When I’m assessing a leader’s potential and his or her company, the first thing I look for is what we call a challenge function. In other words, I find out how frequently they hear the word “no” from their team and what they do about it when it comes.
As leaders, we want to make the best decisions for our company. Ask any admired leader about the key to their ongoing success, and in the top two or three points, they will talk about their ability to make great decisions.
When we hear that or when we read about it in a blog or magazine article, we mistakenly believe that the key to becoming a great leader is to make all the right decisions. While it may be true that great leaders make great decisions, the truth is that they build systems and structures and surround themselves with the right people to ensure the quality of those decisions.
And when it comes to those people, systems, and structures, one of the most profound qualities is what I call critical optimism. I love critical optimism, and you should too.
Let me explain.
Critical optimism is the incredibly productive intersection of optimism and realism. It is an unwavering belief that we are on our way to a better future coupled with a deep skepticism that we are on the right track to get there. It believes the future will be better not because we are doing everything right today but because we will continue to find a better way together.
Here’s why critical optimism is so important: it ties together optimism and realism and forces them to remain in tension. That’s also why it is so rare.
We are naturally inclined to be “the cup half full or cup half empty” people. Part of that is nature, but the other part is that we were taught that optimism and realism are mutually exclusive. This allows us to neatly place people in clearly labeled boxes optimist or realist (or, depending on who you ask, pessimist).
This causes a lot of problems in business.
Optimists gravitate toward the extreme. They see opportunity. They only see what can be. They want all sunshine and roses. And they look down on their downer co-workers, the realists. If you say no, you are an obstacle to be overcome, a problem to be pushed aside.
Before any stones are thrown, we should note that the realists aren’t any better. They see problems. They see only what is (or should be). They want the facts and nothing but the facts. And they look down on their dreamer co-workers, the optimists. If you have an idea, it’s a threat, and they are quick to poke holes in it and say your idea can’t be done.
But there’s more going on here. We identify with our level of optimism or realism. We make it a part of who we are. So when an optimist brings an idea to a realist, it’s a disaster. The realist says it as a threat to the status quo and their very identity.
“If that idea was so good, why didn’t we choose it in the first place?”
“If it isn’t broken, don’t fix it.”
“There’s no need to re-invent the wheel.”
This resistance happens because the realist sees it as a threat to their intelligence. They were happy with what was. If they admit there is something better, that would mean they were wrong. If they try something new and it fails, they will be worse off than they are already. If we are going to get rid of this, why did we ever do it in the first place?
And this goes both ways. For the dreamer, if they don’t like his idea, they must not like him. If this is as good as it gets, then he’s going to suffocate. If there’s no room for “new,” then there is no reason to be.
However, somewhere between these equal but opposite fallacies lies an uncomfortable but powerful truth, and that is critical optimism.
For optimists, this means recognizing an idea is nothing if it can’t be put into action. Yes, we are heading for a better future, but we will only get there by saying yes to those ideas that move us toward that future.
For realists, this means recognizing that anything that isn’t growing is dying. Life requires change, and change involves risk.
By embracing critical optimism, both groups move toward each other. They better understand each other. And they work better together. They can put their identity and predispositions aside to explore a route to a better tomorrow, which is the fastest way to grow and progress.
What does this mean for you as a leader?
First, you need to ask yourself which way you lean on the optimism-realism spectrum. Then you need to examine how that bias is affecting your leadership.
If you are an optimist, ask yourself these questions:
- What would really happen if I never heard a “no” and every new idea you shared was accepted?
- How do I handle resistance to a new idea?
- How much stamina do I have for working an idea through to reality?
- How well do I embrace the value brought by realists?
- In what ways do I alienate realists?
If you are a realist, ask yourself these questions:
- What would really happen if I never had to change and could shoot down every new idea (or delay it until the “perfect time”)?
- How do I handle pressure to bring change?
- How much flexibility do I have for trying to make an idea work rather than trying to make it go away?
- How well do I embrace the value brought by optimists?
- In what ways do I alienate optimists?
Assess your culture
Next, you need to assess your company culture. Company cultures can crush critical optimism. New startup cultures tend to embrace change, value agility, and demand optimism. Mature company cultures tend to squelch creativity, emphasize predictability, and demand efficiency. In either case, they cut off half of the equation. To bake a great cookie, you need both sugar and salt (though I’m more of a cookie dough guy myself, the principle is the same).
Here are a few questions you can ask to assess your culture:
- Do we have a balance of both optimism and realism within our leadership team?
- Who do we celebrate more, optimists, or realists?
- Do we encourage challenge, conflict, and debate from various vantage points?
- Do our values, people, or policies alienate optimists or realists?
- What mechanisms, tools, or processes do we use to combine optimism AND realism?
- Do we hire people who are skilled at using critical optimism?
- Do we train optimists to think and act critically and realists to think and act flexibly?
In the cases of both optimism or realism, too much of a good thing is most certainly a bad thing. To run a company at its peak productivity for the long haul, we need both optimism and realism. However, to have both requires us to manage the inherent tension between the two. We need to celebrate ideas and breakthroughs as well as consistency and quality. And the best way to do it is to encourage everyone to engage in critical optimism.
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