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Why your optimism can hurt your bottom line

“Think positive.”

Another piece of advice given by everyone, ever. The drive to think more positively is so ubiquitous it’s become gospel.

Positivity makes people happier and healthier, but what does it do to your business?

What if your hard-earned habit of optimism is costing you money and success? Chances are this is happening and only delving into your psychology will fix it.

Quit thinking tomorrow will be better

It’s called “optimism bias” and it’s one of those deep-seated psychological forces messing with your biz.

Most humans experience optimism bias “lite”. They simply believe they’re luckier than others.Tali Sharot, researcher at London’s Wellcome Trust Centre for Neuroimaging, is an authority on this topic. In an article for Time magazine, she revealed that 70% of individuals thought families were less successful than in their parent’s day. However, 76% of those surveyed were optimistic about the future of their own family. Go figure.

This is similar to the urban legend (and anecdotal fact) that a vast majority of people believe they possess driving skills far above the national average.

In other words, optimism bias gives us rose-tinted glasses.

Optimism bias hurts entrepreneurs more than anyone else

Business owners are the captains of their own fate. They can sit down at their desk on Monday and move mountains all week, or nothing but fluff. It’s entirely up to them.

Combine this enormous personal responsibility for making big dreams happen (or not) with optimism bias, and what do you get?

Entrepreneurs are overly optimistic about their future

That isn’t even the scary part. The really dangerous function of optimism bias in entrepreneurs is that which inspires optimism in your future potential. 

Entrepreneurs don’t just believe tomorrow will be better than today. They believe that, when the sun rises again, they themselves will be better than today.

Entrepreneurs lay their head down at night genuinely believing that when they rise they’ll be more creative, disciplined, inspired, decisive and productive.

Are you guilty of this belief? 

Day after day, business owners around the world end their day dissatisfied with their performance. They know deep down that they’re squandering potential and they swear tomorrow will be different. Nighty night and sleep tight!

The bias towards an inflated sense of personal performance in the future specifically runs deep. Business owners are notorious for planning less for life realities like illness, retirement and taxes (gasp!) than their employee brothers.

The area where I see optimism bias crippling small business the most? Sales.

Business owners procrastinate the prospecting – the essential, revenue-generating work of today. They tell themselves they’ll do it “Tomorrow… or next week.”

The further away the future is, the brighter it looks!

Continually believing that you’ll be a better, more disciplined entrepreneur in the short-to-medium term robs your business blind. Your optimism bias steals the bottom-line boosting results – results of the activity that could be happening today.

Don’t get me wrong: I’m in the business of human potential. People do get better in the future – folks get smarter and more successful as time goes by. A lucky few get better looking too. Experience and therapy (do it) make a difference, but real change is slow.

To get sucked into the idea that future-you (six months from now) will make up for the shortcomings of lazy-you (today) is a mistake. Yet the vast majority of business owners, just like you, never escape precisely this belief.

The first step to recovery is awareness:

Know that optimism bias is real. You’re feeling the pull of it’s gravity right now. Are you going to rocket out of orbit, into the great unknown… or keep going in circles?

PS Last minute head’s up: Tomorrow, I’m taking a group of loyal readers on a deep-dive into the psychological art of uber effective goal setting. Imagine goals set so powerfully that optimism bias (among other things) is entirely avoided! This is a once off never-to-be repeated webinar and there will be no recording – it’s just for those who are committed.

Did I mention it’s entirely free? To join us at 3pm Eastern Standard Time, you simply have to register here. Don’t miss it.


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  1. Quite simply the best financial and personal advice I have received in the past 7 yrs, was from my father. He encouraged, and unknowingly provided me emotional “permission” to close down, at a loss, a business venture I was highly invested in.

    Starting, operating and closing that venture we all the right things to do. No it didn’t pain out as “planned”; yet much was experienced and learned through the adventure.

  2. It seems like you’ve described the Dunning-Kruger effect and its effects on entrepreneurs here. There’s a fine line to walk between optimism and willful blindness; having metrics in place to know when you’re not making progress helps force you to acknowledge when it’s not working.

  3. Oh man. I experience this every Sunday. I’m in Dubai, and Sunday here is the first workday. Since all my clients are US/UK based, I usually end up giving myself Sunday off because none of my clients are working.

    This after deciding every weekend to work as much as I can on Sunday because I barely get any email or Skype calls to distract me.

    And then I take Friday off because that’s the weekend for me. So technically, I end up working 4 days a week instead of 5.

    Now that I know what I’m experiencing, I just may be able to beat it!

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