Why optimism might not be the best strategy

Over the years, businesses have faced wave after wave of disruption — from the pandemic and inflation to labour shortages, AI-driven change, rising costs, and global instability. Through all of it, one leadership lesson continues to stand out:

“The optimists died first”.

I wasn’t sure where it came from but I recalled a story about GIs who survived the terrible conditions in Vietnamese prisoner of war camps. 

But I couldn’t place where I’d read about it. Google had the answer of course. 

It’s almost 20 years since I read Jim Collins “From Good to Great”, one of the most widely read business books of all time. The “Stockdale Paradox” is just one small part of it but the message of survival is one that can be translated to business in times like this. And it’s one that stuck with me and helped me help my clients through the financial crash of 2008/09.

James Stockdale’s observation was that the optimists died first because they put unrealistic timescales on when they would be freed. When those timescales didn’t happen, they gave up. According to Stockdale, they literally died of a broken heart. 

The pessimists were next to go. They had no hope at all so eventually the fight drained out of them as well.

The paradox is that optimism is a necessity if your business is going to come out the other side. But it must be mixed with a healthy dose of pessimism about how long this is going to take. 

That mindset matters more than ever before.

The Danger of False Optimism

Business owners are naturally optimistic people. Most of us have to be.

Optimism helps us take risks, hire people, invest in growth and keep moving forward when challenges arise.

But optimism becomes dangerous when it turns into wishful thinking.

We’ve all heard it:

• “Things will pick up next year.”
• “The market will bounce back.”
• “AI won’t really affect our industry.”
• “We’ll get back to how things were.”

Sometimes those statements prove true.

Often they don’t.

The businesses that struggle are rarely the ones facing difficult realities. They’re the ones refusing to acknowledge them.

But what’s your new normal? 

Every business reaches moments where the old playbook no longer works.

The question is no longer whether change is coming. The question is whether we’re willing to adapt quickly enough.

For many owner-managers, the challenge isn’t surviving a crisis. It’s recognising when the environment has permanently shifted and responding accordingly.

The businesses that thrive in uncertain times are rarely those with the most accurate forecasts.

They’re the ones that learn fastest.

If our articles are helping, please forward them on to other business owners you know. In the meantime, stay optimistic but remember this is a marathon not a sprint.