What is the cost of optimism for the leader?

You are known for your positive attitude. Your stride is consistently long and sure. No setback discourages you. You accept each as an opportunity to embrace the next challenge with newfound wisdom. But should you consider the cost of optimism in this style?

As leader, you serve a variety of constituencies. Your team members look to you for your confident demeanor. When they watch you step into difficult situations, they are buoyed to do the same. Your executive team looks to you as the trusted lieutenant who can pursue the company mission with dogged determination. As the field marshal who will respond to the occasional urgent requirement to boost sales or manage a crisis. Your peer colleagues across your organization depend on you to understand your area of responsibility and appreciate theirs. You synthesize priorities through positive communication and compromise.

You stay positive. Dwelling on problems and worrying about outcomes doesn’t benefit you or any of your benefactors. But optimism that clouds judgment doesn’t benefit anyone either. Especially you.

Optimism, pessimism, and realism are lenses you must use when the situation calls for each. They are tools, not burdens or labels.

Optimism.

In my management career, I tended to see things optimistically. Glass half full, so to speak. That usually worked to keep the team moving forward toward a difficult objective, but it sometimes got me into trouble with my peer colleagues or with my senior leaders.

Here’s an example. On more than one occasion a complex contract negotiation took far longer than anyone anticipated. There was never a question that we would reach the finish line with the customer, only about when that would happen. My positive outlook encouraged my team members to work diligently on making the right steps with the customers and moving us forward. Our attitudes stayed bright. But when I provided status updates to my functional colleagues who would ultimately support the new business, I gave estimated launch dates that were unrealistic.

When the business didn’t roll out on time and I had to revise the dates, they strained under the misallocation of resources they had rallied to support launch. Likewise, my estimates to senior management often set revenue expectations that were too high and too soon. I ran into a credibility problem by not supporting an accurate forecast of the lift associated with the new customer. My cost of optimism was high. Not good.

Pessimism.

Business losses are inevitable. Hopefully they are widely outnumbered by wins, but managing the downside poorly can have a more dramatic effect if you’re not planning for losses that are looming in plain sight.

My example here involves a loss of a major customer. The customer was shifting strategy and providing clear signals that they intended to move away from our products. They were testing competitive products in their stores. They made a case to franchisees that industry trends were on the move and they needed to move with them. Little by little, communication with the customer decreased. Despite these clear signs of risk, I kept my positive mindset and tried to sail through the headwind and turn the business around. Ultimately, the predictable happened. We lost millions and got stuck with tons of proprietary product.

My inability to see the disaster coming, and to plan for it, created more problems for me and damaged my credibility. Pessimism was the appropriate lens in this situation. Had I looked through it the fallout could have been minimized.

Realism.

Salespeople are persuaders. We look for people who might be able to say yes to making a purchase. Once we find that person, we do our needs discovery and try to match our products for the perfect fit. Then we wait for the commission check.

Sometimes though, we can’t see the obvious obstacles that prevent us from closing the sale. Perhaps there is no budget for the purchase. Maybe there is a contract in place with another supplier that cannot be broken. We might not actually be talking to the person authorized to make a buying decision. When I was in the truck business, I agonized over how to start the right selling conversation with the right person. Then I spent time shadowing a seasoned salesman. He said to me, “Jim, it isn’t complicated. Ask the gatekeeper who buys the trucks. Then talk to that person. Ask them what they have and what they need and what their budget is. Just ask the right questions to the right person.”

Salespeople tend to spin their wheels on unproductive activity hoping a sale will occur. Just keep it real. Coach your salesperson to get to the right person and have efficient conversations that point directly to a purchase decision in the fewest possible steps. Then be honest with your colleagues and senior leaders about the nature of those sales and when they are likely to occur. Not when you hope they’ll occur.

There are plenty of situations you’ll encounter as leader that call for optimism, pessimism, or realism. The cost of optimism, pessimism, or even realism, occurs when you lean on any too heavily. Don’t rely on any one lens for all situations. Don’t fall into the trap of being labeled a chronic optimist or pessimist by others. Keep each lens clear so you can see through them and make the proper call based on what is presented to you.

Build your leadership brand by applying the proper lens and providing your constituents with the perspective they need.

The perspective only you can provide from your position.

Lead well.

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