Pessimism: Good for Business?

Radhika Sivadi

3 min read ·


Enough already with all that hope and good cheer. Experts suggest a healthy dose of pessimism can be incredibly useful.

Americans have an international reputation for optimism, and in the land of sunny dispositions, entrepreneurs are the top of the heap in terms of their hopeful outlook. I mean, how else could you face all the setbacks starting a business throws at you?

But even as we celebrate our can-do frontier spirit and our bold optimism in the face of serious challenges, is there a case to be made that sometimes pessimism is an undervalued asset?

That's what a post by Leslie Brokaw on the MIT Sloan Management Review's Improvisations blog argued recently. Not simply a fight back against the annoyingly Pollyanna, the post suggests that both optimism and pessimism have their place and the real key for business people is to find the right mix for each particular challenge.

"Many people put themselves into one of two camps: optimists or pessimists, people who tend to approach the world in either a consistently upbeat or a mostly skeptical manner. But researchers are now looking at the ways people mix and match their approaches, calling this 'strategic optimism and pessimism,'" writes Brokaw, who was a founding editor of Inc.'s online presence. As Edward Chang, a professor of psychology at the University of Michigan who runs an Optimism-Pessimism Lab, explains: "many of us use these mind-sets in a flexible way and this flexibility has a lot of advantages."

So what good can a bit of downbeat thinking do you? For one, it keeps us on our toes, an effect Brokaw explains by pulling a quote on pessimism from Psychology Today:

Surprisingly, [pessimism] can be most helpful at the moments when we might seem to have the least to feel pessimistic about. When we’ve been successful before and have a realistic expectation of being successful again, we may be lulled into laziness and overconfidence. Pessimism can give us the push that we need to try our best.

Being gloomy in outlook can also help us foresee problems down the road and head them off. As compared to a breezy optimist, an executive focused on what's likely to go wrong at a meeting is more likely to remember to put unfriendly participants at other ends of the table or think ahead to order snacks for hungry, cranky attendees, says the post.

Aside from Brokaw, another surprising advocate of the controlled use of pessimism is 4-Hour Work Week guru Tim Ferriss, who has explained in the past that visualizing the worst possible outcome of any scenario and facing the anxiety this produces fully, can help those who dream big conquer their fears of failure and actually act on their plans. And this use of defensive pessimism is also endorsed in the Psychology Today article cited by Brokaw, which quotes Kate Sweeny, a professor of psychology at the University of California, Riverside. She argues that visualizing the worst-case scenario not only helps us act, but also helps us prepare in case it finally comes to pass. "When you finally get the bad news, you still feel bad, but not as bad as if you never saw it coming," she says. "You've had a chance to work through the emotional implications of this negative event in advance."

All of which isn't to say, that you should throw out your can-do hopefulness and sunny outlook. Optimism has big advantages, from insulating us against failure when it does occur to giving us the courage to try things (like starting a new business) that are statistically unlikely to succeed. Plus, optimistic people generally do better with others, both getting more gigs more easily and being promoted more readily once they're working. So no need to go all Eeyore about everything, but don't reflexively opt for optimism all the time either.

Do you agree that a modest dose of pessimism is entirely healthy, and perhaps currently undervalued?

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Radhika Sivadi