How optimism helps in entrepreneurship
A vivid analogy for that which contributes to success in entrepreneurship is that of the Horse and the Jockey.
The “horse” talks to the harder business skills required to manage the many resources required to navigate a business (Sales; Marketing; Financial and systems to name a few)
The jockey on the other hand, talks to those personal entrepreneurial competencies (soft skills) that are essential to lead an entrepreneurial business. (I disagree with the soft label!)
One of these key competencies is that of optimism. The Cambridge dictionary gives this definition, “the quality of being full of hope and emphasizing the good parts of a situation, or a belief that something good will happen”
I can attest to the value of learned optimism as I consider the past 20 years of interaction with entrepreneurs and business owners. It is a key principle, force and competency that can be learned.
Here are 4 aspects for why optimism may contribute to successful entrepreneurship:- (With thanks to Prof Utpal Dholakia, Professor of Marketing-Rice University for these points.)
- Optimism supports creative thinking & generation of new ideas.
Optimistic people tend to be more creative in their thinking. Why? In one study published in Nature, the authors reported that: “The ambiguous nature of the future allowed optimists to distance themselves from negative constraints and approach positive outcomes, creating vivid colorful images in their mind.“ Thinking in this way about the future is a good thing if you are an entrepreneur. Research shows that when people are future-oriented (as optimists tend to be) and when they think vividly about distant futures in a positive way (How will the world be like ten years from now? or twenty years from now?), it stimulates all kinds of creative ideas about what such a world will contain, and how we can get there. For entrepreneurs, such a thought process will lead to novel ideas for new products, services, or businesses having a greater chance of success.
- Optimism produces a tendency to act.
Entrepreneurs are faced with hard choices virtually every day. Under such circumstances, rather than just waiting to act and wavering on which course of action to take, optimists plunge right ahead. Why this is the case is not hard to understand. The future looks rosy for optimists, and something they want to get to, and make happen. For entrepreneurs, the pronounced tendency to act usually means being decisive in choosing a particular course of action and then just performing it. Such an approach is likely to be effective in doing what is needed to get the business venture going and to keep it running.
- Optimism supports persistence in a chosen course of action that is difficult.
When undertaking difficult activities or confronting something that is a personal challenge (starting and operating a business venture certainly counts as both), optimists, not surprisingly, are more confident and persistent. Even when they feel like they are not making much progress, they stick to their chosen path. What is more, such persistence is maintained even in the face of discouraging results.
- Optimism facilitates bouncing back after a failure.
As we have seen at the outset, launching a successful new business is very difficult. Even the most competent and lucky entrepreneur will encounter failure at one time or another. What happens after that? As one paper pointed out: “Exploratory and inventive organizational activities … involve high base rates of failure and they call for highly resilient actors who must valiantly persevere for eventual success.”
Optimistic entrepreneurs are resilient in two significant ways. First, they are emotionally more resilient. Where failure normally produces ruminative thoughts about how and why it happened, and what could have been done to avoid it, optimists don’t fall into this trap. Instead, they focus on the task of moving on and starting their next venture. The second type of resilience is cognitive. Thinking positively encourages optimistic people to think more broadly which in turn allows them to be flexible and open to new ideas. They can move on more quickly and to better quality ideas. Pessimists, on the other hand, tend to be narrow-focused in their thinking. While this may be helpful under some circumstances, it will hold you back if you are trying to bounce back from a business failure.
Learning and applying this powerful competency can be hugely significant in your business. Next week I will talk to practical steps to being optimistic.