Psychology for Business

Critical Optimism in a Pessimistic Economy

The economic forecast stinks! My company is struggling to get the numbers up. Don’t ask me to be optimistic! I may have trouble keeping my own position. Worse yet, I am not even sure my business will survive.

Sound familiar? The enormous dedication to pessimism (believing things are bad, and that they are likely to remain bad for a long time) may actually be a realistic picture of today’s economic situation. Warren Bennis, author of the recent book, Managing the Dream, states that, "ten years ago senior executives were reading In Search of Excellence, and now they are reading, Only the Paranoid Survive. However, we must ask ourselves, do we perpetuate the pessimism or reach for the silver lining?

According to Martin Seligman, author of Learned Optimism, the pessimist is likely to be more accurate than the optimist, in assessing the business climate, based on present information. Nevertheless, it is the optimist who preserves or improves the present situation, keeping the current work force producing at a high level, and who envisions the economic turn-a-round. Without the belief that the business climate will improve, it won’t! It requires optimism (not an unrealistic fantasy) to have the courage to see tomorrow’s growth, and take the risks to make it happen. This is not to say that reasonable adjustments do not need to be made, however, panic is not called for either. All businesses experience distress and fear when the economic forecast is poor.

The companies that prosper during a down turn are the companies that look for the aspects of there business that are going well, or likely to improve, despite the current struggles. These are areas requiring more attention. As is so simply pointed out in Johnson’s recent book, Who Moved My Cheese, when the situation changes we need to change as well. We must move on with a critically optimistic perspective. The situation will improve, as long as we are not immobilized and just whining about what should not be happening.

What can you do to remain (or become) optimistic?

Don’t panic, patience and reason must prevail.
Assess the situation with the pessimists first. They are likely to be presenting an accurate present picture. But don’t get lost in their pessimism.
Look at what is or could grow. As is consistent with any investment when one part of the economy is suffering, another part is benefiting.
Look for your strengths, focus on them and emphasize them in your organization.
Evaluate whether your business is experiencing difficulty due to the normal swings of the economy, or the temporary shifts in consumer fears and interests.
Keep a focus on the things you can control, such as how you manage your resources and what products will be developed to meet the future demands of the specific consumers you serve.
Turn to your optimists. The individuals that have vision and undampered enthusiasm. To generously expand John F. Kennedy’s charge to the American citizens, "ask not what your company can do for you, but what you can do for your company". The optimists will rally. Why? Because they believe things can and will get better. You can’t keep a good optimist down. Optimists do not believe they are responsible for most of the problems, but do feel responsible for the solutions to the problems.
Follow the theme of successful athletes, who endorse the phrase, "when things are not going well, losers look for excuses, winners look for ways to improve".
If you are an optimist, you know and act like things are going to get better. Will this affect others? Watch and see. True pessimists will continue to forecast gloom and doom. About 20-25 % of the employees will be pessimistic and show it in their behavior. Research suggests that 50-60 % will generally be content and respond to the cues provided by their leaders. Every study clearly shows that productivity and attitude will improve when leadership demonstrates optimism. Best of all 20-25 % will evidence significantly improved creativity and measurable enthusiasm toward their work, the management, and the company as a whole, when the leadership exhibits an optimistic attitude and a positive, future growth, perspective.
10 Look at your personal relationships (which also affect your work and the work environment). What is the difference in your family’s, or friend’s, reactions when you evidence the spirit of the depressed pessimist versus the excitement of the enthusiastic optimist?

Optimistic approaches to life produce improved health and positive work relationships. This has been continually researched and proven to be the case. Therefore, when you use the pessimists to assess the situation and the optimists to direct and lead the challenge of changing the economic situation in your organization, you and your employees will be coping constructively with the economic slowdown. You and your employees will be happier, more loyal (you can’t afford to lose the key employees) and significantly more productive. Your business will not only survive, but you will have an excellent opportunity for growth.

So, what will you do to deal with the pessimistic economy? Will you get depressed and go down (taking everyone with you) or finding a "realistic" silver lining by remaining optimistic, and strive to get your company to light at the end of the tunnel? It is not just an over used cliché when people say "you are in control of your own destiny". You know what is true. You know what to do.

Now, just do it!

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