Avoid Overoptimism That Leads to Taking Success for Granted

"The man who is a pessimist before 48 knows too much;
if he is an optimist after it, he knows too little." --Mark Twain

Overoptimism stemming from a sense of certainty about succeeding with the right steps can stall an enterprise by keeping it from flexibly addressing issues as they arise.

Simply choosing a new direction for your operation is not enough to ensure success with irresistible forces, particularly if the new direction is a result of overly optimistic thinking about what you can expect to accomplish. You may simply set off in a direction that is even less helpful than the one that you have been using.

But creating a new direction for a business is stimulating for most people. Having conceived of a more successful future, organizations can become addicted to the excitement that comes from a sense of certainty that they will succeed. Faced with contrary evidence that circumstances have changed in ways that are harmful to the new business direction, too many executives will become passive because of their sense of certainty about success developed when the plans were originally made.

Overoptimism has many sources, but the impact is the same: A merry sense of confidence about the company's ability to succeed is unfounded and causes the organization to inflexibly commit its resources to one path -- a wrong one. When IBM first began to falter in the late 1980s, one reason the people were inflexible about changing the company's approaches undoubtedly related to the remarkable success it had enjoyed in the prior several decades.

In other instances, overoptimism is based on believing that you have done a better job of preparing for the future than your enterprise has done before. This experience can occur with people new to planning exercises and new to the top executive roles where broad strategy questions should be frequently considered. In addition, the people in the organization can simply be more optimistic than current or future conditions warrant (this is frequently a problem in low-profit industries like paper manufacturing) for any of a broad variety of reasons.

A frequent problem found in connection with overoptimism is that your company's information can be based on faulty sources. These may be the result of customers', employees', or suppliers' misunderstandings about where your costs are incurred. Your organization will be much more successful if you take the time to be sure that the information you are relying on is timely and accurate in assessing your alternatives. Without such checking, you can become subject to the problems of many entrepreneurial organizations, namely, "fire, ready, aim."