What Type of Pessimism Do Leaders Need & Nurture?

It’s hard not to hear the constant drumbeat of warnings about the economic pain that most businesses anticipate in 2023. I’ve seen countless stories about Silicon Valley companies laying off thousands of workers; these are the same corporate hotspots that used to lure eager workers with promises of onsite dog sitting, catered hot lunches, and zip slides to weekly wine tastings and flower arranging classes!

Leaders who balance optimism with clear-eyed “defensive pessimism” know when to be bold and when to be prudent. I’ve noticed that every single CEO I know or coach has told me about belt-tightening, pausing big projects, and declaring a moratorium on hiring in the last few months. They are also quick to ask me what I’m hearing from other CEOs in different industries and countries. These leaders aren’t content with just a few sources of knowledge to make decisions about their budgets and cash flow. They are constantly seeking guidance from trusted people because they don’t want to be rash, uninformed or naive when it comes to balancing necessary aggression with care when the global economy is shaky and the consumers are being fickle and unpredictable. 

What can we learn from this tendency of elite leaders when it comes to how we can conduct ourselves in optimal ways? The leaders who last never allow their enthusiasm about current business success to blind them to the fact that a rainy day will eventually come, and that they will have to shift course and reinvent their products and teams. Jeff Bezos, founder of Amazon, has always led with the mindset that other companies are trying to “out-Amazon” them, so remaining lean and hungry helps them to avoid “frupidity” and stagnation

Some of the biggest implosions in the corporate world have come when leaders have ignored important sales data, board advice and clear economic warning signs so that they could stubbornly follow their own “gut instinct” – something I call “stupid grit.” For example, Fuhu Electronics was a high-flying company that was once Inc. Magazine’s fastest-growing U.S. company for two years in a row before it imploded into bankruptcy and was bought by Mattel. The founders refused to set goals, look at financials or change marketing strategies even when tablet sales slowed and competitors were beating them at their own game.

Everyone needs to change course at times and stop spending money you don’t have, or diverge from a course of action that no longer fits your life. Where will you look for the guidance that will assist you, and which information will you pay attention to?

Here are some questions to help you cultivate “defensive pessimism”:

  • Who has consistently had your back in life and been honest with you, even when you didn’t like what they had to say? Do you need to get his/her perspective on something right now?
  • What is the most important information you need in order to keep going or pull the plug on something that is bothering you, and how can you get that knowledge?
  • If you change nothing in your life right now, what is the most likely outcome of your current situation?
  • Compare two times when you didn’t listen to people who warned you about something, and two times when you did. What did you learn from those interactions and how might they apply to your life now?
Caroline Adams Miller

Caroline Adams Miller, MAPP is a pioneer with her ground-breaking work in the areas of goal-setting/accomplishment, grit, happiness and success. Caroline is the author of eight books, including Positively CarolineMy Name is Caroline,  Creating Your Best Life and Getting Grit. Live Happy Magazine named Creating Your Best Life one of the top ten goal-setting books ever published and Getting Grit one of the ten books that will change your life in 2017.  Her new book, Big Goals, is anticipated for release in the fall of 2024.  Caroline has been featured in BBC World NewsThe New York TimesThe Washington Post, USA Today, U.S. News &World Report, ABC, CBS, NBC, NPR and CNN.  She is a graduate of Harvard University and holds a Master’s degree in Applied Positive Psychology from the University of Pennsylvania.

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