clear-eyed strategic discussion
• Provided management with a credible recovery plan
• Equipped the board with the right questions to ask

The result wasn’t a dramatic overhaul. It was a practical roadmap to reduce complexity, sharpen priorities, and create conditions for confident leadership. Most importantly, it gave both sides a shared reality from which productive conversation could emerge.  Read the case study – Turning Boardroom Tension into Calm, Constructive Progress

The Board’s Role: Clarity Without Interference

As a touchline leader, your job isn’t to override the executive’s assessment. It’s to ensure that assessment includes perspectives they might not naturally access.

This means:

• Creating space for constructive challenge
• Distinguishing between concern and interference
• Bringing external reference points into the conversation
• Recognising when your own perspective might be limited

The confidence gap is at its widest during periods of transformation or market uncertainty, precisely when alignment matters most.

From My Experience: Three Practices That Work

From both sides of the boardroom table, I’ve found three practices consistently effective:

The structured pre-mortem

Before major initiatives launch, explicitly ask: “If this fails, what will likely have been the cause?” This creates permission to voice concerns while they’re still addressable, without appearing to lack confidence.

The reality check round

Once quarterly, have each board member and executive answer a simple question: “What’s one thing about our current position that we might not be fully confronting?” Make it a regular ritual, and it becomes less charged.

The outside-in view

Regularly bring customer voices, market data, and external perspectives directly into board discussions, unfiltered by executive interpretation. This creates shared reality that neither side can easily dismiss.

In one turnaround situation, we instituted a practice where three customer conversations were recorded and shared with the board each quarter, selected at random, not curated for positivity. The unfiltered feedback transformed our collective understanding of our position.

The Courage of Clear Sight

Looking reality squarely in the face, without either excessive pessimism or unfounded optimism, is among the hardest disciplines in business leadership.

For touchline leaders, this means balancing support with challenge. It means asking the difficult questions without assuming you have all the answers. It means helping executives see what might be in their blind spots while respecting their deeper knowledge of the business.

When you master this balance, something powerful happens. The confidence gap narrows not because one side capitulates, but because both sides gain a more complete picture. Decision quality improves. Strategic alignment strengthens. And the business moves forward on the basis of shared reality, not competing perceptions.

This clarity doesn’t come from agreement for its own sake. It comes from mutual commitment to seeing clearly, even when clarity is uncomfortable.

And that might be the most valuable contribution any touchline leader can make.

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