Are You Too Optimistic?

by Sheryl Nance-Nash

3 min read

Andy Grove, co-founder of Intel, one famously said that “only the paranoid survive.”

He was right, asserts Steven Blue, author of Burnarounds: Unlocking the Double-Digit Profit Code, a book about transforming small companies into global powerhouses. “Don’t make the mistake of being a fat, dumb, and happy CEO.”

Blue points to the recent economic crisis, when many businesses went belly up. “Could it be their CEOs didn’t see the recession coming? You’d have to be on another planet not to see the signs. But they were fat, dumb, and happy, hoping things would turn out right. They didn’t. And when their companies crashed and burned, these CEOs were fat, dumb, and unhappy.”

Striking a balance between optimism, vision, and pragmatic decision-making can be a real challenge, says Mark Hall, founder and president of the advertising agency Firehouse.

Just as consumer optimism can lead to overspending, owner optimism can result in foolish snap decisions.

“Pause, look at the numbers, and flip through your options before making any decision,” advises Marnie Swedberg, who mentors business leaders. “Optimism is like a legal opiate — enjoyed at the right time, in the right doses, it’s a tremendous response to pain and setbacks. Overuse, however, can lead to addiction, or worse, the death of our dreams.”

The trouble starts when optimism causes a small-business owner to ignore reality, says Sabina Ptacin, co-founder of the small-business community Tin Shingle. “Some things in your business may not be working, and no matter how optimistic you may be, they will continue not to work,” she says. “Being blind to this will hurt your business.”

A good example is an employee who is not contributing. “No business, and especially a small business, can afford to have team members on board who do not work to their fullest potential and aren’t helping to contribute in some vital way to the bottom line,”Ptacin says.

How to Avoid Being Overly Optimistic

1. Face reality. In the case of an ineffectual employee, “it’s very hard to teach someone to work hard and independently, and no amount of optimism will change that,” Ptacin says.

Similarly, know when to pull the plug on marketing and other plans. For instance, let’s say you come up with what you believe is a fabulous way to generate buzz for a new service. Although it’ll put a dent in your marketing budget, you think it’s a worthy investment. After a couple of months, however, you cannot see any impact on your sales or visibility. Get real.

“If at this point you’re not seeing results, you have to reassess your marketing strategy and expenditures,” Ptacin says. “Small businesses have to watch their marketing budgets and change course strategically if things aren’t working. Don’t simply hope the plan will work at some point.”

2. Keep candid company. Hall recommends surrounding yourself with people who tell it like it is: “Don’t simply assume you’re the ‘thinker’ and those around you are the ‘doers.’ Diversify your inner circle with those who are more pragmatic, more careful, and more conservative in nature.”

Your conservative colleagues will force you to use facts and logic — and not simply emotion — to persuade them. Moreover, when you combine your optimism (drive and vision) with pragmatism (an executable plan), you’ll be able to overcome the barriers that are sure to arise as you proceed, Hall adds.

3. Be transparent. At times, you may be challenged to withhold information from employees for the sake of appearing steadfastly optimistic, says Russ Hovendick, founder of the coaching firm Directional Motivation. However, being transparent about whatever is going on with the business, positive or otherwise, can help your team bond.

If handled properly, Hovendick says, sharing the issues, collaborating on a plan of action, and then enthusiastically charting your course can provide results beyond normal expectations. “Your enthusiasm, sprinkled with a bit of realism, allows your team to see a true leader, not a projected facade.”

As Kevin Weir, a business coach with ActionCoach, notes: “Optimism fuels a desire to succeed and grow, but business owners should realize that the larger their business gets, [the more] they have to focus on being a business owner, not a product manager or cheerleader.”

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