The Weakness of Positive Thinking
When an upbeat management style becomes excessive, it wards off reality and asks for trouble.
Author: David Collinson (Lancaster University Management School)

http://www.strategy-business.com/article/re00199?pg=all

This builds on a thesis in our Market Driven Growth process where the underlying psychological dynamics of group interactions –Conformation Bias and Cognitive Dissonance --can lead to the phenomenon of “Escalation of Commitment” where negative data is ignored and the team just pushes forward with their original hypothesis often with disastrous results. . Overzealous “Prozac Leadership” just intensifies these phenomenon.

There is such a thing as too much positive leadership, according to this paper, which finds that a blind allegiance to organizational optimism lies at the heart of many of the financial miscalculations that drove the Great Recession. Countering the widely held view that positive thinking by leaders invariably challenges and inspires subordinates, the author coins the term “Prozac leadership” to describe how optimism tends to resemble a well-intended but addictive drug: It promotes artificial happiness and discourages critical reflection, leaving companies ill equipped to deal with setbacks. 

Drawing on an analysis of nearly 200 studies of leadership, positive thinking, and organizational dynamics, the author acknowledges that the ability of supervisors to be persuasive is a key skill, and that optimism is one of the most effective communication methods. In fact, leaders’ positive narratives and vision can be transformational, improving innovation and teamwork, especially when employees are part of the strategic dialogue and trust their bosses. 

But several recent studies have critiqued the positive thinking movement, highlighting the negative personal and organizational effects that can result from “excessive optimism,” “irrational exuberance,” “gambling against the odds,” and the “tyranny of positive thinking.” In short, Prozac leaders can wind up believing their own narrative that everything is going well. As a consequence, they ask fewer and fewer questions and become deaf to feedback that is “off message,” leaving them, and their companies, dangerously insulated from economic and social realities.