The Business Case for Optimism

By Patricia Wheeler

“I’m not an optimist or a pessimist…I’m a realist,” the leader said. We were discussing his 360 degree leadership feedback. His organization needed him to take a bigger and more visible role, and operate with more strategic focus. His team recently weathered a corporate restructuring, and many were confused and anxious about the changes as well as worried about their individual careers and the company as a whole. He was surprised by his low marks on items measuring “sets a positive and compelling vision for his team” and “leads with optimism and inspiration.”

The leader, whom we’ll call Pete, pushed back on my suggestion that we address this in his Development Plan. “Why shouldn’t I just work on developing my strategic focus?” he asked. “Isn’t that what will drive results?” I told him that while this should certainly be on his radar screen, we needed to dive deeper into how the comments on his pessimism factored into the effectiveness and execution of his strategic dialogue with the team.

We all fall somewhere on the optimism/pessimism continuum. Comments by Pete’s stakeholders told the story. “Be less critical of us when we’re working 14 hour days already,” one said. “Tell us what we’re doing right,” another said.

Dr. Martin Seligman from the University of Pennsylvania has researched optimism for over 25 years. He’s the leading expert on how optimism produces clear return on investment….not only in our health and personal life, but in our business results. His book Learned Optimism is a classic resource. He describes pessimists as those who believe bad events are persistent, will undermine one’s efforts and tend to be caused by one’s shortcomings. Optimists, faced with similar circumstances, believe that defeat is a temporary setback resulting from a difficult situation; under pressure, they tend to try even harder.
In one study, Seligman studied MetLife agents selected for traits of high optimism and lower expertise in their industry; these agents outsold the others by 21% during their first year. In their second year, the optimistic group outsold the regular sales pool by over 50%.

Examples abound in sports performance as well. Seligman studied professional baseball and basketball teams, as well as Olympic swimmers, to track the drivers of success. In situations of high challenge, the results were especially striking. In one study, competitive swimmers were told that their race performance was worse than it actually was. After a brief rest, the swimmers raced again; the pessimists’ performance worsened, but the optimists’ performance stayed even and at times was even better.

How does optimism drive effective business strategy? Setting a clear, compelling vision is an intrinsically “optimistic” effort. To be maximally effective, leaders must conceptualize and articulate a bright future and believe in their ability to achieve their desired results despite the obstacles in their way.

What situations benefit most from an optimistic approach? Those that require sustained motivation to achieve results, such as selling, where individuals must be confident in the face of frequent rejection. Also, situations requiring motivation during complex change; in short, most activities in today’s business climate benefit from teams and individuals employing an optimistic response style.

When is optimism NOT the best strategy to use? As with any good thing, optimism can be overdone. Here’s when not to use your optimism muscle to excess: in high-risk situations where the stakes are high, you need to think of what could go wrong, and articulate a “brightness and darkness of the future” dialogue. Being realistic includes a clear assessment of both downside risk and upside opportunity. A good optimist understands the power of vision and can articulate the desired future.

Pete decided to deliberately act more encouraging with his team. He consciously practiced this skill, as optimism did not come naturally to him. As his coach, I asked him to pause a moment before responding to his direct reports when they came to him with problems, so that he could respond with encouragement rather than from his “default style” of frustration. As a memory aid, he kept a glass on his desk with a post-it note on it reading “half full.” Sounds simple, but this behavior change was not easy for Pete. After six months, he was pleased to see that his team was back on track and well on its way to implementing the new strategic plan. And Pete commented that his more optimistic behaviors were reaping rewards at home as well.

Coach’s tip: Ask yourself: what’s your own default position on the Optimism/Pessimism continuum? Which could you use more of, to obtain the balance of a true realist? How would your team respond to more encouragement and faith in their abilities?

Optimism, like leadership, is a learnable skill.

Patricia Wheeler is an executive and team coach who helps smart people become more effective leaders. As Managing Partner in the Levin Group LLC, she has spent 15 years consulting to organizations and coaching senior leaders and their teams. Her work helping executives succeed in new roles is featured in The AMA Handbook of Leadership. You may contact Patricia by E-mail at Patricia@TheLevinGroup.com or by telephone at 001.404.377.9408.