The power of the optimistic leader

Are you harnessing the value of optimism in your organisation, as you manage the economic and cultural impact of the Covid crisis?

If anyone should be pessimistic at a time like this, it’s Andrew Bailey, Governor of the Bank of England. An economy deliberately shut down; an ongoing global pandemic; and the worst economic outlook on record. But despite the dire consequences of Covid, Bailey remains hopeful of a rapid recovery, anticipating that GDP will rebound by 15% in 2021 with only “limited scarring to the economy”.

By doing this, Bailey highlights a crucial quality that the most effective leaders display in times of great uncertainty and upheaval. It’s the quality of optimism.

Optimism is defined as a tendency to expect positive outcomes. This means that even when bad things happen, optimistic leaders look beyond the events in front of them and focus on the actions they can take to get themselves and their business beyond the current crisis.

It’s commonly believed that optimism is a personality trait in the same vein as, say, extraversion. But the truth is rather different – and it offers real opportunity for leaders to create value where others are simply defending their position.

Optimism is more about outlook and behaviour than a static trait, making it more malleable than other aspects of personality. We’ve all had times when we’ve felt optimistic and times when we’ve been a pessimist. These differences in our outlook will have reflected the circumstances rather than our inherent outlook.

Of course, we all know those people who remind us of Eeyore on a bad day, with an attitude of: “It could be worse. I don’t know how. But it could be”. But on the whole, being optimistic about the future is a choice. And leaders who actively choose this approach are much more likely to lead adaptive, successful and innovative organisations. Here’s why.

A future/solution focus

Optimistic leaders are better able to help their organisations respond and adapt to changing circumstances, especially where the need for change was imposed from outside. They tend to more accurately identify causes of success and failure, and correctly assign responsibility for both. So optimism enhances problem solving, decision making and action taking, creating a constructive strategy to get out of difficulty and deliver business recovery.

The optimistic leader derives business value from active coping: looking to engage with the situation rather than shy away from it. Because they look beyond the bad news towards the future, optimistic leaders are likely to be solution focused. They move towards positive action, which is a key enabler for change and progress.

Engaging communication

Because optimistic leaders balance the positive and the negative, their communication is more engaging. Optimistic leaders are better at telling positive stories about what the future could look like and they help those who are feeling anxious to see there’s a way through the current situation. When we hear balanced messages, our internal drive system engages and motivates us to get focused, pursue plans and make progress. For organisations, this drives collective performance and minimises the negative impacts of change.

Andrew Bailey was not being naive when he outlined the prospects for the UK economy. But he chose to balance his message. He was open about the bad news but he countered it with good news.

This is crucial because we respond to positive and negative messages differently. When we hear only bad news, it activates the part of our brain that protects us by responding to threat: fight or flight. In that state, we’ve damped our ability to think clearly, solve problems and take purposeful action.

Not all optimism is good optimism

A firm grasp of reality is known to be one of the hallmarks of mental health. None of us want to follow a delusional leader into the eye of an inevitable storm. There are, then, two types of optimism that we ought to distinguish: pragmatic optimism and naive optimism.

The naive optimist assumes that simply believing and visualising success is enough. In contrast, the pragmatic optimist believes that success will take hard work and perseverance. For both, this turns out to be a self-fulfilling prophecy. Many studies have discovered that the best predictor of an individual’s success is whether or not they believe they will succeed.

However, naïve optimism has limited effectiveness for business leaders since it lacks strategic discernment and realism. Pragmatic optimism, on the other hand, is the more realistic tendency to be optimistic within the constraints of the available. It accepts what isn’t known, what can’t be known and looks for ways to find out what can be known (and done).

Pragmatic optimists balance the present and the future. They are aware of, and focused on, all aspects of the current situation, realistic about the work required to deliver the intermediate steps and use their tenacity to recover from setbacks and achieve their goals. Their attitude supports an action-orientated: “let’s go!” rather than a reflective-orientated: “let’s wait and see!”

For the people we lead, this is immensely powerful. When destabilising events occur, humans look for leadership. If the leaders they rely on are pessimistic, this provokes deep anxiety. People are intuitively smart and they’ll know if a leader is pulling the wool over their eyes, but at the same time they are looking for a solution focus.

It’s about the balance between a realistic assessment of where you are now and a positive momentum to recover. This is called opportunity seeking and it’s correlated with mindful learning; it encourages our people to develop new skills and try new things to adapt successfully to a situation or change.

Cultivating optimism

There are things you can do to help increase your optimism.

• Engage in ‘both ways’ thinking. This is where you look at an issue from multiple perspectives so you can see the situation in its entirety. It’s normal to latch onto the negative aspects of a situation – you’re wired neurologically to stop danger – but leadership requires you to actively view other perspectives too.
• Be careful whom you listen to. Emotions are highly contagious. If you are surrounded by naysayers and doomsday merchants, you are going to find it hard to stay in your more effective position. Change the company with which you surround yourself.
• Practice gratitude. This ancient tradition has been proven to have profound positive benefits on your outlook, your mental health and your subsequent behaviour. Just a few moments each day to consider the things for which you are grateful is enough to reap the rewards.
• Acknowledge what you can and cannot control. Differentiating between these two, and then choosing to focus your attention and time on what you can influence, gives you more agency in the situation and helps you become more optimistic.

Covid has knocked us all for six so we need, more than ever, leaders who are pragmatic and optimistic about our challenges and our opportunities.

It’s happening already all over the world. Giovanni Caforio, CEO of the pharmaceutical giant Bristol Myers Squibb, notes: “As I’ve watched institutions mobilise behind a singular mission for the greater good, it gives me great hope that we are setting a new standard for collaboration to innovate and make scientific progress”.

Now, that’s optimism.