Andrew Badham 2018-10-09 08:20:44
A recent study published in the European Economic Review had, what I assume many people found to be, counterintuitive findings. Optimism and entrepreneurship don’t mix. In short, entrepreneurs with above average reported levels of optimism earned 30% less than those without rose tinted specs; a hard pill to swallow for believers in the law of attraction. Those who find this new information hard to believe might have a simple question quite rightly permeating their brains: How could optimism possibly be a bad thing? It’s a rightly confusing conundrum until one takes into account the value of worry.
The much-maligned concept of worry has become divorced from its usefulness. We spend so much time focusing on how to alleviate worry that we forget why it’s there in the first place, for preparation. Worrying allows you to plan and prepare for the possible pitfalls of a venture, and although that might come at the cost of a cheery disposition, it makes for fewer errors. Of course, many people do have serious issues with worry, anxiety and rumination; too much of a good thing is, essentially, the problem here.
Does this mean that there is no place for optimism in the workplace? Certainly not. In fact, the same study found that optimistic employees, in contrast to entrepreneurs, earned more than their gloomier colleagues. It’s difficult to isolate what the causal factor is there. Are they more persuasive and charismatic in wage negotiations? Do their positive attitudes help in teamwork and collaboration? Is it some other factor yet unconsidered? More importantly, why does optimism work for the employee but not the self-employed?
Optimism affected entrepreneurs’ ability to assess risk, but not every employee has that as part of their portfolio. Perhaps the fact that someone else has to worry about the overall health of the company allows them to focus on productivity. If the risks have been calculated and you simply need implementation, then optimism will definitely improve performance. In fact, the work of Martin Seligman found that businesses where positive sentiments were twice as common as negative ones were more likely to turn a profit.
This leaves managers in a tricky spot. They need to be cautious and careful, and perhaps even anxious to avoid potential snags. At the same time, they need to be upbeat, cheery and charismatic to motivate the staff – or at the very least, not demotivate them. It’s not an easy role to perform, at least not alone. Partnering up with someone skilled in either motivation or analysis, depending on our personal deficits, could more easily fulfil those two roles.
A final point that bears recognition is that the article in no way insinuated that successful entrepreneurs were pessimistic. They were merely less optimistic than average. A true pessimist would never start a business in the first place. There should always be some hope that the business could succeed. Successful entrepreneurs are concerned with what could go wrong; they’re not convinced it will go wrong.