Are you an optimist or a pessimist?
Most of us have some preconceived notion of ourselves in this capacity.
We've observed our own past behavior. We have at least some awareness of how others perceive us.
We can probably even put our finger on exactly what it was that made us this way—maybe the influence of a parent or maybe just a reaction to the hand that life dealt us.
But is our perception accurate? Or should we be thinking about this another way?
I tend to think of myself as an optimist. But if I examine my actual behavior—my thoughts, my words, my actions—it's clear that they are not always consistent with this vague perception.
In fact, it seems clear that defining ourselves as optimists or pessimists may be a flawed idea. It's not dissimilar from defining ourselves as physically fit or not. Depending on the week or even the day the answer may change.
In other words, our optimism or pessimism is a moving target, not a constant. And rather than being a fixed personality trait, it's something that is only proven through action. Like I've discussed in the past, despite the identities that we believe we personify, we're actually only good spouses or parents or employees if our actions prove this day in and day out. Without proof, this vague idea we have of ourselves as optimists or pessimists is really just that—a vague idea.
That's good and bad news. The bad news is that even those of us who are more naturally inclined to be optimistic can go down dark paths if we let our thoughts and behavior go unchecked. But it's also good news because those who are naturally more inclined to be pessimistic are not destined to a life of misery. They can take real, quantifiable action to improve their outlook on life.
But I'm getting ahead of myself.
Is it right to automatically assume that everyone should aspire to be an optimist?
That's a good question. In fact, for much of human history, being a pessimist has worked out okay. If you were the Debbie Downer who worried that there might be a lion in the bush on the pre-historic African Serengeti, you probably were also the one who survived. It's called natural selection and some of our more optimistically minded ancestors likely selected themselves right out of the gene pool with their overly sunny dispositions.
So pessimism, to make a broad generalization, has historically been the safer route. That's understandable because caution was probably a valuable trait to have in the tribe back in pre-historic days. Should we form a new relationship with that competing tribe? Should we cross that body of water? Should we climb that mountain? Well... maybe not. Seems risky.
So you see why pessimists survived. Today, there are still benefits to pessimism. In financial markets, fixed income or credit investors are known as being natural pessimists. That makes sense in their role. When you own a bond, you are effectively lending money and earning an interest rate. The best-case scenario is that you get your money back plus some interest. The worst case is that you lose all of your money. They call that an asymmetric risk/return profile—you've got way more to lose than you do to gain. So guess what? Those bond investors are going to be pessimistic as heck in trying to figure out everything that could possibly go wrong and thus cause them to lose money. And that's smart because it's a proven strategy that has worked time and time again.
And it's not just in fixed income investing where it pays to be cautious. Personally, I want the cyber-security experts at my company to be some serious killjoys. The more they can dream up what dastardly hacker attack might come next, the more they can be prepared. The same goes for fields like insurance and even preventative medicine. Let's protect against the downside—and lower our risk.
But, my God, pessimism is exhausting. Despite what I said before about pessimism and survival, one can argue that optimism might be even more important to surviving—and thriving. Simply stated, the human spirit requires optimism. We have a deep, innate need to feel that things will get better. In many ways, and in many parts of our lives, it's the direction of travel that matters more than where we are today. If we believe that things will get better—in our careers, in our fitness, in our relationships—that alone is often enough to keep us going.
Of course, optimism has a bit of a PR problem. Optimists can be seen as naive or pollyannaish. Many are fearful of being seen as overly optimistic, especially in a professional setting. It is much easier to be the critic than it is to have the vision. It is safer to question new initiatives than it is to champion them. There is less career risk in sitting back and observing than there is in sticking your neck out.
But progress in any capacity requires optimism. The greatest leaders—in business, politics, and sports—almost always tend to be optimists. Why? Because they must have a vision—a vision of how things can and will get better. Not only must they be able to see this vision themselves, but they need to convince others to come along with them on the journey.
This manifests itself in many places—from world-leading CEOs to charismatic politicians to inspirational coaches—but the message is the same:
We can do this very hard thing. Everyone doubts us. But we can see the vision. They cannot. Are you with me?
Even the sometimes stodgy world of finance has a place for optimists. In the way that fixed income investors are paid to see the glass as half empty, equity (or stock) investors are rewarded for their optimism. They are paid to buy into the right story (or vision)—this company can launch a new product, that one can become an industry-leader, and that other one might be able to change the world. Do you believe?
And if equity investors are optimists, venture capital investors are whatever optimists on steroids are (for some reason, I'm picturing Arnold Schwarzenegger ). This company is going to create a brand new industry that we can’t even imagine right now. Do you believe?
So both optimism and pessimism have their place, in the world of finance and in every other part of our lives.
But this idea that we can define ourselves concretely as either optimists or pessimists may be giving too much credit to our genes and our past life experiences. It's not the right way to frame it.
Really it's more of a choice. How am I going to react to this situation or this news? Am I willing to let events control me or am I courageous enough to decide my own thoughts and actions?
And while optimists will likely always be perceived by some as naive, the reality is that choosing to be optimistic is anything but. In fact, it's exactly the opposite.
It is assessing every situation with clear eyes—and then deciding to see the positive within it. Deciding to see the vision of where things can go.
Sometimes it's hard. In fact, sometimes it's impossible—and we can't do it. That's understandable. We all have situations in our lives where there seemingly is no good side.
But more often, we do have a choice—much more of a choice than we commonly acknowledge—to see the silver lining or the good that will ultimately come out of a challenging situation.
And we should remember that. Especially when things look most bleak.
So I ask you again: Are you an optimist or a pessimist?
That’s it for me. I hope you have a great week. — Greg
Photo credit: Nick Fewings @ Unsplash.com
Listen, if I'm going to make a Debbie Downer reference in an article, you can be damn sure that I am going to give you a Debbie Downer clip to watch, so here you go. I think my favorite part of this clip is that no one can keep it together—at all. Enjoy.