Optimist versus Pessimist

Which is Better to Lead a Family Business

How to tell an optimist from a pessimist: The optimist says, “Please pass the cream” while the pessimist says, “Would you see if there is any milk in the pitcher?”

And of course we all know that the optimist sees the glass as half full while the pessimist sees it as half empty.

So what’s the best personality trait to run the family business?

John Davis is a senior lecturer in the Entrepreneurial Management unit at the Harvard Business School. In his recent article “Managing the Family Business: Are Optimists or Pessimists Better Leaders?” published by HBS in the May 20, 2014 issue of “Working Knowledge”, Davis states that while an optimist is generally better suited to run an entrepreneurial company, both have their own unique traits that can benefit a business. But they will do it in different ways, and with different goals. Studies show that without either optimism or pessimism, people don’t accomplish as much. These natural traits motivate people to take action. These are likely to be different actions, but at least action.

Let’s look first at pessimism. The pessimist seeks to find safe havens, establish clear advantages, and protect resources. If you plan for the worst and it doesn’t happen, you feel good. And if it should happen, you are ready. When the news is bad and likely to get worse, a pessimist is your best ally because pessimists thrive on fixing problems. Davis points out that “for this reason, pessimists can make good operational leaders.” But a pessimist in the corner office is less likely to foster a culture of growth, risk taking, and wealth creation.

On the other hand, optimists prefer to think about how they and others can advance and grow both the business and themselves. Optimists tend to have larger social networks, solve problems cooperatively, and are more likely to seek help in difficult situations.

So Davis concludes that it’s better to choose an optimist to lead growth activities in a family organization. But he adds this caveat. “If you choose an optimistic business leader, you should probably pair them with ‘reality testers’ ” to be sure the organization has thought through the negative impact of decisions that are being made. A TEC Group is an excellent source for this kind of support.

So a well run business needs the power of both traits. For example, when testing strategic plans, you should deploy defensive pessimism, imagining all the things that can go wrong in the future. But when an opportunity requires flexibility and hard work toward uncertain goals, put on your optimist hat.

Here’s the link to the complete article by John Davis. http://hbswk.hbs.edu/item/7364.html


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