Optimism and Realism Paper_Jan 2009

Realistic Optimism for Individuals and Organizations

C. W. Von Bergen

Southeastern Oklahoma State University

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Abstract

That Westerners value positive and optimistic outlooks is supported by a robust literature indicating that Americans are excessively and unrealistically optimistic who tend to see their own future as rosier than that of the average person. Such optimism places priority on feeling good and in its various manifestations is associated with numerous well-documented benefits for individuals and organizations. Optimism, however, sometimes comes with a cost—the denial of reality. This has led some to believe that optimism and realism are in conflict. This paper suggests, however, that the two values can peacefully co-exist and that for maximal effectiveness slight to moderate levels of optimism based on realistic considerations are most adaptive. The

Stockdale Paradox was presented as an example of this duality and optimistic realism was offered as a mechanism that provides the benefits of both optimism and realism. Approaches to obtaining greater reality in an organizational context while curbing optimistic biases are discussed.

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We are going to a different world,” said Candide, “and I expect it is the one where all goes well . . . . Everything will turn out right. It is undoubtedly the new world that is the best of all possible universes.

—Voltaire, 1947/1759, p. 48

In classical times news would be carried by fast runners, most often sent out in war situations to report victory or defeat, or to request reinforcements. If the news was not good, and the receivers chose to vent their anger, these messengers would often meet an untimely and violent death—such was the importance of positive and optimistic information. This value continued in Candide as the colorful protagonist of Voltaire’s (1947/1759) novel displayed a persistent, almost childlike optimism about the future. Regardless of the adversity or disaster that confronted him, Candide continued to believe that the future would be bright (see excerpt above). Indeed, the term Panglossian, meaning naively or foolishly optimistic, was taken from the sanguine tutor, Dr. Pangloss, in Voltaire’s Candide .

More recently, Matlin and Stang (1978) surveyed hundreds of studies and found that language, memory, and thought are selectively positive. For example, people use more positive words than negative words, whether speaking or writing. Most people evaluate themselves positively, and in particular, more optimistically than they evaluate others. The optimism bandwagon is evident today as Americans hold strikingly high expectations that President Barak

Obama will be able to solve problems associated with a poor economy, a wrecked financial system, wars on two fronts, global warming, energy and education reform, and health care restructuring (to name a few; Robinson, 2009). It would appear that the emphasis on being positive has a long history and the future of optimism appears rosy indeed.

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Conversely, writers as diverse as Sophocles and Nietzsche (Peterson, 2000) argued that optimism prolongs human suffering and that it is better to face the hard facts of reality. More generally we are told, optimism in the form of wishful thinking can distract people from making concrete plans about how to attain goals (Oettingen, 1996). This negative view of positive thinking lies at the heart of Freud’s influential writings on the subject. In

The Future of an

Illusion , Freud (1928) decided that optimism was widespread but illusory. According to Freud, optimism helps make civilization possible, particularly when institutionalized in the form of religious beliefs about an afterlife (see also Tiger, 1979). However, optimism comes with a cost if it is too unrealistic—the denial of reality, which, for most mental health professionals is the epitome of good mental health (Jahoda, 1958).

Such contradictory views have led some researchers to assert that optimism’s benefits may not be absolute and to question whether it is better to be realistic or optimistic (e.g.,

Schneider, 2001). The current paper explores this question by reviewing the management and psychological literature on the advantages and disadvantages of optimism followed by a brief discussion of reality. An attempt to reconcile these two positions is presented using the Stockdale

Paradox, a specific example of realistic optimism, which incorporates facing the reality of one’s current situation while maintaining an optimistic view towards the future. Because optimism appears to be the ambient state for most people at most times, the paper concludes with a discussion of several ways organizations can combat excessive optimism and provide more realistic perspectives. While this discussion focuses on optimism, it should be noted that other future-oriented feeling states such as hope and faith have some overlap with the concept of optimism but due to space limitations a discussion of these concepts will be will not be presented here.

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OPTIMISM

Optimism as beneficial

There is perhaps no virtue more desirable in Western civilization than being positive and optimistic which is defined in this paper as a generalized expectancy that good as opposed to bad outcomes will generally occur across important life domains (Scheier & Carver, 1985, 1992).

Philosophers, theologians, teachers, counseling and sports psychologists, management theorists, and popular self-help gurus have placed a premium on being positive as a means of achieving happiness, satisfaction, productivity, and personal growth and effectiveness (Judge, Erez, &

Bono, 1998; Neck & Manz, 2007). The American way of life is replete with examples emphasizing optimism. The French philosopher Alexis de Tocqueville visited the United States in 1831 to determine what made the country so vibrant and successful and noted America’s optimism and self-confidence. Perhaps such an emphasis on being positive should come as no surprise since it is a cultural product of a country that placed the right to happiness in its 1776

Declaration of Independence.

The cultural tradition of optimism and self-confidence still fuels the American dream in the 21 st

century (Handy, 2001). Many parents raise their children to see the glass as half full and to recognize that every cloud has a silver lining. Americans admire optimism in their leaders as indicated below (Harari, 2003; Luntz, 2007, pp. 220-221):

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“A pessimist is one who makes difficulties of his opportunities and an optimist is one who makes opportunities of his difficulties.” (Harry Truman)

 “Pessimism never won any battle.” (Dwight Eisenhower)

 “The only limit to our realization of tomorrow will be our doubts of today. Let us move forward with strong and active faith.” (Franklin Roosevelt)

 “Perpetual optimism is a force multiplier.” (Colin Powell)

Magazines, television, and books likewise often feature stories illustrating how resolve can turn poverty into riches. Everywhere from Eleanor Porter’s Pollyanna (“The glad game”;

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Porter, 1913) to Watty Piper’s The Little Engine That Could (“I think I can, I think I can ...”;

Piper, 1930) to Dale Carnegie’s How to Win Friends and Influence People

(“believe that you will succeed, and you will”; Carnegie, 1937) to Norman Vincent Peale’s

The Power of Positive

Thinking

(“the man who assumes success tends already to have success”; Peale, 1952) to Rhonda

Byrne’s

The Secret (“think positive thoughts because you become or attract what you think about the most”; Byrne, 2006) people are surrounded by supporters of the value of a positive and optimistic outlook. Even U.S. professional scholarship in psychology and management has literatures that specifically address optimism and positivity, positive psychology (Seligman,

1999; Seligman & Pawelski, 2003) and appreciative inquiry (Cooperrider & Sekerka, 2003;

Cooperrider & Whitney, 1999), respectively. Nicely summing up this fascination with optimism was Bouchier’s (2006) observation that America is a highly optimistic nation where “Somewhere over the rainbow the sun will come out tomorrow, so we can put on a happy face and let the sunshine in while we dream the impossible dream.”

Like Voltaire’s fictional Candide, Americans view the future through rose-colored glasses, believing that all will be well, or at least better for them than for others. Three decades of theory and research on human judgment suggest that, rather than predicting that the future holds an equal mix of good and bad, people are overwhelmingly biased toward optimism

(Carroll, Sweeny, & Shepperd, 2006). The bias in predictions toward optimism appears in many forms including dispositional optimism (Carver & Scheier, 1981), whereby people show an enduring tendency to expect the best, optimistic bias , in which people believe that they are more

7 likely to experience positive events and less likely to experience negative events than are their peers (Weinstein, 1980, 1983), and unrealistic optimism , involving personal predictions that exceed the predictions made by objective indicators (Buehler, Griffin, & MacDonald, 1997).

It is noteworthy that several hundred studies have shown that people’s predictions tend to be excessively and unrealistically optimistic (for reviews, see Armor & Taylor, 1998, 2002;

Buehler, Griffin, & Ross, 2002; Helweg-Larsen & Shepperd, 2001). To be sure, some degree of error in personal prediction is to be expected but as Yogi Berra, hall of fame baseball player who regularly mangles the English language, famously, if mythically, might say, “It’s tough to make predictions, especially about the future” (see Armor & Sackett, 2006, p. 583). However, people’s predictions appear to be prone not only to error

—random deviations and distortions that would be expected to balance out over the long run—but to a consistent and pervasive bias . Examples of unrealistically optimistic personal predictions are not difficult to find, whether in real life or in the relatively artificial confines of the research laboratory. Students, for example, tend to overestimate how well they will do on exams (Shepperd, Ouellette, & Fernandez, 1996) and to chronically underestimate how long it will take for them to complete their assignments (Buehler,

Griffin, & Ross, 1994). Undergraduate and professional (Master of Business Administration) students tend to overestimate their prospects for success on the job market (Hoch, 1985;

Shepperd et al., 1996), and even professional financial analysts tend to overestimate corporate earnings (Calderon, 1993; Lim, 2001). People are likely to believe that they are better than others in areas such as leadership, social skills, and other desirable characteristics (Alicke, 1985;

Brown, 1986). Thus, much research has shown that people of all ages and backgrounds tend to overestimate how likely they are to experience a wide variety of positive outcomes, and to underestimate how likely they are to experience an even wider variety of negative outcomes

8 relative to other people (e.g., Weinstein, 1980, 1987; Perloff & Fetzer, 1986; Quadrel, Fischhoff,

& Davis, 1993; Heine & Lehman, 1995; Helweg-Larsen & Shepperd, 2001).

The pervasive optimism in personal predictions is more than just an interesting judgment bias. Overwhelming evidence shows that an optimistic outlook in its various manifestations provides numerous benefits (e.g., Aspinwall & Taylor, 1992; Carver & Scheier, 1981; Scheier &

Carver, 1985, 1993; Taylor, Kemeny, Reed, Bower, & Gruenewald, 2000). It is linked to greater persistence toward goals and to better coping and adjustment (Sweeny, Carroll, & Shepperd,

2006). Optimism facilitates health benefits including reduced levels of postpartum depression, better recovery from alcoholism, and bolstered cardiovascular and immune-system functioning

(see Shepperd, Carroll, & Sweeny, 2008, for a review). Furthermore, at least in Western cultures

(Endo, 2007, presents data from East Asian cultures suggesting that an optimistic bias is not a universal human dimension), optimism carries social benefits in that optimistic people are better liked than pessimistic people (Helweg-Larsen, Sadeghian, & Webb, 2002). There are even some performance benefits to overestimating one’s abilities. These seem to fall in the category of selffulfilling prophesies. The confident performer often does better than the doubtful, nervous, or insecure one. Feather’s work (1966, 1968) has amply documented how performers’ favorable expectations can improve performance through self-fulfilling prophecy mechanisms, and many subsequent studies have supported these results (e.g., Baumeister, Hamilton, & Tice, 1985).

In a business context Seligman (1998) provided evidence of the impact of measured optimism on desirable workplace outcomes, reporting salespersons’ high performance and retention at the Metropolitan Life Insurance Company. Likewise, Luthans and his collaborators

(Luthans, Avolio, Avey, & Norman, 2007; Luthans & Youssef, 2007) found that their concept of psychological capital, key components of which include confidence and optimism, is positively

9 related to performance outcomes in the workplace, lower employee absenteeism, less employee cynicism and intentions to quit, and higher job satisfaction, commitment, and organizational citizenship behaviors.

Organizations, too, often exert political pressures to emphasize the positive and downplay the negative (Weber, 2008). The bearers of bad news tend to become pariahs, shunned and ignored by other employees and brushed off. Such Cassandras are unpopular, make others uncomfortable, and are seldom welcome. It is annoying to be warned of imminent or future difficulties. People dislike and usually resent being told of impending peril or catastrophe (The

Contemporary Review, 1874). Moreover, “negative thinkers” are persuaded to think of themselves as odd or ill because of their reluctance or failure to look on the bright side—to give an optimistic gloss to issues (Fineman, 2006). Recall former U.S. Vice President Spiro Agnew’s alliterative attacks on the “nattering nabobs of negativism.”

Pessimists are singled out as being especially objectionable because pessimism is enervating and deflating and frequently interpreted as disloyalty (Lovallo & Kahneman, 2003).

Leaders, consistent with America’s positivity zeitgeist , are told to be enabling, involving, empowering, nurturing, positive, and optimistic. Those who are not especially encouraging are told such things as “The message is correct, but it is too pessimistic” or “You need to look for a way to tell the story more optimistically” or “You have to give those working on _______ some hope of success.”

In summary, optimism, it seems is axiomatic to a healthy work environment and prosperous life and that an upbeat outlook is correlated with positive outcomes across a wide variety of domains. Being optimistic is highly encouraged because “positive attitudes lead to

positive actions” (Grant, 1998, p. 81) and Americans tend to be greatly occupied with what they

10 can and cannot accomplish in their everyday lives (Peterson, 2000).

Optimism as problematic

This prescription, although understandable, is not unequivocally supported by all data.

Indeed, as often happens, by the time knowledge becomes conventional, it is often wrong as well

(Katz, 2003). Although the benefits of optimism are well-documented, it often times leads to unrealistic and irrational assessments and behavior which has led some researchers and practitioners to qualify their support for being positive, confident, and optimistic and to focus on demonstrating the dangers of optimism. Sometimes optimism can represent a form of selfdeception in which individuals convince themselves that things are different from what available information would suggest (Greenwald, 1997; Mele, 1997; Paulhus & John, 1998). For example, in his studies on optimism, Weinstein (1980, 1984; Weinstein & Klein, 1996) has provided evidence of the harmful effects of optimistic biases in risk perception related to a host of health hazards. Weinstein indicated that overly optimistic views can cause high levels of reality distortion and can lead people to engage in risky behavior (e.g., not wearing seat belts, condoms). Similarly, there is evidence that judgments based on inflated views of self can lead to self-defeating processes. Feather (1961, 1962), for instance, showed that optimistically high expectations for success can cause people to persist fruitlessly at unsolvable tasks.

In related research, Kunda (Klein & Kunda, 1992; Kunda, 1990) has provided several examples of defensively motivated reasoning that helps maintain a positive self-view, but is likely to have harmful long-term consequences. Cigarette smokers, for instance, frequently avoid thinking about or trying to quit smoking by adopting self-serving biases that discount their personal susceptibility to the risks of smoking or by boosting their self-view through a variety of

11 personal affirmations (Gibbons, Eggleston, & Benthin, 1997; Steele, 1988). In a similar vein,

Robins and John (1997; John & Robins, 1994) have found that optimistic illusions of performance are more likely to be associated with narcissism than mental health. Hubris that incorporates exaggerated pride, arrogance, and self-confidence resulting from such selfabsorption is especially pernicious (Hayward & Hambrick, 1997; Kets de Vries, 1990).

Individuals possessed with hubris have an overbearing confidence in their abilities to make events conform to their will in spite of contrary external evidence. They believe that whatever external problems might arise will be easily and willfully overcome (Kets de Vries, 1990). Kroll,

Toombs, and Wright (2000) noted how hubris has been associated with leadership failure and specifically review Napoleon’s Russian fiasco of 1812, in which he lost his army and empire.

Webber (2008) likewise noted that military history is rife with examples of leaders who overestimated their likelihood of success, with disastrous results. For instance, Hitler attacked

Russia, ignoring his generals’ cautionary advice, and Robert E. Lee came to believe in his troops’ invincibility and chose to storm well-positioned Union forces at Gettysburg against the advice of General James Longstreet. The fruitless attempt by the Allies to dislodge the Turks from the Gallipoli Peninsula in World War I was the product of so much misguided Allied thinking that one wonders how it could possibly have been initiated. And in the Iraq misadventure, some decision-makers ignored postwar planning out of an optimistic belief that

Iraqis would welcome American forces—even though it is difficult to come up with an example of an occupying army ever being well-received.

An overly optimistic view leads to overconfidence in decision making and is known to negatively affect task satisfaction (McGraw, Mellers, & Ritov , 2004) and performance (Sieck &

Arkes, 2005). One type of decision making error is groupthink which is the tendency for

12 members of highly cohesive groups to minimize conflict and reach consensus without critically testing, analyzing, or evaluating ideas (Janis, 1982). The problem is that members of such groups may exhibit illusions of invulnerability creating a sense of invincibility and excessive optimism that encourages extreme risk taking that may lead to tragedies (e.g., Bay of Pigs failure,

Challenger disaster, U.S. invasion of North Korea).

Optimism in the form of wishful thinking can also distract people from making concrete plans about how to attain goals (Oettingen, 1996). Unrelenting optimism precludes the caution, sobriety, and conservation of resources that accompany sadness as a normal and presumably adaptive response to disappointment and setback (Nesse & Williams, 1996). In addition, overconfident individuals may unnecessarily risk resources based on inflated expectations of future performance (e.g., Campbell, Goodie, & Foster , 2004). Moreover, initial overconfidence can lead to feelings of failure when the person does not perform as he or she expected leading to diminished future effort and self-efficacy (Bandura & Schunk, 1981; Stone, 1994).

Senior executives tend, for instance, to stress the importance of stretch goals for their business units. This can have the salutary effect of increasing motivation, but it can also lead unit managers to further skew their forecasts toward unrealistically auspicious outcomes (Lovallo &

Kahneman, 2003) which often lead to further problems. Warren Buffet, one of the world’s most successful investors, cautioned against such “cock-eyed optimism” (2001, p. 5) and warned that lofty predictions not only spread unwarranted optimism but also corrode CEO behavior:

“... I have observed many instances in which CEOs engaged in uneconomic operating maneuvers so that they could meet earnings targets they had announced. Worse still, after exhausting all that operating acrobatics would do, they sometimes played a wide variety of accounting games to ‘make the numbers.’ These accounting shenanigans have a way of snowballing: Once a company moves earnings from one period to another, operating shortfalls that occur thereafter require it to engage in further accounting maneuvers that must

13 be even more ‘heroic.’ These can turn fudging into fraud” (Buffet, 2001, p. 6).

Similarly, when gloomy opinions are suppressed, while optimistic views are rewarded, an organization’s ability to think critically is undermined. The optimistic biases of individual employees become mutually reinforcing, and unrealistic views of the future are validated by the group (Lovallo & Kahneman, 2003). In its grip, managers make decisions based on delusional optimism rather than on a rational weighting of gains, losses, and probabilities (Lovallo &

Kahneman, 2003). They overestimate benefits and underestimate costs. They spin scenarios of achievement while overlooking the potential for mistakes and miscalculations.

This excessive confidence is particularly true of organizations that have experienced success. But success often breeds failure, especially in organizations with strong cultures (Miller,

1994). This is because organizations that have tremendous successes begin to believe in their own invulnerability. They often become arrogant and lose their competitive edge. As Leslie

Wexner, CEO, of The Limited, Inc. indicated: “Success doesn’t beget success. Success begets failure because the more that you know a thing works, the less likely you are to think that it won’t work. When you’ve had a long string of victories, it’s harder to foresee your own vulnerabilities” (Davis, l994, p. 161). In short, success breeds a sense of self-efficacy, which then causes a perpetuation of the status quo . Although growing self-efficacy can undergird valuable persistence and necessary commitment, its darker side becomes apparent in reactions of hidebound inertia and unwarranted escalation to a course of action (Whyte, Saks, & Hook,

1997).

Optimistically biased predictions are costly in terms of money, jobs, prestige, or even lives (Sanna, Parks, Chang, & Carter, 2005). Large-scale planning debacles abound, supplying poignant public illustrations of overly optimistic plans gone awry (Flyvberg, Holme, & Soren,

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2002; Hall, 1980; Schnaars, 1989). So frequent is this phenomenon that it has been given a name—the planning fallacy, an error in underestimating the time it will take to finish tasks

(Buehler, Griffin, & Ross, 1994). For example, the Sydney Opera House, begun in 1957, was originally estimated to be completed in 1963, but a scaled-down version actually opened in

1973—a decade later. The Eurofighter aircraft, conceived jointly by Britain, Germany, Italy, and

Spain, was originally planned to be operational in 1997, but the first aircraft were not delivered until 2003 and Boston’s Central Artery/Tunnel project was originally estimated to be finished in

1999, but was not fully completed until 2007.

Excessive optimism has also been implicated for the well documented phenomenon called the “winner’s curse” (Hendricks, Porter, & Tan, 2008), a phenomenon akin to a Pyrrhic victory in which individuals bid above an item’s (e.g., an acquisition or merger) true value and thus are “cursed” by acquiring it (Lovallo, Viguerie, Uhlaner, & Horn, 2007). By exaggerating the likely benefits of a project and ignoring the potential pitfalls, executives lead their organizations into initiatives that are doomed to fall well short of expectations.

Finally, not only can optimism be bad, but its opposite, pessimism, can be good—at least for some people. The optimistic refrain of “Relax—it’ll work out” simply is not always appropriate for all people. P sychologist Julie Norem recognized this and has offered convincing evidence that, for many people, optimistic thinking is an ineffective strategy—and often an obstacle—for successfully coping with the anxieties and pressures of modern life. Drawing on her own research and many vivid case histories, Norem (2002; Norem & Cantor, 1986) provides evidence of the powerful benefits of “defensive pessimism,” which has helped many individuals to manage anxiety and perform their best work. Defensive pessimists tolerate negative emotions in order to get things done. Their tolerance is not passive wallowing in negative feelings; it

15 embodies confronting those feelings and rejecting the premise that feeling good should always be an individual’s most immediate aim. In fact, being able to tolerate negative feelings can be crucial to a wide variety of life situations: delaying gratification, learning from bad experiences, truly hearing what other people say, and correctly assessing circumstances, risks, and opportunities.

In summary optimism’s benefits are not unbounded and negativity has a role to play, both in society at large and in our own lives. Individuals must have the courage to endure pessimism when its perspective is valuable (Seligman, 1998). Interestingly, there is considerable research demonstrating that negative and pessimistic individuals have a better grasp of reality than do optimists (Peterson, 2000; Taylor, 1989; Taylor et al., 2000).

REALITY

Because of problematic scenarios associated with optimism indicated earlier, some researchers have noted the benefits of shifting from optimistic to more realistic appraisals

(Shepperd, Sweeny, & Carroll, 2006). Criteria for being realistic typically include objectivity and rationality, but defining these concepts is a topic of long-standing philosophical debate (e.g.,

Gigerenzer, 2000; Hollis & Lukes, 1982; James, 1907; Moser, 1990; Wittgenstein, 1969).

Generally, the former concept requires that information be represented as it actually is in the environment (e.g., Megill, 1994), and the latter concept requires logical consistency in the process of decision making (e.g., Baron, 1985). Thus, being realistic requires monitoring experience to ascertain what is occurring in the environment. “Roughly speaking, direct realism holds that at least some of our observation reports must concern the ‘external’ world, not sense data, experiences, inner representations, sense impressions, colored surfaces, or the way things look or appear” (Hacking, 2001, p. 256).

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What one believes or says about objective reality is not made true by an act of believing or saying. The “hardness” of reality is not softened by one’s preferences, however intense they may be. An individual may not want their roof to be leaking during a rainstorm, but if it is, it is, and they cannot wish nor will away that fact. What people want to be the case about a given matter and what is the case bear no necessary relationship to each other. What a person thinks about something or how he or she perceives it or how they talk about it are all independent of how it really is, the properties it actually has (Stetson & Conti, 2005). Realism, therefore, should not be dismissed as trivial.

In taking reality into account individuals better prepare themselves to adapt to the situation by directing thoughts and actions toward assessing and responding to changes in the local environment (Carroll et al., 2006). New information often prompts individuals to adjust their predictions to prepare for what lies ahead. As the moment of truth draws near, people often gain greater understanding of the circumstances that might influence their outcomes and, perhaps, a better a sense of what outcomes are realistic and what outcomes are not. Consider college students’ predictions about their starting salaries. College seniors in one study shifted their salary predictions in their first post-graduation job from optimism four months prior to graduation to realism two weeks prior to graduation. Sophomores and juniors, by contrast, showed no such shift in predictions (Shepperd et al., 1996). Undoubtedly, the seniors recalibrated their predictions in part due to gaining greater information about starting salaries either from their own interview experience or from the experiences of friends. Furthermore, as their graduation approached, the seniors may have felt growing pressure to explain their overly optimistic salary expectations to themselves and others, and they may have focused more on the difficulties of the application and interview process and less on the dream of making millions.

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Finally, the seniors may have interpreted increasing anxiety about the job market as evidence that their original expectations were too high.

Denial of reality it seems is the penalty for excessive optimism (Peterson, 2000; Seligman, 1998) but the movement toward reality is not necessarily easy as famous essayist and astute observer of the human condition George Orwell noted, “To see what is in front of one’s nose needs a constant struggle” (Orwell, 1946).

Organizations with a point of view based in realism have a keen eye for problems, and when they find them, they attack them with doggedness (Webber, 2008). Yet many companies frequently fail to recognize this realism because it is at odds with romanticized ideas our society and culture have about leadership. Nevertheless, the importance of facing reality, however, was espoused by former General Electric chairperson and management guru Jack Welch (Tichy &

Charan, 1989; Welch & Byrne, 2001) who demanded that his executives face reality and enshrined it as one of his seven management maxims. Facing reality was Welch’s most important rule because wishful thinking and selective perception influence judgment and affect decisions powerfully—and often negatively. Seeing the world as it is rather than as one wished it were was encouraged. In not facing reality Welch believed that false conclusions would prevail and that faulty judgments would follow and lead executives to take risks they would have avoided if they had had an accurate assessment. Other practitioners have likewise indicated an emphasis on facing reality (Keegan & West, 2008; Lovallo & Kahneman, 2003; Lovallo &

Sibony, 2006; Lovallo, Viguerie, Uhlaner, & Horn, 2007) as a counterweight to “delusions of success” and the tendency to believe that “all is well.” In summary, then, there are reasons for emphasizing reality in business and in life.

RECONCILING OPTIMISM AND REALISM

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Most views, whether in support of or in opposition to the value of optimism and reality seem to be based on the assumption that optimistic and realistic perspectives are mutually exclusive (Schneider, 2001). Perhaps, however, both optimistic biases and realistic assessments may actually complement each other. This seems to be the case in the Stockdale Paradox described by management scholar Jim Collins (2001).

Collins, in his phenomenally successful book, Good to Great (2002), observed that every good-to-great company faced significant adversity along the way to greatness. In every case, according to Collins, the management team responded with a powerful psychological duality. On the one hand they stoically accepted the brutal facts of reality while on the other hand they maintained an unwavering faith in the endgame, and a commitment to prevail as a great company despite the cruel facts. The path to greatness, then, started with the right mix of optimism and a willingness to confront the facts of reality. Such circumstances guard against the endless disappointments that optimism often creates. Confronting the adversity of the current reality enabled organizations to make realistic assessments of their existing state so as to allocate energies and reserves to better face each challenge as it came, thus positioning the enterprise for success.

Collins called this two-element state of affairs the Stockdale Paradox (see Figure 1) after

Admiral James Stockdale, one of the most highly decorated officers in the history of the United

States Navy, who survived eight years as a prisoner of war in Vietnam and was tortured over 20 times. In interviewing Stockdale for Good to Great Collins asked the Congressional Medal of

Honor recipient how he dealt with the atrocity of his imprisonment: “I never lost faith in the end of the story,” Stockdale said; “I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect,

I would not trade” (Collins, 2000, p. 83). Collins then asked Stockdale who were those who did

19 not survive their captivity. “Oh, that’s easy,” he said, “the optimists. They were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart” (Collins, 2002, p. 84). At that point Stockdale turned to Collins and said, “This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be” (Collins, 2000, p. 83; see Figure 1). Collins (2000) indicated that he carries a mental image of Stockdale admonishing the optimists: “We’re not getting out by

Christmas; deal with it” (p. 85)!

Figure 1. The duality of the Stockdale Paradox.

The Stockdale Paradox

Retain faith that you Confront the most brutal will prevail in the end, AND at the facts of your current regardless of the difficulties. same time reality, whatever they might be.

The Stockdale Paradox, then, seems to involve both being positive ( retaining faith that one will prevail) and at the same time, being realistic (confronting the most brutal facts of one’s current reality). Balancing the unwavering faith in the endgame in combination with a stoic acceptance of the brutal facts of current reality can serve to attenuate the dangers of excessive optimism and lead to survival. Survival was on the one hand about unswerving faith that one will

20 ultimately triumph while on the other hand it was about banishing all false hopes; one can never let their belief and faith cloud their encounter with reality.

The paradox is similar to famous psychotherapist and holocaust survivor Viktor Frankl’s experience in

Man’s Search for Meaning

(1959). He observed that the death rate in the concentration camps increased close to Christmas because many people who believed they would be spending it with their family died of disappointment.

He developed the concept of “... tragic optimism, that is, an optimism in the face of tragedy ...” (Frankl, 1959, p. 139). Different from positive illusions, tragic optimism refers to the capacity to hope in spite of and because of tragic experiences. Tragic optimism is predicated on the defiant human spirit, the belief that what cannot destroy a person makes them stronger. It has no use for wishful thinking or positive illusions and is based, in part, on acceptance that enables one to confront the reality of what cannot be changed.

The point both Collins and Frankl make is that it is maladaptive to have high optimism under certain circumstances. Blind optimists who think that everything will be fine if they just sit back and have positive thoughts and wait will be bitterly disappointed. At the same time, they should never lose hope that they will overcome adversity in the end, no matter what fate has presented.

THE STOCKDALE PARADOX AS AN EXAMPLE OF REALISTIC OPTIMISM

In addition to Stockdale’s anecdotal comments regarding the importance of both optimistic and realistic views some scholars have likewise argued that optimistic illusions can be beneficial, but only if they do not distort reality in ways that might be harmful. Epstein (1992) indicated that, “In many ambiguous real-life situations ... moderate self-overestimation is intrinsically self-rewarding and produces no unfortunate consequences. . . . However, this does

not necessarily mean that reality orientation is an unimportant component of mental health” (p.

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832). This has led proponents of the adaptiveness of optimistic biases to argue that such illusions are beneficial when they are in the slight to moderate range, but they decrease in usefulness as they move into extreme ranges (Baumeister, 1989; Snyder, 1989). Baumeister refers to this as the “optimal margin of illusion” which allows people to see themselves as slightly better than they really are, but does not typically lead to behaviors based on false assumptions because reality was ignored. In other words, mentally healthy people having optimal psychological functioning tend to distort reality in a slight to moderate optimistic fashion (Mezulis, Abramson,

Hyde & Hankin, 2004; Taylor & Brown, 1988) while accurate perceptions of reality are associated with mild depression, dysphoria, and other maladaptive patterns (depressive realism hypothesis; Ackerman & DeRubeis, 1991; Alloy & Abramson, 1979; Haaga & Beck, 1995; see

Colvin & Block, 1994, for a detailed critique of depressive realism). By seeing things as slightly better than they really are, individuals enjoy the affective benefits of illusions while avoiding the pragmatic, behavioral risks of acting on false assumptions. Substantial departures from this optimal range are not advantageous and are associated with risks and difficulties (see Figure 2).

Figure 2. An inverted-U relationship between adaptiveness and perceptions of reality.

22

Thus, based on personal observations and research data it appears that both optimism and realism are important and can be combined with the same experience. Accordingly, we use the term, realistic optimism as the tendency to maintain a positive outlook within the constraints of the available “measurable phenomena situated in the physical and social world” (DeGrandpre,

2000, p. 733).

In principle, realistic optimism can be expected to yield the positive outcomes of slight to moderate optimistic illusions (Folkman & Moskowitz, 2000; Peterson, 2000; Scheier & Carver,

1992; Taylor et al., 2000) without simultaneous exposure to the disadvantages of reality distortions that characterize highly optimistic individuals nor the perceptions and judgments of depressed people who are often more accurate in various situations than non-depressed, optimistic individuals. It does not include or imply expectations that things will improve on their own. Realistic optimism involves hoping for and working toward desired outcomes (the “I can do it” attitude) without having the expectation (the “it will happen” attitude) that particular

23 outcomes will occur, especially with little or no effort to bring them about. Realistic optimism requires that individuals (and groups) remain within the limits of reality to the extent that they remain aware of the objective facts of the situation, even as they choose to focus on positive implications of those facts.

Realistic optimism relies on regular reality checks to update assessments of progress, fine-tune one’s understanding of potential opportunities, refine causal models of situations, and re-evaluate planned next steps. This involves attention to both environmental and social feedback about whether beliefs fall outside the range of plausible possibilities. With this in mind, let us consider some organizational reality checks.

REALITY CHECKS TO HELP AVOID UNREALISTIC OPTIMISM

Among the most robust findings in cognitive psychology is the tendency for people to report that they are less likely than others to experience negative events and more likely than others to experience positive events. This bias tends to downplay the efficacy of reality. Our goal is not to eliminate optimism but, rather, to build a sense of realism into an organization’s culture.

And keep in mind that what works for an individual is not always successful on the level of a larger enterprise. While the elixir of optimism may help us get through the day, it may be toxic to corporations when taken in excess.

Accordingly, we have drawn from the work of both psychologists and management experts and have developed the following specific guidelines that could be used to counter optimistic biases in organizations and provide a greater balance between optimism and reality.

Companies can better avoid distortions and deceptions by reviewing the way they make decisions and embedding safeguards into their formal decision-making processes and corporate culture. It is essential to realize that these tools are just tools. Their effectiveness ultimately

24 depends on the quality of the resulting discussions, which cannot be effective unless the organization has a culture of reasonably open and objective debate.

Some measures to consider in tempering optimism and providing a greater balance between reality and optimism include the following:

1)

Don’t shoot the messenger —Some managers seem to be hopeless worrywarts, but remember former Intel CEO Andrew Grove’s warning that only the paranoid survive (Grove, 1999). It is better to be aware of a potential problem than not. Over time, managers can calibrate whether some managers or units are indeed canaries in the mineshaft and, conversely, whether managers who dismiss possible dangers do so for valid reasons—or do so out of inertia. Recall the words of 20th century Jewish scholar, Saul Lieberman (n. d.), who observed that the difference between a smart man and a wise one was that “A smart man can work his way out of a difficulty that the wise man will not get into in the first place.” The moral is to not kill messengers in organizations who may be cautioning against risky and overly optimistic initiatives.

2) Promote open inquiry— Because there is a frequent tendency for groups to be highly optimistic, leaders should encourage members to be skeptical of all solutions and to avoid reaching premature agreements. It sometimes helps to play the role of devil’s advocate by intentionally finding fault with a proposed solution (Schweiger, Sandberg, & Ragan, 1986).

Research has shown that when this is done, groups make higher-quality decisions (Schweiger,

Sandberg, & Rechner, 1989). In fact, some corporate executives use exercises in which conflict is intentionally generated just so the negative aspects of a decision can be identified before it is too late (Cosier & Schwenk, 1990).

This is not to say that leaders should be argumentative.

Rather, raising a nonthreatening question to force both sides of an issue can be very helpful in improving the quality of decisions.

3) Provide feedback, good and bad

—It would seem that through life experience people would

25 learn that occasionally they are not as competent as their overconfidence might suggest.

However, this is not the case. Some time ago Sullivan (1953) marveled at “the failure of learning which has left their capacity for fantastic, self-centered delusions so utterly unaffected by a lifelong history of educative events” (p. 80). One reason is that people seldom receive negative feedback about their skills and abilities from others in everyday life (Darley & Fazio, 1980;

Kruger & Dunning, 1999; Matlin & Stang, 1978). Even young children are familiar with the idea that “if you do not have something nice to say, don’t say anything at all.” Therefore, feedback, particularly negative feedback, should not be avoided.

Associated with this approach is a focus on past history. It appears to be a psychological truism that the best predictor of future performance is past behavior (Aarts, Verplanken, &

Knippenberg, 2006; Conner & Armitage, 1998). Thus, there should be an emphasis on determining what has been done in the past. Indeed, over 100 years ago Santayana (1905) noted that “those who cannot remember the past are condemned to repeat it” (p. 284). History is important but has been underappreciated in business (Parnell, Von Bergen, & Soper, 2005). For example, Henry Ford’s remark that “history is bunk” (Bohle, 1967, p. 195) has been quoted with widespread approval in business for more than 80 years. What is the performance history of someone who is proposing an initiative? What is the history of similar programs inside or outside the organization?

It is important to reflect on past decisions. A willingness to ask how things emerged—in effect, holding a conversation about conversations with key people—shows that the company can learn from its mistakes. Executives should track the expectations of individuals against actual outcomes in order to examine the processes (such as sales forecasts) that underlie strategic decisions. Companies should review these processes if forecasts and results differ

26 significantly. They can also provide feedback where necessary and show clearly that they remember forecasts, reward realistic optimism, and frown on excessive optimism.

Being realistic means being aware of the individual’s past performance. Consider a person who expects good things to happen. At first glance, this may seem like wishful thinking about events that are out of the person’s control. In some cases, that might be what it is. But for someone who has a consistent history of good experiences, it seems reasonable to expect that good experiences will continue, just as we all expect the sun to continue to rise every morning.

4) Show interest in the upside and downside

—Executives should be grilled on the risks inherent in their forecasts. Managers should display interest in bad or problematic news, and express interest in having more early-warning systems for adverse developments. If a company has deeply ingrained prohibitions against bringing up bad news—particularly if it is considered to be a sign of professional weakness—have brief one-on-one reviews individually with key business managers to discuss their operations and build a spirit of greater openness. Later, in a larger group setting, use the information gathered, starting with challenges common to several units so as not to put any one executive on the spot.

5) Beware of sunflower management

—In an effort to gain favor with their bosses and to advance their own careers, some employees are inclined to give biased favorable, or unfavorable, decisions, depending on what they think senior management most wants to hear. Boot, Milbourn, and Thakor (2005) have labeled this phenomenon “sunflower management,” based on the way sunflowers always bend their heads toward the sun, seeking its life-sustaining rays. The researchers contend that this type of misinformation can have undesirable repercussions on decision-making and, ultimately, affect bottom-line profits in business organizations, and may

27 help to explain why some organizations and individuals make poor investment decisions, pursue bad projects, or discard good ideas altogether.

6) Take the outside view

—More formally labeled reference class forecasting (Lovallo &

Kahneman, 2003; Flyvbjerg, 2008), this procedure is particularly important for planning and forecasting. An inside view involves forecasting by focusing tightly on the project at hand, considering its objectives, the available resources, and the obstacles to its completion. Scenarios are constructed of upcoming progress and current trends are extrapolated into the future. The resulting forecasts, even the most conservative ones, are typically overly optimistic. Taking an outside view results in much more accurate forecasts and requires planners to examine the experiences of a class of similar projects outside the firm. Steps involved in this scheme require an identification of a reference class of analogous past initiatives, determination of the distribution of outcomes for those initiatives, and placement of the project at hand at an appropriate point along that distribution to obtain a more realistic prediction.

7) Pay attention to doublespeak

—Also called framing or reframing (Tversky & Kahneman,

1981), this activity involves the search for positive aspects of a situation to neutralize or overcome negative aspects. Beware of how situations and proposals in business are presented as particularly optimistic or favorable. For example, with doublespeak, banks do not have “bad loans” or “bad debts”; they have “nonperforming assets” or “nonperforming credits” which are

“rescheduled.” Corporations never lose money; they just experience a “negative cash flow” or

“negative contributions to profits.” No one gets fired, they just “resign for personal reasons,” and then they are just “transitioning between career changes.” The glass is half full as opposed to half empty and there are never problems or obstacles, just opportunities and challenges. Even simple reframing in hypothetical decision scenarios (e.g., 80% of goal vs. 20% goal shortfall) has been

28 shown to influence willingness to take risks, perceived decision conflict, and aspiration levels as well as the perceived favorability and persuasive appeal of messages.

8) Conduct an independent second opinion

—This resource-intensive way of avoiding overoptimistic thinking involves bringing in experienced outsiders to develop a second draft initiative. These individuals should have a relevant memory to draw upon and are typically much less optimistic and much more accurate than the actual planners and implementers. It is important that these outsiders do not review the initial plan before soliciting their opinions.

An executive/consultant with a fresh pair of eyes and no emotional connections can sometimes see things that escape the notice of more knowledgeable in-house colleagues.

9) Hold second-chance meetings— Before implementing a decision, it is a good idea to hold a second-chance meeting during which group members are asked to express any doubts and propose any new ideas they may have. Alfred P Sloan, former head of General Motors, is known to have postponed acting on important matters until any group disagreement was resolved

(Sloan, 1964). As people get tired of working on problems, they may hastily reach agreement on a solution. Second-chance meetings can be useful devices for seeing if a solution still seems good even after “sleeping on it.”

10) Admit shortcomings —Quite often group members feel very confident that they are doing the right thing (Janis, 1982). Such feelings of perfection discourage people from considering opposing information. However, if group members acknowledge some of the flaws and limitations of their decisions, they may open themselves to corrective influences. No decision is perfect of course, so asking others to point out misgivings about a group’s decisions may help avoid unrealistic illusions of optimism that contributes to poor decision making.

11) Present next-best ideas

—companies can ask that recommendations include at least one alternative or contingency pathway to the preferred proposal with an accompanying action plan.

29

Such “next-best” ideas are useful not only to calibrate the level of a manager’s risk aversion but also to identify opportunities that a manager might otherwise consider insufficiently safe to present to senior management.

CONCLUDING REMARKS

There is substantial evidence indicated earlier that optimism, in its many forms, is related to better outcomes (e.g., coping, satisfaction, well-being) measured in a variety of ways across a variety of contexts. Such evidence makes it extremely tempting to conclude that optimism is always to be desired over realism, and what is more, that as researchers, educators, businessmen and women, therapists, and parents, that we should do everything we can to promote optimism— a conclusion, not coincidentally, supported by much of American popular culture. The research offered above, however, presents a picture that is more complicated than “optimism is good” and

“realism is bad.” Indeed, over the years, optimism has had somewhat of a checkered reputation.

From Voltaire’s Dr. Pangloss, who blathered that we live in the best of all possible worlds, to

Porter’s Pollyanna, who celebrated every misfortune befalling her and others, to politicians who compete vigorously to see who can best spin embarrassing news into something wonderful, optimism has often given thoughtful people pause. While connotations of naiveté and denial have adhered to the notion, we believe that optimism is a powerful force and is widely seen as a virtue of American culture and a key to success in business because it can fuel the drive to achieve goals and objectives and sustain an individual or a firm through difficulties.

A sense of realism matters, too, grounding optimism before it flits into fantasy and wishful thinking as well as protecting individuals from self-deception in which persons convince

30 themselves that things are different from what available information would suggest. Untethered by reality optimism can become false or uninformed hope or blind faith that everything will turn out fine and leave individuals and organizations unprepared for what can be grim reality. That can lead to disastrous results. Thus, striking a balance between the two is important. That balance is what we have labeled as realistic optimism.

We are not suggesting that optimism is bad, or that managers should try to root it out of themselves or their organizations. Optimism generates enthusiasm and it enables people to be resilient when confronting difficult situations or challenging goals.

Organizations have to promote optimism to keep employees motivated and focused. At the same time, though, companies have to generate realistic forecasts and address real problems and opportunities.

A lack of optimism could undermine the visionary qualities essential for superior research and development departments and the esprit de corps central to successful sales forces.

In recent years research by a number of scholars has documented that optimism appears to be the ambient state for most people at most times and offers numerous and diverse benefits. Indeed, optimism, conceptualized and assessed in a variety of ways, has been linked to positive mood and good morale; to perseverance and effective problem solving; to academic, athletic, military, occupational, and political success; to popularity; to good health; and even to long life and freedom from trauma.

Research has likewise shown that optimism in some circumstances can have drawbacks and costs, that optimism’s benefits are not unbounded, and may not be an appropriate strategy for all persons. In fact, a downward shift from optimism to an emphasis on reality also offers benefits. People who are overly optimistic about the future are ill-prepared to respond to setbacks that may occur. When available information indicates that expectations are inaccurate, shifting

31 expectations prepares people to deal with the most likely outcomes. Likewise, when an undesired outcome seems possible, shifting expectations downward prepares people by providing protection from an emotional blow. Ultimately, we suggest a balance between optimism and realism: people should be optimistic enough to take advantage of the many benefits of a positive outlook, but they should also sufficiently temper that optimism so that they can motivate preventative action and avoid being caught off guard.

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Extra material not included in draft

In about 440 B.C. Sophocles wrote in Antigone that “No one loves the messenger who brings bad news” (Sophocles, 1993/440 B.C., p. 18) and around 1595 Shakespeare echoed the sentiment of

“don’t shoot the messenger” (“Yet the first bringer of unwelcome news hath but a losing office...”) in

King Henry IV, Part II (Act 1, Scene 1, Line 151; 1989/1595, p. 7).

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Publishing. (Original work published approximately 440 B.C.)

Shakespeare, W. (1989). Henry IV, Part II . London: Hayes Barton Press. (Original work published approximately 1595)

The relentless optimism of Candide was intended to be a satirical attack on a popular philosophy of Voltaire’s day.

Optimism bandwagon is evident today in the created (Gillham, 2000) and continues to this day.

For example, expectations

Gillham, J. E. (Ed). (2000). The science of optimism and hope: Research essays in honor of

Martin E. P. Seligman . Philadelphia: Templeton Foundation Press.

Apparently, in our minds, we are all children of Lake Wobegon, the fictional town from the radio series A Prairie Home Companion where “all the women are strong, all the men are goodlooking, and all the children are above average” (Myers, 1998, p. 440). Myers, D. G. (1998).

Psychology (5 th ed.). New York: Worth.

47

Consider unrealistic optimism as described by Weinstein (1989) with respect to people’s perception of personal risk for illnesses and mishaps. When people are asked to provide a percentage estimate of the likelihood, in comparison with peers, that they will someday experience an illness or injury, most underestimate their risks. The average individual sees himself or herself as below average in risk for a variety of maladies, which of course cannot be.

This phenomenon is appropriately lamented because it may lead people to neglect the basics of health promotion and maintenance. More generally, optimism in the form of wishful thinking can distract people from making concrete plans about how to attain goals (Oettingen, 1996).

Unrelenting optimism precludes the caution, sobriety, and conservation of resources that accompany sadness as a normal and presumably adaptive response to disappointment and setback (Nesse & Williams, 1996). In organizational contexts Lovallo and his associates

(Lovallo & Kahneman, 2003; Lovallo , & Sibony, 2006; Lovallo, Viguerie, Uhlaner, & Horn,

2007) and Webber (2008) have noted how often optimism undermines executives’ decisions because reality is ignored.

A realistic outlook improves chances to negotiate the environment successfully, whereas an optimistic outlook places priority on feeling good.

This principle was based in part on President John Adams’ quote that “Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence” (Adams, 1857, p. 247). Adams, J. (1857). Speech in defence of the soldiers (given March 5, 1770). In F. Moore American eloquence: A collection

of speeches and addresses by the most eminent orators of America (vol. 1; pp. 235-247). New

York: D. A. Appleton and Company.

48

From the start of a discussion of Collins’ book:

—Gillette and the takeover battles, Nucor and imports, Wells Fargo and deregulation, Pitney

Bowes losing its monopoly, Abbott Labs and a huge product recall, Kroger and the need to replace nearly 100 percent of its stores, and so forth.

5) Establish in-house skeptics

—It can help to have designated critics. Sometimes that role falls naturally to a staff department, such as corporate development. The trick, then, is to ensure that its questions and concerns are treated seriously (i.e., to make sure representatives have some power) and that it focuses on substantive issues, rather than process or minor details. If an organization lacks a logical internal party to play this role, use an outside adviser, such as a retired executive, a consultant, or a business-savvy lawyer. Generally, it is best to involve the person in major strategic decisions and acquisitions first, and at as early a stage as possible. It is important to have at have at two skeptics since they are likely to be less susceptible to acquiescing to the demands and pressures of a larger group. Truly there is safety in numbers.

49 managers can become more aware of how biases can affect their own decision making and then endeavor to counter those biases.

Cultural norms and beliefs about good business practice stress looking at the sunny side and deemphasizing the problematic (Webber, 2008).

When judging the likelihood of potentially positive outcomes, human beings have an overwhelming tendency to be overoptimistic or overconfident: they think that the future will be great, especially for them. Almost all of us believe ourselves to be in the top 20 percent of the population when it comes to driving, pleasing a partner, or managing a business. In the making of strategic decisions, optimism not only generates unrealistic forecasts but also leads managers to underestimate future challenges more subtly — for instance, by ignoring the risk of a clash between corporate cultures after a merger.

Sometimes optimism can represent a form of self-deception in which one convinces oneself that things are different from what available information would suggest (see, e.g., Greenwald, 1997;

Mele, 1997; Paulhus & John, 1998; Wright & Schneider, 1999).

Realistic optimism and optimistic thinking that is likely to be unrealistic or self-deceptive

Optimism and shifts from optimism serve a goal of preparedness (Carroll, Sweeny, & Shepperd,

2006)—which is a goal state of readiness to respond to uncertain outcomes. It includes being prepared for possible setbacks should they occur, but also being prepared to take advantage of opportunities when they arise.

Optimism fosters a positive mindset to undertake challenges with the confidence that one can succeed. However, in other circumstances, a shift from optimism best serves the goal of preparedness by directing thoughts and actions toward assessing and responding to changes in the local environment.

The resolution is that people should be optimistic when the future can be changed by positive thinking but not otherwise, adopting what Seligman (1991) called a flexible or complex optimism, a psychological strategy to be exercised when appropriate as opposed to a reflex or habit over which we have no control:

You can choose to use optimism when you judge that less depression, or more achievement, or better health is the issue. But you can also choose not to use it, when you judge that clear sight or owning up is called for. Learning optimism does not erode your sense of values or your judgment. Rather it frees you to … achieve the goals you set …. Optimism's benefits are not unbounded. Pessimism has a role to play, both in society at large and in our own lives; we must have the courage to endure pessimism when its perspective is valuable (Seligman, 1991, p. 292).

50

Realistic optimism involves the search for environmental constraints and opportunities to learn about new action-consequence contingencies, whereas blaming relies on presumptions of untested environmental constraints and on avoidance of available information about actionconsequence contingencies. Criminals, for instance, blame others because they are motivated to avoid considering their own culpability, not because they are motivated to discern the consequences of their behaviors in order to recalibrate for future success.

A Washington Post poll finds that 61 percent of Americans have a “good amount” or “great deal” of confidence that Mr. Obama will make the right decisions for the country. A remarkable

72 percent are “fairly” or “very” confident that his economic program—whatever it ultimately turns out to be—will improve the economy (Robinson, 2009). Similarly, an Associated Press

(AP) poll reports that 65 percent of Americans believe Mr. Obama will be an “above average” president, including 28 percent who expect him to be “outstanding.” Almost two-thirds of

Americans, the AP finds, optimistically believe their own financial situation will improve during the Obama administration (Robinson, 2009).

Fineman, S. (2006a). Reply. Accentuating the positive? Academy of Management Review, 31 ,

306-308.

Additionally, Shedler, Mayman, and Manis (1993) have repeatedly found that those who provide optimistically biased reports of their mental health are less resistant to stress as measured by coronary reactivity (i.e., changes in heart rate and diastolic blood pressure) than either truly healthy or manifestly distressed participants. Similar findings have been observed among those who repress negative emotions (Brown, Tomarken, Orth, Loosen, Kalin, & Davidson, 1996;

Gross & Levenson, 1997). Persons who present an optimistic assessment of their emotional state

51 by denying their negative emotions, even to themselves (Derakshan & Eysenck, 1999), tend to have significantly stronger physiological reactions to stress than those who are more realistic about their negative emotions.

Shedler, J., Mayman, M., & Manis, M. (1993). The illusion of mental health. American

Psychologist, 48, 1117-1131.

Brown, L., Tomarken, A., Orth, D., Loosen, P., Kalin, N., & Davidson, R. (1996). Individual differences in repressive-defensiveness predict basal salivary cortisol levels. Journal of

Personality and Social Psychology, 70, 362-368.

Gross, I., & Levenson, R. (1997). Hiding feelings: The acute effects of inhibiting positive and negative emotion. Journal of Abnormal Psychology, 106, 95-103.

Derakshan, N., & Eysenck, M. W. (1999). Are repressors self-deceivers or other deceivers?

Cognition & Emotion, 13, 1-17.

(a triumph obtained with devastating losses),

Historically, the accurate perception of reality was the epitome of good psychological functioning (Jahoda, 1958) but some researchers have more recently argued that an optimistic outlook characterizes normal rather than abnormal human functioning (Taylor & Brown, 1988;

Zai-Ting & Shen-Ing, 2007). While that may be true, realism should not be dismissed as trivial.

Zai-Ting, Y., & Shen-Ing, L. (2007). Depressive realism: Evidence from false interpersonal perception. Psychiatry and Clinical Neurosciences, 61 , 135-141.

Thus, by taking reality into account individuals may better prepare themselves to adapt to

52 the situation. Preparedness includes being ready for possible setbacks should they occur, but also being equipped to take advantage of opportunities when they arise ( Carroll, Sweeny, &

Shepperd, 2006).

In most circumstances, optimism best serves the goal of preparedness by organizing thoughts and activity around goal pursuit and persistence and the acquisition of opportunities and resources. Optimism fosters a positive mindset to undertake challenges with the confidence that one can succeed. However, in other circumstances, a shift from optimism best serves the goal of preparedness

Sweeny, K., & Shepperd, J. A. (2007). Do people brace sensibly? Risk judgments and event likelihood. Personality and Social Psychology Bulletin, 33 , 1064-1075.

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