Leading with Optimism

According to research from both the Gallup Organization and the Hay Group, roughly 50 to 70 percent of how employees perceive their organization’s climate can be traced to the actions of one person — the leader. More than anyone else, the person in charge creates the conditions that directly affect people’s moods at work and ultimately their ability to work well together and create satisfied customers.

The challenge for leaders is to find a balance between workers feeling good, having satisfying relationships, and keeping their focus on performance goals. It’s no surprise that the ability of a leader to foster group enthusiasm can determine its success. Conversely, emotional conflicts in a group take time, attention and energy away from shared tasks and performance suffers.

“Realistic Optimism”

Leaders’ emotional states affect, to a much greater degree than was previously thought, how their people will feel and therefore how they will perform. It becomes imperative that leaders manage their moods and feelings well, as their emotional intelligence becomes more important at higher levels in the organizational hierarchy.

This is not to suggest that CEOs who project a Pollyannaish view that everything’s rosy in the corporation are being wise. There have been enough corporate scandals in recent times to create healthy skepticism. Rather, a leader should speak openly and frankly, with realism.

When leaders are able to resonate honestly with those they lead, they can then point out a positive perspective or path available. Leading with optimism, and projecting it for others to adopt, should be done in a realistic manner.

Optimism is necessary when motivating employees; however, it is dangerous when planning and forecasting. Realism is key when making decisions and committing large sums of money. An optimistic CFO could mean disaster for a company, just as a lack of optimism could undermine the visionary qualities essential for superior R&D and sales forces.

Optimism, as part of one’s emotional intelligence, is a competency that can be learned, practiced and acquired.

The key to developing the capacity for realistic optimism lies in one’s “attributional” or explanatory style — the way one explains good or bad events. Everyone has a habitual way of explaining events, or attributing causes. This usually happens in split seconds, often out of conscious awareness. Increasing awareness of attributional style is a good way to enhance one’s way of thinking about events, and thus, one’s choice of feelings.

For example, do you:

  • Look outside of yourself to assign blame or look within to see where you have responsibility?
  • Give general reasons for good events or give reasons specific to the situation?
  • Tend to look for transient reasons for bad events or believe the cause to be permanent?Optimists and pessimists explain life events differently. A person who looks at their attributions can consider other perspectives and, by doing so, create more positive feelings.

By the time they’re promoted to top positions, most leaders already have a good understanding of human emotions and already are skilled in optimism and positive emotions. Yet everyone can improve emotional intelligence and flexibility.

Blaming the Weather

Leaders should also be aware of research about common attributional errors that can lead to faulty thinking and errors in causal analysis. Some individuals tend to exaggerate their own talents, believing they’re above average in their endowment of positive traits and abilities.

The inclination to exaggerate one’s own talents is amplified by a tendency to misperceive the causes of certain events. The typical pattern of such attribution errors is for people to take credit for positive outcomes and to attribute negative outcomes to external factors, no matter what their true cause.

One study of letters to shareholders in annual reports, for example, found that executives tend to attribute favorable outcomes to factors under their control, such as their corporate strategy or their R&D programs. Unfavorable outcomes are attributed to uncontrollable external factors such as weather or inflation.

A large body of research shows that people tend to exaggerate the degree of control they have over events, discounting the role played by dumb luck. Executives and entrepreneurs are highly susceptible to these biases. Business leaders routinely exaggerate their personal abilities, especially for hard-to-measure traits like managerial skill. They’re also prone to thinking that they’re in control more than they actually may be.

When such attributional errors show up in the thinking and planning of executives, it can lead to disappointment and negative emotions. That’s why it’s crucial for leaders to get frank and honest feedback, in order to acquire realistic and authentic optimism and create positive emotions that can be sustained.

Keeping employees happy and feeling good starts with developing one’s own conscious awareness of feelings and thoughts. A leader is responsible for creating positive emotions that can drive the energetic climate that generates favorable business results. Even in the bleakest of economic situations — especially then — a leader must find authentic and realistic optimism to drive a climate in which employees work together successfully.

Vistage speaker Carole J. Parker, Ph.D. is a licensed psychologist and a member of the California Psychological Association, the American Psychological Association and the Illinois Drug and Alcohol Abuse Association.

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