Is optimism as a leader dangerous?

Author: Kirsty Mackenzie, iMultiply Founder & CEO

We have all probably experienced what can happen with an overly optimistic outlook. The poor entrepreneur who walks into Dragon’s Den realising that he shouldn’t have re-mortgaged his house and spent half a million of his family’s wealth to make a steam-powered car as an alternative to diesel, only be told that the price of coal makes his invention worthless. Maybe you’ve not had that particular experience, but you understand the principle.

Following to excess due to a leader’s attributes is often referred to as the ‘dark side of charismatic leadership’, where the followers are so besotted with the leader that when they all get aboard the charabanc, they are surprised and shocked when the leader drives it over the cliff.

But my thoughts aren’t about ‘charisma’ or ‘inspiration’ but about ‘optimism’, the leader who sees the glass half full.

Optimism is a component in winning

‘Optimism’ can either be about ‘hopefulness’ or ‘confidence’. It is rare that you will begin a new journey without hope or confidence that you’ll succeed. The difference between a successful entrepreneur and someone trying their hand at business is that when there is a barrier the entrepreneur will find a way around it when most people will stop.

Real-life business is not linear, it is more like my dad’s fishing line after I’ve borrowed his reel, a bit tangled. Hope and confidence drive solutions, momentum, and ambition. Optimism is therefore a component in winning. I’m sure Andy Murray doesn’t enter the court thinking ‘I shouldn’t bother today’.

Understanding ‘downside risk’

What leaders need to understand is the ‘downside risk’, and weigh this up realistically. The concept of ‘downside risk’ allows for optimistic success without risking everything. In larger organisations this is useful, in smaller organisations, often you don’t have a choice. You simply have to make it work, optimistically or not.

Everything in moderation

As with most things in life, everything in moderation is an excellent motto. Optimism included, too much and you are blinded to the risk, not enough and you won’t inspire enough stakeholders to follow you. Too many business plans ‘sell’ a three-year return to investors, often in overly optimistic terms as they believe that investors won’t wait longer.

Over-optimism can breed problems, especially when results are not as expected, however, optimism is paramount to success. If leaders were pessimistic about winning, we wouldn’t have vaccines, moon landings, and a whole lot more! Given a choice between ‘optimism’ and ‘pessimism’ then being optimistic is a positive attribute to get motion (and motivation).

A lot of success is determined by overcoming Newton’s 1st  law, that an object will stay at rest unless acted upon by a net external force.  When I fish, I am optimistic that I will catch something, if I wasn’t there would be no point, however, whilst I believe I will catch more than my dad I would never boast about it!

If you are looking to bolster your leadership team with an experienced finance professional who seems to have the right balance of optimism get in touch.

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