How Optimists Avoid Building Pessimistic Working Cultures

Pessimists Work for Optimists

99.9% of US businesses are small and around 16% of the population are entrepreneurs. Three-quarters of them cite self-discipline or communication as the key factor for entrepreneurial success.

Founders are optimistic by nature, while most people are pessimistic. This creates a management challenge that requires trust to resolve. Yet favouritism rather than trust, is the most common management trait in my experience.

I have a friend who says “things happen for a reason”. To many he is an optimist. While a useful psychological prop, successful founders do not share this view. It is a pessimistic outlook.

Optimists believe that problems may be solved. Unresolved challenges simply mean we do not yet have an understanding of how to solve them. But we will.

“Things happen for a reason” is an appeal to a higher power. Were there such a power, it would be pointless making new discoveries and developing better ways of working. This is the opposite of entrepreneurial and not how the world works.

People with a fatalistic approach tend to prefer working for others, such as optimistic business founders.

Optimists Build Pessimistic Processes

This truth presents a challenge for optimistic business owners. Knowing that they see the world in a different way from most people, they may choose to exert strong control on how others work.

A lot of people don’t mind this. They swap the fatalist “things happen” for “the boss told me.” Either way, they shed responsibility. This is not how to get the best out of people.

Prescribing how people work is pessimistic. It says there’s one way and it cannot be improved. It is the same as saying things happen.

As a result, optimistic founders build businesses with pessimistic cultures. How might they avoid doing this?

Big Hairy Mistake

A mistake many make is to have big hairy goals. For instance, being super optimistic about the size of your market, or the growth rate you will achieve. The assumption is this will motivate people to push harder than they otherwise would.

This may work in startups, where likeminded optimists gather around a common purpose. But once the business expands beyond ten people, this shared endeavour begins to fade.

Workers feel distance from bosses who set unreachable goals. Sales people who miss an overly ambitious quarter, might look for a new job rather than chase an impossible target. Some entrepreneurs don’t care and Elon Musk burns through a lot of executives.

But not every business is Tesla or Space X. Most would be better with achievable goals and enabling sales people to earn commissions. Such goals are established with the OKR framework.

Objectives and Key Results

An objective is business specific but not prescriptive. For example, grow sales 20%, rather than defining growth rates for specific delivery channels. Improve production efficiency by 5%, without prescribing a new technology, or particular method to achieve it.

The key results measure progress towards the objective. A sales goal may require marketing to open up a new digital channel, sales people to break new territory and customer service to improve net promotor scores.

Flexibility is essential. To get the best out of people, you must trust them to find the best way to deliver a goal. The bigger the business, the harder it is for one person, or even a team, to know the best way to do everything.

Just because most people are accepting of the way the world works, does not mean they won’t strive to be better. Most will when given a chance. Crafting appropriate OKRs is the way to free people to be the best versions of themselves.

Google is a champion of OKRs. It measures success on a scale of 0 to 1. A score of .6 or .7 is acceptable and indicates that objectives were challenging. To gain the most from OKRs, you must be transparent about expected results and offer outsized rewards for outperformance.

Questions to Ask and Answer

1. Have I aligned target delivery dates with my incentive schemes?

2. Are goals too prescriptive and define how as well as what must be achieved?

3. Do I encourage people to set goals and have a say in an acceptable success rate?

I’m Simon Maughan and I write The Profit Elevator as a guide for B2B firms seeking faster growth.

Self disciple and clear communication are the first and last of the six elements of The Profit Through Process Planner in my Business Accelerator Community for busy executives.

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